After a divorce, debt liability is usually settled. Sometimes debt matters do not emerge until after the divorce has gone to court. For example, if your spouse defaults on a credit card after the divorce is finalized, you may be held responsible in some cases.
Community Property States
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are classified as community property states. If the card-holding spouse currently lives in a community property state or lived in one when the credit card account was opened, the non-signing spouse also can be responsible for the debt. Any debt incurred during the marriage to benefit the couple is considered marital debt, which is split equally in community property states. If debt is not clearly assigned in the divorce, the creditor has the legal right to collect 100 percent of the credit card debt amount from either spouse.
Equitable Distribution State
The remaining states are classified as Equitable Distribution states. In these states, debt is not shared unless it is in both names. The cardholder is responsible for any debt they incur on the credit card. A spouse cannot be sued unless their name is on the credit card as well.
Tips
If spouses have joint credit cards during a divorce, it is best to contact the credit card company to pay off any debt before the divorce is finalized. The couple should agree to pay off any shared debt before going to court. If liquidating assets, all debt should be paid from the sale of the assets to prevent debt issues in the future.
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