Credit card debt and how it’s going to get divided in the courts as you’re going through the divorce process can be difficult to understand and predict. This is one of the more pressing questions for our clients here at Atlanta Divorce Law Group, because we all have credit card debt.
For assistance with dividing credit card debt in Alpharetta, do not hesitate to reach out of one of our lawyers. Our team of asset division attorneys can provide invaluable insight on how local courts typically divide different types of property between divorcing spouses.
The basic presumption is that everything in the marital assets gets split 50/50 between spouses, but what really happens versus what people expect to happen with their credit card debt when they’re getting divorced often do not line up.
For example, some people believe that just because something’s in their name or in their spouse’s name that it’s not marital property, and that’s simply not true. Anything acquired during the marriage – with very, very few exceptions – is considered marital property, whether it’s an asset or a debt, whether it’s in your name or their name, etc.
Georgia is an equitable division state, not necessarily an equal division state. Equal division means assets are split 50/50, and equitable means a fair distribution. Local courts presume that 50/50 is fair, and you have to provide a reason why, in your case, it’s not fair.
An example of a valid reason is never having approved of your spouse’s debt. You and your Alpharetta attorney can argue that your spouse’s credit card debt shouldn’t be your responsibility because it wasn’t something you agreed upon. However, the contents of the credit card statements can impact how debt is allocated, as well.
For instance, not having agreed upon the debt may not be a valid reason to avoid having a share in the debt, because a lot of times, the credit card is used for everyday expenses that we all need (i.e., gas, food, grooming, and other family expenses). In other words, just because you didn’t approve of your spouse’s credit card debt doesn’t mean you won’t have to share in it, because it may have been used as part of the marital estate.
Credit card purchases that are considered more luxury goods like expensive watches and designer clothes would not be considered necessities. In that case, it’s important to look at the history. If you allege that you didn’t agree to your spouse’s credit card purchases, but they have been making those purchases for 10 years, it may still be looked at as part of your marriage because you may have shared in it. Allowing the credit card debt accumulation to continue may be considered a “tacit agreement.”
If you’re in a situation where you did not know about a credit card that your spouse opened, the allocation of the debt will vary on a court-by-court basis and be based on the specific facts of a family’s case. For instance, if one spouse opened a credit card without the other’s knowledge because the other person has money controlling issues, that would be looked at differently compared to opening a credit card and using it for secret luxury purchases.
Financial abuse in the form of keeping someone completely in the dark about money could be a defense to taking on a spouse’s credit card debt. An example of this would be a stay-at-home spouse and the other spouse, who is the one bringing in income, having control over all the finances, including credit cards.
If the stay-at-home spouse never gets to see anything or be aware of anything related to finances and is just given enough money to take care of the household, they can claim they had no idea about any credit card debt incurred by the breadwinning spouse and should not have to carry any of the burden.
In that case, it would be necessary to determine whether it was abuse or the kind of control you agreed upon. The court may ask whether you wanted to be involved in the finances, wanted to know what was going on, or voluntarily relinquished financial control to the other person. If you willingly gave your control over to your spouse, it’s not abuse because you said you didn’t want to have to deal with it.
Many factors can impact the court’s decision on whether and how to divide a couple’s credit card debt. A family law judge would examine whether either spouse has been overspending as the separation date approaches. For example, buying an elective surgery or paying for expensive trips with friends or a new significant other may not be divided between you and your ex if the purchases do not benefit the marriage.
Additionally, an Alpharetta court is going to look at the estate as a whole when deciding how to divide credit card debt between divorcing spouses. For instance, if the wage earner is paying off those credit card debts, they may receive more marital assets in return.
Furthermore, many divorcing spouses wonder what credit card payments they can cut off before filing for divorce, but this can get tricky and could make an individual look bad if they start doing things that aren’t necessarily status quo to the household.
If you have high credit and a lot of credit available to you, however, you probably should limit your spouse’s spending because you don’t know what they’re going to do when you approach them with a divorce, and you don’t want to end up having to fight about any debt they incur before going to court. If you added your spouse as a signatory to your credit card, you’ll want to remove them as a signatory immediately.
On the other hand, if you have a stay-at-home spouse who has significantly less income than you, and they use that credit card for family needs on a regular basis, you should not cut that card off. The court is not going to look kindly on you for trying to play that financial game of forcing a settlement in a divorce case by cutting off finances.
Many people don’t want to speak to an attorney until they’ve paid off all the credit card debt first, but it’s more advantageous to speak to a lawyer about the reality of your finances so you can strategically plan for how to be in a better place post-divorce. The first thing you need to do is pull your credit report to discuss dividing credit card debt in Alpharetta with legal counsel in preparation for your divorce.