MY SPOUSE RAN UP CREDIT CARD DEBT RIGHT BEFORE OUR SEPARATION.

AM I RESPONSIBLE FOR HALFOF THAT DEBT?

Terence Daniel Doyle, Esq.

Ending a Marriage Also Involves Apportioning Responsibility for Debts that Were Incurred During

the Course of the Marital Relationship

My Spouse Ran up Credit Card Debt Right Before Our Separation Doyle Golde Grossman Family Law Group 2

When a creditor approves a loan based on a joint application, the creditor

will consider each of the spouses jointly and severally liable for the money

borrowed.

The process of dissolving a marriage in California requires separating shared marital

assets. Ending a marriage also involves apportioning responsibility for debts that

were incurred during the course of the marital relationship.

California is a community property state, which means that all property and all debts

are considered to belong to both spouses. Each spouse has a right to 50 percent of all

shared property and has an obligation to be held

responsible for 50 percent of shared debt. All

property acquired during the marriage, with

limited exceptions such as inheritance, is

considered to be community property. Likewise, all

debt acquired by either party while married is also

considered to be shared.

However, there are also limited exceptions

regarding shared responsibility for debt. If you can

demonstrate that your spouse ran up credit cards

or incurred debt in contemplation of divorce, it may be possible to have those

particular debts assigned to your spouse during the divorce settlement agreement.

Likewise, if you can prove that your spouse did not incur debts for the benefit of the

community during the time period leading to divorce, you may also be relieved of

liability and be able to have the debts assigned to your spouse.

DEBT AND SEPARATION

Married couples routinely share financial accounts, including debt accounts. For

example, it is common for a husband and wife to apply jointly for a mortgage; for car

loans or for credit cards. When a creditor approves a loan based on a joint

My Spouse Ran up Credit Card Debt Right Before Our Separation Doyle Golde Grossman Family Law Group 3

application, the creditor will

consider each of the spouses

jointly and severally liable for the

money borrowed.

This means that the creditor does

not care who the payments come

from or which particular spouse was responsible for incurring the debt. The creditor

will try to collect from each spouse separately or from the marital unit together in

order to have the bills paid.

Unfortunately, this can have significant implications when a couple divorces. If you

and your spouse had a shared credit card and your husband or wife maxed out the

card in contemplation of the divorce, the creditor still considers you responsible. This

is true regardless of what your divorce settlement agreement stipulates.

The effect of this is that-- even if the divorce settlement dictates that your spouse is

solely responsible for debt-- the credit card company is going to take action to collect

from either of the parties who applied for the credit and guaranteed the loan.

For example, if your divorce

settlement agreement stipulates

that your wife must pay the credit

card bills, the credit card company

still holds both husband and wife

liable. If your wife stops paying the

bills or declares bankruptcy, the

credit card company will try to

collect from you, regardless of what

the divorce agreement says.

When a debt is assigned to your spouse in a divorce settlement, you take the risk that

your credit could be adversely affected if your spouse is unable or unwilling to pay the

My Spouse Ran up Credit Card Debt Right Before Our Separation Doyle Golde Grossman Family Law Group 4

bills. As a result, it is advisable to take steps to protect yourself and ensure that the

debt is no longer your legal obligation.

One option that you have is to insist that the

debt be solely refinanced into your spouse’s

name. For example, your spouse could do a

balance transfer into a credit card that is only

in his or her name. Your spouse could also

take a personal loan and repay shared credit

card debt. These options are feasible only if

your spouse has sufficient credit history to

qualify to take sole responsibility for the debt.

This becomes an issue not only with smaller debts such as credit card debts, but also

with larger loans such as mortgages and car loans. As such, some divorces result in a

family home being sold because neither spouse is able to take sole responsibility for

the mortgage.

Another alternative when refinancing the debt is not possible is to insist that the debt

be paid off as part of the divorce. When your spouse is held solely responsible for the

charges because the spending was in contemplation of the divorce, your spouse could

be assigned a smaller share of the marital assets to account for the repayment of

shared debt.

Because there are multiple options for addressing the problem of apportioning debt, it

is advisable to consult with a professional for advice. An experienced attorney can

assist you in determining the best arrangement for dealing with the individual debts in

your marriage so you protect yourself from financial trouble in the future.

If an alternative solution is not exercised and the divorce agreement does hold your

spouse solely responsible for shared debt, you should carefully monitor the debt

payments until the balance is paid in full. This will help to protect your credit score

and to prevent judgments against you for nonpayment.

My Spouse Ran up Credit Card Debt Right Before Our Separation Doyle Golde Grossman Family Law Group 5

If your spouse stops paying as required, you can go to

court and compel payment. If you are forced to pay

because your spouse won’t, you may also pursue a

claim in court to recover the money that the divorce

settlement agreement stipulated your spouse was

responsible for paying. A divorce and family law

attorney can represent you in these legal actions.

About the Author

Terence Daniel Doyle, Esq. is the

founder of the Family Law Group,

Danville CA. Terence Daniel Doyle

brings a powerful background and a

strong skill set to the firm. He is one

of only 1100 attorneys in the state of

California to hold the unique standing

of Certified Family Law Specialist

(CFLS) from the State Bar Board of

Legal Specialization. In addition to

family law, his areas of practice

include civil litigation, as well as

estate planning and taxation. Mr.

Doyle established the firm in 1984,

and maintains a strong vision for the

law group and its clients.

Terence Doyle’s greatest strength is

his ability to apply his knowledge of

case law to his client’s particular

situation, and then devising a strategy

which produces the best possible

outcome.

Mr. Doyle is a member of the State

Bar in the states of California, Arizona

and Hawaii. He holds his law degree

from Golden Gate University, with a

B.A. in Mathematics from St. Mary’s

College of California. He is a Danville

California native where he resides

with his family.