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How credit card debt is handled under family law

On Behalf of | Oct 26, 2020 | Uncategorized

When people talk about property division in a divorce, minds often go to splitting assets. But shared debt can be just as important a consideration as shared bank accounts or real estate, especially if it’s sizeable. While some North Carolina couples parting ways may just split credit card debt down the middle, others may wish to consider their family law options to pursue a different resolution in the interest of fairness.

The first thing to consider is whose name a credit card is in. From the bank’s perspective, only the authorized account holder would be liable for debt. With a joint credit card, this would be both parties; however, if one person is the holder of a card, the bank will only go after them for payment. However, what if the card was used by both parties in a marriage or was used to acquire marital property or pay for marital expenses? Would that person still be solely liable?

North Carolina does not follow community law, which means assets and debts are not automatically split 50/50. Instead, common law governs these issues, and generally will find that the card holder is responsible for debt under their name. That being said, there are ways to raise issues of unauthorized spending to the courts in order to make the other party wholly or partially responsible for the expense. This may be particularly relevant in cases where gambling or overbuying is involved.

Debt is not the only consideration with shared credit cards. Points, gathered over a matter of years or even decades, could be in play during a divorce. Whatever one’s concern with regard to credit cards when going separate ways, it can help to speak with a North Carolina family law attorney to understand legal options and how common law may play out in one’s case.