Saying goodbye to an ex in Texas doesn’t mean credit card debt automatically disappears. In fact, credit card companies typically have a legal right to make efforts to collect debt owed by both spouses following a divorce. This is why it’s widely recommended that newly divorced individuals make an effort to leave a marriage free of debt obligations. Plus, having lingering marital debt opens an ex up to the possibility of attempts by creditors to obtain what’s owed should a former spouse file for bankruptcy or fail to make scheduled payments.
Credit card debt incurred prior to a divorce is usually the responsibility of both parties as long as they were both co-signers. However, if the other spouse was only a joint cardholder but not a co-signer, they are normally not responsible for the debt. One possible exception is in states – like Texas – where community property laws apply. After separation, any further debt incurred on cards is the responsibility of the individual making the charges. Since the date of legal separation varies by state, soon-to-be-divorced spouses are encouraged to keep accurate records of credit card activity.
One potential way for newly divorced individuals to handle credit card debt is to simply cancel all jointly held cards and get new ones in their name only. Filing documentation with the court as soon as it becomes clear that a divorce is going to occur is another step that may prevent one spouse from adding to joint debt before a marriage is legally over. In some instances, a soon-to-be-ex may be able to use joint savings or tap into a home equity line of credit to free themselves of marital debt obligations.
For times when it’s not possible to avoid carrying over debt from a divorce, an attorney may be able to structure a divorce decree in a way that makes it clear who is responsible for any existing debt obligations. If there is a need to file for bankruptcy, a lawyer might suggest doing so at the same time a filing for divorce is done to minimize joint credit card debt issues.