Dividing your property when you are getting divorced involves splitting up both assets and marital debts. It is important to understand how debts are split between spouses in a divorce in New Jersey so that your rights are protected and you do not agree to pay back an unfair portion of your credit card debt.
How Are Credit Card Debts Divided in a New Jersey Divorce?
New Jersey is an equitable division state, which means that the court will consider a couples’ debts and assets in deciding how they should be fairly divided. Both spouses will be considered liable for paying marital debts, including their credit cards.
The judge will split marital debts equitably, but this will not always result in the credit card debts being split in half. Some of the factors that the judge will consider in deciding what is fair include:
- Length of the marriage
- Spouses’ health and age
- Any income or property that a spouse brought into the marriage
- Spouses’ income and earning capacity
- Contributions of one spouse to the other’s ability to earn income
- The parties’ economic situation after the marital property is divided
When Credit Card Debt Is Considered Marital Debt
It is important to remember that the judge will only divide marital debt in a divorce. Credit cards are considered marital debt if the following conditions are met:
- The credit card debt was incurred during the marriage.
- The credit card debt was used for household necessities or for the benefit of the couple, such as for medical bills, food, clothes, furniture, or car repairs.
Note that the credit card does not need to be in both spouses’ names for it to be considered marital debt.
What Are Non-Martial Debts?
Some credit card debts will be considered non-marital debts even if they are incurred during the marriage. They include:
- Credit card debt incurred before the marriage.
- Credit card debt acquired after the marriage ended. This date can be when the couple separated or when the divorce was finalized.
- Credit card debt incurred during the marriage but not for the benefit of the marriage.
- Credit card debt acquired by one spouse, which is considered a misuse of marital credit. This can include debts incurred for gambling, drug use, or an affair.
In the Garden State, non-marital credit card debts must be paid by the spouse who acquired them. If there are enough marital assets to pay the debt, the judge can deduct the amount of the credit card bill from this spouse’s property settlement.
How to Preserve Your Credit After Your Divorce
You want and need good credit as you start your new life after your divorce. The credit card companies are not a party to your divorce and are not bound by any agreement between your spouse and you or a court order as to how your marital credit card debts will be repaid. If you have a joint credit card with your partner and he does not make the payments on time, it can affect your credit too.
You can take proactive steps during and after your divorce to protect your credit. Here are some strategies that can help:
- Pay off and close joint accounts. If possible, you should pay off any joint credit cards and close the accounts so no additional amounts are owed before your divorce is finalized. You may need to obtain a loan or withdraw the funds from a savings or investment account to do this.
- Manage ongoing accounts. It may not be possible to pay off all joint credit cards. In this situation, you should try to work with your spouse on paying off the debt. The credit card company may not agree to remove your name from the account but may freeze it so that no additional purchases or cash advances can be made. Even if your spouse is paying the monthly payment, you should keep online access to the account and check regularly to be certain that the payments are being made.
- Establish your own credit. If you are considering filing for divorce, you should obtain credit cards and other credit in your own name. When doing so, it is important not to incur debts you cannot afford to pay and to make all payments when they are due.
- Check your credit report. You should check your credit report regularly to be certain that it is accurate and that your spouse has not used your identity to incur debts in your name. Under federal law, you are entitled to a free credit report annually.
Call Our Flemington, NJ Divorce Attorneys to Schedule a Private Consultation Today
Are you considering filing for divorce in New Jersey? Our experienced divorce attorneys are here to explain your legal rights and how divorce works in New Jersey. We represent clients in Hunterdon and Somerset County. To learn more about the solution-oriented approach we take in these cases and how we can assist you, call our Flemington office to schedule a private consultation.