Regardless of how amicable your divorce may be or the divorce route you choose to pursue, divorce is a financially challenging process. With that being said, before couples embark on this intricate legal process, they often wonder what will happen to their joint credit cards. Understanding how joint credit cards are handled in a divorce is critical as it can affect your overall financial security if you do not understand your financial obligations. If you are dissolving your marriage, it is in your best interest to contact our seasoned Monmouth County Divorce & Separation Attorneys who can help you protect your finances during this complex legal process. In addition, keep reading to learn whether closing your joint credit cards can protect your finances during your divorce.
Should I consider closing my joint credit cards?
If divorce is imminent, you should consider closing any joint credit cards you have with your former spouse. It is important to note that New Jersey is an equitable distribution state. This means marital property is divided fairly, not necessarily equally. If your former spouse has accumulated significant debt on a joint credit card during your marriage, the judge may assign a portion of that debt to you during the division of assets. Essentially, that means you may be responsible for repaying a portion of your former spouse’s debt. Even if the court does not order you to pay any of the debt, the credit card company will still hold you accountable for repayment as you are both named on the account. Ultimately, debt collectors do not care whether you are divorced. They will still contact you to collect the money they are owed.
Further, if your former spouse decides to go on a revenge shopping spree, accumulating debt to financially burden you, you are liable for those funds. To protect your finances, you should close any joint credit cards you have to ensure your former spouse will not be able to accumulate significant debt. If they have access to your finances, they could drain the account to damage your financial security. It can also damage your credit score which can hinder your ability to obtain loans. To protect yourself from being liable for your former spouse’s debt, you should close any joint credit cards you have open.
How can I close them?
Many couples decide to open joint credit cards as they are a convenient way to share finances. However, some couples decide to grant their spouse authorized user status instead. Authorized user status allows your spouse to use the credit card, however, the account is not in their name. If this is the case, your former spouse’s authorized user status can simply be revoked by contacting the credit card company directly and having their status removed from your account. If this is not the case and you have a joint credit card where both of your names are on the account, the process of closing the card is more complex. Typically, credit card companies need consent from both parties to close a joint credit card. Additionally, they usually require the balance to be paid in full. If your former spouse will not consent to close the card or you cannot pay the balance of the card, you can transfer the amount in your account to a balance transfer card in your name only. This will ensure your finances are protected from your former spouse.
For more information, please contact one of our skilled and determined team members. Our firm is committed to helping our clients protect their finances during this complex legal process.
