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Who pays credit card debt during a divorce?

On Behalf of | Aug 16, 2023 | Divorce

When the marriage is over and divorce is underway, there are a number of aspects the couple must take care of. One of these is the division of marital property – any assets and debts acquired during the marriage. 

It is not uncommon for a couple to take out a credit card or two. So, who is responsible for credit card debt during the divorce?

Understanding New York property division laws

Marital debt follows the same division principle as marital assets. In other words, any debt encumbered during the marriage is subject to equitable distribution per New York marital property division laws. The court will review the totality of the situation in order to arrive at a decision that it deems fair to both spouses.

Dividing credit card debts

Credit card debts are unlike any other debt. In deciding how credit card debts are split, the court will generally take into account the nature of the credit card contract as well as what it was used for. Here are two common scenarios:

If the card is jointly held by both parties – if the card is in both spouses’ names, then it is legally their responsibility. Consequently, the debt will be split equitably provided that it was used to make purchases that advanced the household’s interests like paying for groceries, healthcare and other household needs. 

However, if one spouse used the card to advance personal interests, like financing an affair or gambling, then the judge may rule that they pay up the resulting debt. 

If the card is in one spouse’s name – in this case, the spouse who took out the card is legally responsible for it per the contract they signed with the credit card company. That said, if they used the card to finance the household’s interests, then the judge may divide the resulting debt equitably. 

If, however, they used it for personal interests, then they will solely be responsible for the debt. 

Credit card debt can be a tricky subject during property division. Understanding how New York property division laws work can help you assert your rights and safeguard your interests when dividing debts that arise from credit card use during marriage.