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Credit card debt and divorce

It is not unusual for divorcing couples in Maryland to have some credit card debt. This debt, particularly debt from joint credit card accounts, will have to be addressed during the divorce process. Unfortunately, doing so can be challenging, largely because many spouses do not understand the ramifications of repaying unsecured debt after a divorce.

When a couple has joint credit card debt, they are each legally responsible for paying that debt. As a result, divorce financial settlements typically list all credit card debts and divide responsibility for debt repayment between the spouses. While this arrangement is binding between the former spouses, it does not obligate creditors to shift their collection tactics.

What this means is that if the spouse responsible for the debt stops repaying it, the credit scores of both spouses may suffer. In addition, creditors are legally allowed to begin collection activity against both spouses as well. The existence of a divorce decree that obligates only one spouse for repaying the debt does not affect the creditor's claims on both spouses. The only recourse that the nonviable spouse has is to go back to court and ask the judge to force the other spouse to meet his or her financial obligations.

Financial experts generally advise couples to pay off and cancel joint credit card accounts as soon as possible, bypassing the need to divide responsibility for debt repayment in the divorce decree. In situations where one spouse is responsible for paying the debt, the non-liable spouse should be checking statements and his or her credit report to ensure that the debt is being paid as agreed. A family law attorney may be able to assist in ensuring compliance with the financial arrangement.

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