Credit Card Debt and Divorce in NJ

One of the most common concerns during a divorce is who will pay for credit card debt. Pursuant to New Jersey matrimonial law, it does not matter whose name is (or is not) on the credit card. Regardless if a credit card is in one spouse’s name or if the card is in joint name, the debt will be the responsibility of both parties if it was an expense which benefitted the family or household.

The key issues are 1) whether the debt was incurred during the marriage, and 2) whether the debt benefitted the household or family. Any credit card expense that was the sole responsibility of one of the spouse’s prior to the marriage remains that spouse’s sole responsibility. Likewise, credit card expenses incurred after the filing of a divorce complaint usually are not considered joint marital debts. However, credit card bills that were incurred during the marriage for the benefit of the household will be deemed a marital debt, subject to equitable distribution between the parties. Thus, household or family expenses such as groceries, utilities, clothing, medical bills, etc. will be the responsibility of both spouses.

In many cases, one spouse incurs credit card charges solely for their own purposes with no benefit to the other spouse or to the family. These debts are considered “non-marital”, and thus will not be divided between the parties. For example, if one spouse uses the credit card to pay off their gambling debts or to buy gifts for their girlfriend/boyfriend, these debts will remain that spouse’s sole responsibility.

Your matrimonial attorney will help you determine and negotiate which credit card expenses are joint marital debts and which expenses are non-marital. If an agreement is reached on the issue, the decision will be placed in a Matrimonial Settlement Agreement. Your attorney can make sure the Agreement contains language that will protect you or hold you indemnified should your spouse fail to pay their share of the debt.

If the parties cannot reach an agreement with regard to credit card debt, a judge may be required to decide how to “equitably distribute” those debts, either by splitting them 50/50 or by allocating a percentage to be paid by each party.

If you are going through a divorce, you most likely will be dealing with credit card debt issues as well as other financial issues. It is important to consult with a knowledgeable matrimonial attorney. At Edens Law Group, we have experienced matrimonial lawyers who are ready to help protect you and secure your financial well- being throughout the divorce process. To schedule a free one hour strategy session, call EDENS LAW GROUP at 908 879 9499 or visit our website at www.edenslaw.com.