Located and practicing in Martinsburg and throughout Eastern West Virginia
Located and practicing in Martinsburg and throughout Eastern West Virginia

3 important considerations for credit cards during divorce

On Behalf of | Sep 6, 2022 | Divorce

The average American household has a few credit cards and several thousand dollars of credit card debt. Credit cards help you pay your bills on time and absorb unexpected costs as they arise. They can provide you with an overall higher standard of living than you would enjoy if you had to truly live from paycheck to paycheck.

Unfortunately, credit cards can lead to overspending and can cost thousands in financing fees. If you have credit cards and find yourself thinking about divorce, the amount owed on those accounts could fail you a big role in the property division process. There are multiple ways in which credit cards will affect your financial circumstances during and after divorce. Considering the three factors below can protect you as you negotiate property division proceedings or prepare for court.

You may not have access to joint accounts

If you are about to file for divorce or believe your spouse will file, freezing your joint accounts may be one of the first things that occur during that process. To avoid complications caused by one party misusing shared credit cards, spouses facing divorce often close shared accounts. You may then need to make alternate arrangements for yourself so that you have a new credit card solely in your own name for expenses.

Credit card debt can influence property division

West Virginia uses an equitable distribution rule for property division. A judge will consider numerous details about your family circumstances when dividing your property and your debts. Credit card debt from during the marriage will often be part of your marital estate.

Even if the account is only in one person’s name, charges from during the marriage that helped support the household, like groceries and utility expenses, will likely be part of the property division proceedings in your divorce. Judges can order one spouse to pay off an account because they earn more, or they might use credit card debt to justify awarding one spouse more marital property as well.

If you can show that your ex misused the credit card for personal benefit, like buying a full new wardrobe the week before filing for divorce, a judge makes exclude amounts that they qualify as dissipation or wasteful spending.

Credit card debt can come back to haunt you

Even if the courts order your spouse to pay certain debts, there is no guarantee that they will do so in a timely manner. If your ex falls behind on payments without refinancing the debt or if they file for personal bankruptcy, you may find yourself suddenly facing collection activity and responsible for the amount owed. The more angry and less responsible your spouse is, the more there might be at risk if they are supposed to pay for those debts.