Many Illinois couples whose marriages are ending may be concerned about how to divide their assets during a divorce, but it can be just as important to consider how credit card debt will be split. When debt was incurred on a jointly held card, it belongs to both of them, and despite the text of the divorce decree, the credit card company retains its ability to pursue either party. Financial experts often advise that people seek to exit their marriages without holding any joint debt. While it may not be possible to pay off all joint credit cards, people can transfer debts to cards in the name of the individual partners, depending on their agreement about how to handle them.
The process of eliminating joint debt also means cancelling any outstanding jointly held credit cards so that no future debt can be accrued. If joint debt remains in that form after a divorce, people could be held responsible long after they agreed to separate, including terms for the handling of the debt. Just as the specific division of property is important to include in a divorce settlement, so is an agreement for the separation of debt.
Credit card debt in the name of only one partner is generally not the responsibility of the other party in states like Illinois, where principles of equitable distribution apply to property division. Filing documentation with the court about the details of the debt can help to document the process as it moves forward.
The financial effects of divorce can linger long after the emotional and practical issues have largely been resolved, and this is certainly true of credit card debt. A divorcing spouse can work with a family law attorney to discuss the financial impact of the split and negotiate an agreement on property division and other key issues.