Is wife liable for ex's card debt?
To Her Credit
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also writes regularly for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs. See her website SallyHerigstad.com
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Dear To Her Credit,
One of my relatives has a credit card. The husband can sign on
the card, but not the wife. My relative's husband charged two cards up to the
limits of $7,000 and $15,000, and then hid the U.S. mail from his wife for
Their divorce is now in progress. I do not know what the
money was spent on. Is my relative responsible for her husband's charges? -- Lily
The wife is generally not liable for her husband's credit
card debts in non-community property states, provided that she is just an authorized user on the account -- not a joint
In community property states, however, creditors can pursue
a spouse for community debt, and the spouse is presumed to be liable unless she
can show otherwise. The community property states are Arizona, California,
Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an opt-in community
In the divorce decree, assets and liabilities are divided
between the husband and wife. If the husband was spending money and not telling
the wife, she probably did not benefit from the expenditures. In fact, he may
have been spending the money on wayward ventures that contributed to the
divorce. The judge in the divorce case should take into consideration these and
any other property transfers or extraordinary expenses when allocating assets
and liabilities to each spouse.
If at all possible, these credit cards should be paid off as
part of the divorce settlement, especially if she is in a community property state.
Many people make the mistake of thinking that a divorce decree gets them off
the hook for a debt. Unfortunately, the divorce court has no jurisdiction over
contracts with outside parties. The divorce decree can tell the husband to pay
the credit card bills, but it can't stop the creditor from trying to collect
from the other party if he doesn't.
Whether you live in a community property state or not,
creditors can attempt to collect from both spouses, forcing the spouse who
didn't spend the money to defend himself or herself. That's another good reason
to see that the debts are paid.
The wife in this case should immediately make a list of all
accounts -- investment, mortgage, insurance, and so on -- and document their
status. She should also check her credit report and make sure there are no
other accounts she's not aware of.
If she and her husband have any joint credit cards or bank
accounts, she should notify the banks of the pending divorce and close as many
accounts as possible immediately. Make sure she follows any rules of the divorce
court, so she doesn't end up being the one in trouble.
I hope your relative has a good lawyer. If her soon-to-be ex
is capable of this type of sneaky behavior, what else is he capable of? Forging
signatures and draining retirement accounts? Sneaking money out of the house
with secret home equity loans? The credit card debt may be insignificant
compared to other damage a shady ex like this can do.
See related: Stuck with husband's debt in community property state?, 8 things cardholders should know about community property laws?
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Published: May 3, 2013