For an American, debt may be as common as baseball or apple pie and this kind of acceptance of debt is because the majority of American couples owe a huge amount of money to their credit card lenders. They have taken out auto loans on their cars and have mortgages on their homes and have also over-utilized credit cards both for emergency and luxury purchases. However, all these debts seem to be inconsequential as long as you’re residing in wedding bliss. Everything seems to be right in paradise but as and when the marriage falls apart, the immediate question that arises is who gets left with the bills?
You can definitely file a divorce from your spouse for personal reasons but unless you take those extra steps to safeguard yourself, eliminating debt from credit cards that are jointly held is way more difficult. Something that you should remember is that the credit card companies aren’t bound by divorce decrees and hence they may run after you for debt that you and your spouse had jointly incurred when your marriage was running fine. This is the main reason why divorce attorneys always advise people to leave their marriage with no joint debt. Your ultimate goal should be to remove your personal liability from the debts accrued by your partner.
Consequences of a new single life with joint debt
When you opt for a divorce, your first consideration should be the consequences that you may face when you enter your newly single life with the jointly held debt. It is indeed painful to be liable for the debts of your ex-spouse! If your ex decides to file bankruptcy and not pay what he is supposed to pay, the creditor may hold you responsible for paying off the full amount of debt along with the penalties and interest. Although you may include provisions in a divorce agreement and force your ex to pay off the debts, getting back to the court is definitely time-consuming and expensive.
There are many couples for whom this becomes a matter of the emotional game. They think that if he or she can spend money, they can too. This is how they run up their credit cards. Little do they realize that you can actually save yourself enough money if you work an agreement about who is supposed to pay off the card. You may even seek the help of a financial planner or an advisor or a mediator.
Knowing your options of handling joint credit card debt
There are numerous options for tackling joint credit card debt and which one you choose depends on the present state of the relationship that you share with your ex-spouse. One of the best ways to be sure that no joint debt disturbs you is by canceling all joint credit cards. You may cancel all the credit cards that you know you have and then put them in your own name. This way you may prevent incurring more debt. Equal distribution is one of the last things that you may do in the divorce process under which the equal distribution of debts and assets is ultimately finalized.
On the other hand, if you think you’re drowning in debt and you fail to extricate yourself even after seeking the help of a credit counselor, you may think of filing bankruptcy to get rid of credit card debt and also other debts. If you can’t avoid carrying joint debt in your post-divorce life, you may structure your divorce agreement to safeguard yourself. If the cards are in both names of the spouse and the divorce decree directs a single person to pay them, then he is liable to pay off the debts in the eyes of the court.
Hence, if you’ve just gone through a divorce, it is needless to say that you are going through emotional turmoil. Amidst all this, if you don’t want to go through financial turmoil as well, take the required steps to handle your joint credit card debt by following the advice mentioned above.
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