Marriages end for all kinds of reasons, and often, financial disagreements and issues come into play. Even if you are heading for a divorce for reasons that have nothing to do with finances, there are still certain steps you may want to consider taking to streamline the process and reduce your level of liability with regard to your spouse’s debts.
If, for example, you and your soon-to-be ex share multiple credit cards, it may prove wise to eliminate this shared debt prior to the dissolution of your marriage to ensure it does not come back to bite you later. Why? Credit card companies do not care about the state of your marriage – they simply want to collect what is owed to them, and they typically do not care where it comes from. So, if you are tracking toward a divorce and you and your spouse currently have shared credit cards, consider the following options:
Cancel all joint cards
One option you have when it comes to shared credit cards is to simply cancel the joint accounts and put them in your name, and your name, only. This may prove especially worthwhile if you have concerns about your partner continuing to accrue credit card debt between now and the official end of your marriage. As for the portion of the debt owed by your partner, you can work that part out during equitable distribution.
Use joint-savings accounts to pay off debt
Another option for paying off joint credit card debt before divorce involves drawing funds from joint-savings accounts to do so. If you and your partner do not have enough in your joint accounts to cover your credit card debt, another option might be to take out a home equity line of credit on a house you co-own to do so.
If you and your spouse are unable to unload your combined credit card debt prior to the end of your marriage, you may want to consider adding something in your divorce agreement about how you plan to pay it off.