Credit card debts accumulated during a marriage are regarded as marital property during the division of marital assets in divorce proceedings. Texas is a community property state, and even if a particular debt is in the name of one spouse, both may be held responsible. Couples who are considering divorce typically want to move on to a new life post divorce without the responsibility of old debt. If this matter is left unattended, the court will typically divide debts on a 50-50 basis during the property division process.
Credit card providers are not obliged to honor divorce decrees, and if one spouse fails to maintain regular payments on jointly owned credit cards, they may go after the other spouse if both spouses jointly applied for the credit card. In those circumstances, one spouse may also be held responsible if the other one files for bankruptcy, even when this occurs after the divorce. For these reasons, joint credit cards are typically cancelled during divorce proceedings. Divorce attorneys and financial planners typically advise divorcing couples to either settle jointly owned debts or transfer balances to individually owned credit cards in accordance with the final settlement.
Couples whose relationship prior to divorce allows them to discuss jointly owned debts may agree on how to allocate debts. In appropriate circumstances, the attorneys for the parties can arrange for an experienced divorce mediator to guide a couple to mutual agreements about how the debt will be handled. The attorneys will, of course, continue to represent the parties during mediation and throughout every stage of the proceedings.
Texas couples may ask the court to structure payment agreements as part of property division into the divorce decree, but even then, the creditor may hold both spouses responsible. If the spouse who is responsible according to the divorce decree fails to pay a particular debt and the other spouse is held accountable by the creditor, further legal action may be required. An experienced divorce attorney will provide guidance related to legal options available to order the other spouse to pay the debt.
Source: creditcards.com, “Dividing credit card debt in divorce“, Amy E. Buttell, Accessed on March 1, 2015