Dealing with credit card debt can be a problem for couples who are seeking a divorce. The reason is that many married South Carolina couples share a credit card. This means couples can share the benefits of using a card but are equally exposed to liabilities. If the spouses are not on the same page about how to divide up credit card debt, there is the potential for one spouse to end up on the hook for most if not all of the debt.
The Motley Fool explains the different ways spouses can share a card. Commonly, one spouse opens a card account and adds the wife or husband onto the card as an authorized user. Both spouses have the ability to make purchases with the card. However, the spouse who is an authorized user is not obligated to make payments. Only the spouse who opened the account bears the responsibility for paying off the card balance.
The other common way spouses share cards is for a couple to own the card jointly. Both spouses, while they can use the card, are also responsible for debt incurred on the card. A jointly owned card offers benefits for producing payments in a timely manner, but the downside is that each spouse can be penalized if payments are overdue or if the card balance goes over the credit limit.
Ideally, a couple has worked out how to pay off joint card debt in a prenuptial agreement, but if this is not the case, resolving the debt can be complicated. Even if you come to terms with your spouse in your divorce settlement, your spouse might decide not to live up to the agreement. You may end up going back to court to pursue payments from your spouse while trying to fend off demands from your cardholder to pay off the remaining debt.
Closing a joint card or separating card ownership is an important step. Even after the divorce is complete, an ex-spouse can still run up the card balance if the card remains jointly owned and leave you responsible for it. Also, if your former spouse files for bankruptcy, the card company may turn to you to pay the full balance, which can harm your credit history even though your ex was the one to go bankrupt.
The complications involved in separating credit card debt means you may need to consult with professional legal counsel to know your options. Due to the varying circumstances of divorcing couples, do not read this article as legal advice; it is only intended as general information.