Divorce and card debt in community property states

To Her Credit columnist Sally Herigstad
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 wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question for the CreditCards.com expert

Dear To Her Credit,
I am an authorized user on my husband's credit card. We are separating. I am willing to assume half the debt on the card and move it off his card and onto mine. But, if he doesn't pay his portion, can they come after me for his portion?

The other way I can do it is to leave the balance on the card and make payments to that card to pay off my balance. I could keep track of the payments as proof that I was paying off my portion. But again, I don't want them to come after me if he spends the money I put down as payments and the entire balance is still due.

Any guidance would be appreciated. He had the card before we got married and added me. But since the debt was acquired during our marriage, I wonder if I'm accountable since we were married. We live in Idaho.   -- Mandy

Answer for the CreditCards.com expert

Dear Mandy,
You are correct, unfortunately. The Idaho office of the Attorney General states that, "In Idaho, a community property state, both spouses may be responsible for any debts incurred while they are married. Even individual debts may appear on each spouse's credit report." In addition to Idaho, the other community property states are Arizona, California, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an opt-in community property state.

Your liability is not the result of being an authoirzed user, as authorized users typically are not held responsible for any balances on the shared card. However, you may be jointly liable for this debt because you lived in a community property state when the debts were incurred.

As a result of this joint responsibility, if one spouse doesn't pay, the other one must, or risk credit damage and collection actions. The credit card company doesn't see it as his share and your share. They see one debt, and if they can't collect from him, they'll try to get the entire balance from you.

You are also right to be concerned about your soon-to-be-ex paying his share of the credit card bill. Past financial habits are hard to break, and you know his habits well. If you're worried that he'll not only let you make the payments, but spend more on the accounts, you're probably right.

The first thing to do is to notify the credit card company about the divorce and ask them to freeze the account. You can do that by calling or writing to the credit card company. If they won't freeze the account because you are just an authorized user, ask your husband to freeze the account, or seek legal help. Freezing the account stops him from adding to the problem. Do that today.

Next, look to the divorce court for help with the debt. The divorce court can't change your obligations to the credit card company. However, it can divide up your community assets and decide who should pay each debt. If the court says, for example, that your ex should pay half of the credit card debt, and he doesn't pay, he can be in trouble with the court.

If possible, you should try to have all community debts paid for as part of the divorce settlement. You and your husband may be able to each apply for individual cards and transfer your share of the balances to them. Better yet, maybe you have community property, such as a motorcycle, boat or investments, that you can sell to pay off all your joint debts.

You'll need good legal help as you go through a divorce. You have a lot at stake, and the rules can be complex. When you're starting a new life on your own, the last thing you need is to be tied to old debts with your ex. Find a way to ditch the joint debt so you can move on.

See related: Where you live impacts debt liability in divorce, How to dissolve joint debt after divorce

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Updated: 11-25-2017