How To Divide Credit Card Debt in An Agreed Divorce

Hey, what's up everyone? Divorce attorney Bobby Buchanan here. This is Illinois divorce TV where I take you down the pragmatic path to getting divorced. Today I want to talk to you about how do you split credit card debt in an agreed divorce or really kind of what is the best way to do it or framework to think about it. As you sit down with your spouse and you talk about what you're going to do with the credit card debt that may have accumulated while you were married. Well, I think a, a pragmatic approach to this would be to look at what credit card debt. Let me back up here. Let's talk about what the law is because that's ultimately going to be the foundation that you would negotiate around if your case does get into court. So that might be helpful. As you negotiate out of court, you can obviously negotiate around any sort of framework that you and your spouse agree on.

You might both agree that the law doesn't make a whole lot of sense and what you feel like is more fair is some set of ground rules that you to agree upon. And as long as that doesn't deviate wildly from what the law is, then you shouldn't have a problem. I mean, ultimately two parties are allowed to contract with each other for the end of their divorce and any way that they see fair, as long as it's not what the law calls unconscionable and unconscionable is this big word that basically means extremely unfair, somewhat so unfair that the judge can't swallow the pill. That is the fact that two consenting adults, you know, negotiated this contract. But I digress. The framework, the law as far as dividing debt is going to be a, an equitable division of the marital debt. Now what does that mean? An equitable division is a fair division.


What is marital debt? Well, marital debt is any debt that's been acquired during the marriage. So usually a fair division of that debt is 50, 50 especially if the debt is kind of your standard living expenses. And that sort of thing. If it is debt that's more in the nature of a growing a business or say student loans, there might be a different calculus to look at what is a fair allocation or division of this debt. So that's kinda your legal there. Kind of as an aside or an additional question. Well, what about after you're separated? Is the debt that you've accrued after you separate? Is that marital debt as well? The answer is yes. There is no kind of exception or division for after you separate that, that, that your other spouse or cruise isn't marital anymore. So you could actually be on the hook for part of their debt.

That being said, and it wouldn't be uncommon for a court to say, you know what, you're going to be responsible for all the debt you acquired after the separation and you're going to be responsible for all the debt the other spouse acquired or that, if that makes sense. Each party is going to be responsible for the debt that they accrued after the separation. And that's probably where I would start if I was trying to make a pragmatic decision on a how to divide the debt. And I was sitting down with my spouse and saying, you know, what should we do with this $15,000 of credit card debt that we have with this card and that card and this joint card and this, you know, car that's only in your name and this one's only in my name. I think one route to go and say, let's just do what the law says.

Let's look at what was accrued during the marriage and let's just divide that 50 50 I'll be responsible for this half. You be responsible for that half and we can go our separate ways. Another way to do it, you might decide that it's fair to say, okay, after we separated we really started doing our own thing. So it doesn't seem fair that I would be responsible for yours and you'd be responsible for mine. So in that case, let's just leave that off of part of the calculus. Let's just look at what was accumulated. Wow. We were actually together and we can split that. That's kind of the second way that I might think about doing it. The third way that you could think about doing it is, Hey, you know what? We kind of lived our own separate lives here. Even when we're married, I bought my stuff, you bought your stuff.

But we really thought about this as our own debt. So even though the law says that it's our debt together, and even though our credit cards are maybe even joint credit cards, this was the one that I always, always used and this is the one that you always use. So why don't we just be responsible for the debt that we actually you know, we, we accrued ourself because of our own decisions. Great. Sounds like a good decision to me. There's, that's the general high level framework. So what you do at that point is negotiate around the edges. There might be some little things here and there that you think are an exception to the framework that you've created, but you've ha, you've answered the big question of kind of what framework are we using to figure out the division of debt here? What is fair for us? What's fair for our, our personal, unique situation? I hope this has helped. I hope you're able to divide your debt in the most efficient manner possible. Let me know in the comments whether or not you think what I'm saying makes any sense is a logical approach or let me know. If it's not, I'm happy to hear it both ways. I'll talk to you soon.

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About the Author

Robert Buchanan is the founder and manager of The Law Office of Robert B. Buchanan.