Q. How will credit card debts be handled as my husband and I go through our divorce?
One of the trickiest areas in dealing with a divorce is handling credit card debt incurred during the marriage. Often we will hear clients say "but I didn't even know about the credit card" or "she charged most of the items on the card; why am I responsible to pay half?"
The first step if you are planning to file for divorce is to get a complete picture of all your debt including credit cards. To do this you should obtain a copy of your credit report from at least two of the three nationwide consumer reporting companies: Experian, Equifax or TransUnion. The Fair Credit Reporting Act entitles you to a free copy of your credit report from each of these three companies every 12 months without affecting your overall credit score. To order your free annual report online, go to www.annualcreditreport.com or call toll-free to 877-322-8228.
Also, it is a good idea to obtain some credit in your name prior to the divorce. This will help you establish a credit history and allow you to make purchases following a separation.
n What should I do to protect myself with our credit cards?
If you and your spouse have joint credit card accounts, you may want to contact the credit card company after the date of separation to close the account or stop any further purchases by your husband. Do the same if your spouse is an authorized user on any of your accounts.
When you want to continue credit with that company, start a new account solely in your name. Before you cancel a credit card you will need to consider whether regular monthly marital payments, such as cars or insurance, are being made with that credit card, which would be interrupted and damage your credit if not paid on time.
n How will credit card debt be divided?
Credit card debt will be divided as a part of the overall division of marital property and debts. When dividing marital property, the judge considers what is equitable or fair between you and your spouse. That usually means making the bottom line equal to both of you after including all property and debts acquired during the marriage. This is not necessarily done by making each of you pay one-half of each debt. For example, you may be ordered to pay a $1,900 debt to Lowes and your spouse will pay the Visa card with a balance of $2,100. The date to look at the balance of the credit card is usually date of separation. Charges on the credit card after date of separation are usually not marital debt and will become the responsibility of the party who made the charge.
n What happens if my husband charged more on the credit card than I did?
In most cases, the court will not review a lengthy history of who charged what on the credit cards, but there can be exceptions. If your spouse has used a credit card primarily for purposes that did not benefit the family, such as his affair, gambling or purchasing excessive alcohol, you need to let your attorney know. These charges could be considered a dissipation or waste of marital funds that needs to be accounted for in the division of marital property.
There is a presumption that property and debt acquired during the marriage are marital property to be jointly divided. If you claim this debt is his separate property, you must clearly prove to the judge that it was not used for a marital purpose.
n During the marriage my spouse applied for and received several credit cards without my knowledge. Am I responsible for paying this debt?
It depends. The court will consider the overall fairness of the property and debt division when deciding who should pay this debt. If your spouse bought items with the credit cards (such as expensive guns or tools) and intends to keep those items, it is likely that he will be ordered to pay the debt incurred for the purchases. The real question is not whether you knew of the credit cards, but whether these credit card charges were for the overall benefit of the family or by agreement.
If the credit card is solely in his name, then it will be considered marital debt to divide if he used the card for family necessities of life, such as food, gasoline, necessary clothing, housing, or medical treatment. These necessities include any purchase that goes toward the overall support of the family, the joint benefit of both spouses or their property.
Lyne Ranson and Brittany Ranson Stonestreet are family law attorneys in Charleston. They recently co-authored "Divorce in West Virginia. Together they have more than 38 years of legal experience. Reader questions and comments are welcome at Lyne@LyneRanson.com.