From properly identifying non-marital assets to reaching compromises including retirement accounts and stocks, the financial component of most divorces has become complex in recent years. While divorcing couples have become savvier at finding an equitable split of assets during the legal process, there are still numerous complications regarding the division of debts.
The most common type of debt that must be divided during a divorce is credit card debt.
Unfortunately, a credit card company isn’t bound by a divorce decree. To them, debt is debt that must be resolved. It is wise for couples to take stock in jointly held credit cards in an effort to pay them off or properly divide the responsibility in accordance with the division of assets.
Here are some tips to remember:
- Cancel all joint credit cards so no new debt is incurred.
- Pay off the debt by using joint savings or a home equity line of credit.
- Clearly agree to who will pay off any remaining debt.
- Work through mediation to determine a proper division of assets and remaining debt.
- Keep detailed records of additional charges.
There are several options for handling joint credit card debt. The first step, of course, is to properly identify the debt itself. Be honest with your spouse about any existing credit cards and don’t attempt to hide purchases. You are both beginning a long journey to a new future.