Dissolving joint debt post-divorce dicey

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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Dear To Her Credit,
My friend and her husband got divorced. The judge refused to order a split of their joint credit card debt (both were ordered to make minimum payments, seemingly indefinitely). The amount owed is quite large -- $35,000 or so.

Will a credit card company allow them to split the debt? She would like to pay off what she owes immediately, but she does not want to pay his share. She's afraid that if he misses a payment on what's left, it will ding her credit -- even if she had already paid up to $18,000 herself.

Can she pay the whole $35,000 balance and then sue him for the difference if he does not pay her back? Can she place a lien on his home (won during the divorce)? He is extremely difficult to deal with. -- Marsha


Dear Marsha,
When the credit card company has a contract with two people, the divorce court doesn't have the power to change the terms of that contract or to force the credit card company to split the debt between the two parties. Banks don't like to release one person from a joint debt -- especially if the remaining accountholder is a poor credit risk.

Unfortunately, this situation happens all too often. Splitting assets with an ex is bad enough. Maintaining joint responsibility for debt when a marriage is over is worse. The more responsible ex-spouse can feel punished when they're stuck with the consequences after the other ex stops making payments.

If your friend has any leverage with her ex-husband, the best way out of this situation would be for the two of them to completely pay off the debt and close the account. Perhaps she can convince her ex-husband to get a home equity line of credit and pay off his share of the debt. Or her ex could apply for a new credit card of his own and transfer his balance to it. He may even have a parent or other relative who is willing to help him sever financial ties with his wife.

She could pay the entire balance herself, hoping he will then pay her back, but that sounds risky. If she's worried about him not making regular payments to the bank, what are the chances he'll keep making payments to her? When he defaults, as he surely will, she could try to collect from him in court, even to the point of putting a lien on their former home. However, going to court is expensive and time consuming. Many people "win" in court, only to have spent more money than they actually collect. I'd recommend avoiding this scenario altogether.

Your friend does have one thing going for her. The divorce court ordered him to pay his share of the debt. If he does not pay, she can take her ex-husband back to court for not abiding by the terms of the divorce. He would be considered in contempt of a court order, which is serious business. He can be made to pay not only the credit card payments, but her attorney fees and court costs.

Your friend may worry that his next step will be to file for bankruptcy. If he does, the credit card company has the right to expect payment from her. Even the divorce court won't be able to help her in that case.

Your friend should try to get him to take out his own line of credit or use other means to pay off the balance. If he refuses, she should watch the account carefully, so she can take legal action through the divorce courts quickly if he falls behind on payments. It's impossible for your friend to make a completely clean break from an ex-spouse, especially a difficult one, as long as she still owns joint debt with him.

See related: Debt and divorce: 5 steps to make a clean credit split, How to dissolve joint debt after divorce

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Updated: 11-22-2017