Couples get divorced for myriad reasons. From infidelity to financial problems, once united partners find themselves at odds and looking to get out of their marriage. Yet, while the union ends, debt-related issues will still play a major factor following the separation.
Many spouses have a credit card in both names, or one was a co-signer, making both equally liable for the outstanding balance post-divorce. Simply put, debt in any spouse’s name makes them responsible regardless of who used or maxed out the account.
Who is responsible?
Louisiana is one of nine states that adhere to community property rules, meaning both spouses are responsible for debts incurred during the marriage. Regardless of who opened or cosigned for an account used for purchases, soon-to-be exes are both held accountable.
Exceptions do exist that create complexities. Judges may assign credit card debt to one spouse, regardless of whether they are liable to pay it back. At the same time, a finalized divorce does not affect a signed contract with a credit card company. Creditors can still go after the spouse responsible, even if the other racked up the debts. Remedies exist that allow one spouse to sue their ex-partner for non-payment of the account balance.
One of the more significant penalties involving debts is the impact on credit scores, particularly when one spouse co-signed and listed the other spouse as an authorized user. Account payment history is paramount to FICO scores. Late payments chip away at the most responsible credit users.
Open lines of communication following the finalization of divorce are challenging for some. However, remaining in contact with your spouse, whether civil or uncivil, can continue the ongoing dialogue regarding credit. Ending a marriage creates too much uncertainty to add money problems on top of everything else.