Bankrutpcy Help with Credit Card Debt After Divorce

Debt and divorce are sadly familiar bedfellows.  Over the course of a souring marriage, credit card debt can mount quickly, and even more rapidly during the process of a divorce. There are several considerations regarding credit card debt during and after divorce, and various options, including bankruptcy, available to deal with such debt. 

During the Divorce

If you and your spouse have credit card debt, you should take specific steps to protect your interests: 

• Get a copy of both of your credit reports to determine the specifics and extent of your credit card debt.  During this period, it is very common for credit cards to be opened and used liberally by a spouse without the other’s knowledge, so a current credit report will help protect you. 
• For cards that you hold together, agree to rescind one or the other spouse’s authorization on that card and/or close joint accounts.  This will not minimize the liability prior to this point, but it will mitigate mounting debt during and after divorce. 
• Be sure to assign specific responsibility for credit card debt.  Each card and balance must be divided, and time limits set by which they must be paid off in full.  Most importantly, it must be clearly stated in your divorce settlement that if these bills are not paid in full, or if the spouse files for bankruptcy to get out of credit card debt, that the other spouse is in no way responsible for the debt. Be aware, though, that creditors won't necessarily accept these divorce settlements and if your name was on the debt and your spouse declares bankruptcy, they may well come after you for it.

After the Divorce

For a spouse who is burdened with credit card debt, facing life after divorce can be extremely difficult.  If you are in that situation, you may no longer own a home and may not have other valuable assets that you can sell, or liquidate, to help pay off your creditors.  You may be responsible for children, be taking on new work in a new location, and as a result, credit card debt can seem like an insurmountable obstacle.

It is for this reason that many people turn to bankruptcy as their assumed only option.  Filing for bankruptcy means that credit card agencies can no longer hound you for the money you owe them.   While bankruptcy can give you relief, you must remember that bankruptcy will remain on your credit report for at least 10 years, and will make it very difficult for you to get credit for cars and other possibly necessary loans. 

Getting Help

Be careful to consider your other options, such as debt settlements, negotiating directly with your creditors, etc. before jumping to bankruptcy to help you through divorce credit card debt. If you do decide to declare bankruptcy, or are thinking about it, a consultation with an experienced bankruptcy attorney can help you to better understand your options and what bankruptcy will do for you.