What happens to credit card debt in divorce?
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What happens to credit card debt in divorce?
When you get a divorce, you are still responsible for any debt in your name. Most states follow “common law,” which means that a court will hold you responsible for any credit card debt that is solely in your name, and will hold you jointly liable for credit card debt that is in both your name and your spouse’s name.
What happens to debt in divorce?
As part of the divorce judgment, the court divides the couple’s debts and assets, while deciding who is responsible for paying specific bills. Each state has its own laws for dividing debts and assets. Some states consider the assets and debts each spouse brought into the marriage.
Does getting divorced ruin your credit?
Divorce proceedings don’t affect your credit report or credit scores directly. Rather, you may see an indirect effect because the divorce process often involves splitting up joint accounts, which can very much affect your credit history and credit scores.
Can a spouse ruin your credit?
Fortunately, your spouse’s past credit history has no impact on your credit profile. Only when you open a joint account will any information be shared on both of your credit reports. However, when you want to buy a home together, your spouse’s negative credit history could impact your mortgage rates.
How is debt calculated in divorce?
Ultimately, the courts will determine how to divide marital debt in a divorce. For them, the person who borrowed the money is the responsible party, and they will reach out to that person in order to collect on the debt.
Who is responsible for marital debt?
If you live in a community property state, you can be held responsible for debt incurred by your spouse even if you were unaware of the debt and did not sign an agreement with a creditor. In other words, in a community property state marital debt is considered joint debt — debt that you are both responsible for.
