Many married couples rely at least partially on credit cards to ensure that they have financial flexibility. Revolving lines of credit help people cover unexpected expenses. Most married couples rely on credit at least occasionally to balance their household budgets and afford all of their necessities.
In some cases, they may accrue a significant balance on their credit cards during the marriage. Spouses might find themselves disagreeing over the most appropriate way to address credit card issues during divorce. The three concerns below can make the negotiation of a property and debt settlement more challenging for a couple.
Questions about what debt is marital
Generally speaking, spouses share the income that they earn during a marriage. They also share responsibility for any debts that they take on during the marital relationship. However, some people may try to include non-marital debts in their financial documents during property division negotiations. They might include part of a credit card balance that they accrued before getting married, which should remain their separate obligation. They might even try to include balances that they incurred through adultery. People often use credit cards to pay for restaurant meals, gifts and hotel rooms while cheating on their spouses. Financial infidelity can also be a concern. One spouse may have blatantly lied to the other about their financial habits.
Concerns about defaults
Both spouses may have partial responsibility to cover certain debts as part of the divorce settlement. Unfortunately, either spouse might default by failing to pay what they owe. Some people even file for personal bankruptcy after divorce. In that scenario, the other spouse could end up facing personal accountability for the unpaid balance on any theoretically marital credit cards. Even when there is a court order affirming that a specific debt is the responsibility of one spouse, creditors can still take legal action against the other spouse to hold them accountable for it.
Disagreements about credit card rewards
Some of the most prestigious credit card reward programs offer valuable perks. People gain access to airport lounges or receive free companion tickets when they purchase a flight. Other people may have accrued hundreds of dollars in rewards points that they could use toward specific purchases. Couples may find themselves disagreeing over how they should share those rewards and even how to value them.
Splitting shared financial obligations can sometimes be as difficult as dividing high-value assets. Recognizing the potential challenges associated with credit card debt can be helpful for spouses as they prepare for property division negotiations.
