When people in New Jersey decide to divorce, they may be particularly concerned about the financial effects of the dissolution of the marriage. While many people think first about how to divide assets in a split, it can be just as important to consider how debts will be divided. Credit card debt accrued during the marriage isn’t assumed to belong equally to both partners so long as it was accumulated only under one person’s name. It should be noted, however, that debt being under one person’s name does not prevent it from being considered a marital obligation, depending on the circumstances of the debt.
However, many married people hold joint credit cards, and with those comes joint credit card debt. For people choosing to divorce, eliminating joint debt can be a key priority to prevent future unpleasant surprises and finalize the financial separation between former spouses. Once the distribution of the debt has been agreed upon in divorce negotiations, joint credit card debt can be transferred to accounts in one name only, or the debt could be paid off during the distribution of marital assets.
Creditors, after all, are not subject to the divorce decree. If joint debt remains in place and one partner declares bankruptcy after the divorce, the other spouse could be held liable for the amount of the joint debt. While he or she could go to court to enforce the divorce decree’s distribution of debt, this could be fruitless if the former spouse is destitute and unable to repay a judgment.
Because the financial effects of divorce can be so long-lasting, it can be critical for people to head into a dissolution with a clear financial plan. A family law attorney might help a divorcing spouse to seek a fair settlement on critical issues including property division and spousal support.