Credit Cards and Accounts After a Divorce

Thursday, January 7, 2021

    Although a Judgment of Dissolution may assign certain debts to one former spouse, the other former spouse may also still be liable on these debts.

    If you were liable prior to a divorce, you are likely still liable after a divorce.

    You may have a right of reimbursement from your former spouse if the creditor comes after you for payment on a debt that was assigned to your former spouse in the divorce, but the creditor likely still has the right to come after whichever former spouse he wants to if both of you were liable before the divorce, regardless what the Judgment of Dissolution says.

    It can be very important, therefore, to keep track of these things.

    It is also important to realize that these issues are not limited to credit cards.

    If you both were liable on a mortgage, for example, you are likely both still liable after the divorce, even if your former spouse received the house in the divorce.
    Hopefully the Judgment of Dissolution was crafted in such a way that you can force the sale or refinance of the house, to remove your name from the mortgage, if the property was awarded to your former spouse.

    If you cannot do this, you may never qualify for a mortgage yourself, so long as the original mortgage for the house where your former spouse is living has not been paid off.

    Sometimes Judgments of Dissolution do not provide a way to force your former spouse to refinance the house, and remove you from the mortgage, however.

    Sometimes even good Judgments of Dissolution do not do this where, for example, your former spouse lives in the house with under age children, and your former spouse does not have the ability to refinance the house.

    On the other hand, sometime you are the one who has been awarded a piece of property, but that award was subject to a duty to refinance the house.  This can be a very different circumstance, and will be dealt with in a separate article.

    Turning to other kinds of debts, in addition to credit cards and debts for real estate, many people have other kinds of credit accounts.
    Sometimes these are home equity lines of credit (HELOCs).  Other times these are accounts at furniture stores or the like that have a current balance of zero, but which still exist, and against which your former spouse could charge in the future, potentially making you liable under the account.

    It can be very important to run a credit report on yourself, and to be sure that both you and your spouse have taken care of all credit issues that may arise.