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What Happens With Credit Card Debt In A Divorce?

How do you divide credit card debt when getting divorced? What if the debt is in both of your names? What if you have much more debt in your name than your spouse?

The important thing to know about credit card debt is that no court can interfere with the contract that was signed between the person and the credit card company. So, if you have a credit card in your name and your spouse did not co-sign that agreement with you, you will ultimately be responsible for paying the debt. This is true even if the debt was incurred during the marriage.

Texas is a community property state. Which means that anything acquired during the marriage is community property. (With the exception of gifts, inheritances and personal injury awards.) That means that any debt incurred during the marriage is a community debt.

The judge could order that your spouse pay all or a portion of a credit card debt that is in your name, or you could make an agreement with your spouse to that effect. But if that happens, you are setting yourself up for problems. The reason is this: If your spouse fails to pay the credit card company as agreed or ordered, the credit card company will come after you for payment. If you don't pay, your credit will probably suffer.

You could file a motion to enforce with the court to try to force your spouse to pay his portion of your credit card debt, but all you can get from the court is an order. The Judge cannot punish your spouse by putting him/her in jail as punishment. There is no debtor's prison in Texas (or in the U.S.) Meanwhile, your credit is damaged and you have probably spent money hiring an attorney to help you with the enforcement.

A better way to deal with credit card debt when negotiating a property settlement in a divorce is to agree that the party who's name is on the credit card agrees to pay that debt. If one party has more debt in his/her name, then one way to make the property division more "fair" is to let the party with more debt get more of the assets. This will offset the amount of debt a person takes.

Call Hoppes & Cutrer, LLC for questions regarding division of property in a divorce. 

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