Most people realize that divorce courts decide issues of custody, award support and distribute property. But an often overlooked aspect of a divorce is the assignment of debt and liabilities. And credit card debt in a Connecticut divorce often gets overlooked the most.
Unlike community property states, Connecticut divorce courts apply the concept of equitable distribution. This does not mean equal. Equitable means fair as decided under the circumstances of the case.
Credit card debt is one of the debts/liabilities that a court can assign to one spouse or the other.
As a general rule, spouses will be liable for those credit cards which are solely in his/her name.
The more difficult issue is the assignment of liability for joint credit card debt.
Judges will consider the following:
The amount of the debt;
When the debt was incurred;
For whose benefit the debt was incurred; and
Which spouse is in a better position to pay the debt. This factor is not limited to the income of the spouses but also takes into account the resources of the spouses as part of the distribution of property and support orders. Judges are careful not to undermine other monetary orders when assigning debt.
A few notes:
Credit card companies will likely pursue both spouses for payment of the debt notwithstanding that a judge ordered one spouse to pay. If the spouse fails to pay a Motion for Contempt must be filed.
Some spouses are not aware of what credit cards exist. Therefore, if you are contemplating a divorce (or going through one) order your credit reports.
Keep in mind the distinction between co-signers (both liable) and an authorized card holder who assumes no liability for the debt.
Finally, if possible, leave the marriage debt free. In the event a former spouse fails to honor the court order to pay a debt the judge cannot fix your credit. Use marital assets (i.e. sale of a home) to pay off debt and give yourself a fresh start.
Contact me by email or call me in Fairfield at (203) 259-5251 or in Stamford at (203) 356-1475 if you have questions about divorce in Connecticut.