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Colorado Springs Divorce Lawyer: Dividing Credit Card Debt in a Divorce

Wednesday, 05 May 2010

blog-logoDivorcing couples often think they have their credit card debt “covered” just because they've divided up the debt in a property settlement; but there is one important stipulation that many of them fail to realize:  Creditors are under no obligation to respect the terms of your divorce agreement.  As a Colorado Springs divorce lawyer, I am acutely aware of how this oversight can affect my clients’ financial future.

Here is an example of how assigned credit card debt can come back to haunt you:

Say you and your ex-spouse each took an equitable share of the debt load from your marriage.  Several months go by after the divorce and it seems like everything is going smoothly, but then you pull a credit report for yourself and see a delinquent payment history for one of the bills assigned to your ex.  Apparently, your ex hasn’t been paying his bills.  But why would this have any impact on your credit report?  It must be a mistake.  Not so fast!

It’s possible that when you divided the debt, you thought this credit card was only in your spouse’s name, but upon further investigation you learn it was actually a jointly-held account.  Most people will call the creditor and start explaining how the bill is no longer their responsibility, and demanding that the derogatory information be removed from their credit score.  Unfortunately, the creditor is under no legal obligation to help you.  In fact, they will probably inform you that a divorce agreement has no impact on your account agreement.

By the time most people realize this, the account is already seriously delinquent.  In many cases, they end up paying it off just to clear up their own record.  If this happens to you, then notify your lawyer immediately.  A petition can be filed for enforcement of your property settlement, in which case your ex-spouse will be ordered to repay you for any debt you paid on his or her behalf. 

If you have questions about the impact of credit card debt on your property settlement, or you are already dealing with a post-decree issue like the one described above, a Colorado Springs divorce lawyer can help you resolve it.

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