Joint Credit Card Debt

Who’s Responsible to Pay Joint Credit Card Debt After Separation or Divorce?

Getting divorced can affect your finances and require the legal separation of capital and assets.

Consequently, it’s not uncommon for couples in the process of getting separated to question their legal responsibility when it comes to debts.

The debt accrued by one spouse before the divorce doesn’t affect the other.

However, the joint credit card debt can become a legal dilemma when it comes to credit cards issued in the names of both spouses or partners.

Who will be charged for the outstanding balance on a joint credit card after the couple separates?

To provide a clear answer, it’s essential to understand that the legal liability for joint credit card debt depends on many factors.

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Is it really a joint credit card debt?

While both partners could be using the same credit card account, it doesn’t make it automatically a joint credit card.

Some credit card companies allow for the addition of a secondary cardholder on a single credit card account.

In this instance, the terms and conditions of the credit card agreement define who is responsible for the accrued debt.

When your credit card agreement refers to a joint credit card account, both ex-spouses are liable for the joint credit card debt.

However, some credit card companies are willing to reconsider liabilities under specific conditions.

A single credit card account issued in the name of one spouse will not help the other spouse liable for any debt.

Can you cancel the credit card?

You can cancel a joint credit card after a divorce.

However, the process of cancellation doesn’t affect the joint credit card debt.

It only affects the card itself.

In other words, joint credit card debts can’t be removed when the spouses go through a separation.

How to use a joint credit card after a divorce or separation?

Joint credit card account and their debts can’t be separated or cancelled through a divorce agreement.

Both ex-spouses remain liable for the debt, regardless of the divorce process, until the debt is repaid.

While attorneys can choose to assign the credit card debt repayment to one party as part of the separation agreement, credit card companies don’t recognize the division of liability.

For example, a divorced husband is required to repay the joint debt as per the divorce negotiations.

If he falls behind repayments, the credit card company can turn to the other ex-spouse for the repayment of the balance.

When one of the ex-spouses files for personal bankruptcy, the debt isn’t cancelled.

Instead, the other former partner will have to carry out the repayment of the credit card debt.

Finally, even after the divorce, debts accumulated on the credit card will also become the liability of both partners.

Can you unjoin a joint credit card debt?

There are cases in which one of the joint credit cardholders can make a request to the credit card company to remove their name.

Each credit card company differs in priorities and decision-making processes.

Therefore, the request could be met with a variety of responses.

There are essential points to consider when you want to unjoin a joint debt:

  • The decision is at the discretion of the credit card company.
  • In the case of small and manageable joint credit card debts, the credit card company is more likely to approve the request and remove one of the cardholders from the agreement. In this case, the removed cardholder is not liable for the debt anymore.
  • Credit card companies are open to reconsiderations if there is evidence that only one of the cardholders has charged items and created the debt. However, it isn’t always the case.

How to best cancel joint credit cards

While you can’t cancel a joint credit card debt, you can and should cancel a credit card account upon separation.

The credit card company can agree to transfer the debt under two newly opened credit cards in single names.

The debt is to be repaid as a joint effort, or as agreed in the separation negotiations.

However, it is essential to remember that, unless the credit card company accepts to remove one of the ex-spouses from the joint debt, the liability will remain shared between the two former cardholders.

As such, if one ex-spouse can’t make the payment, the credit card company will pursue the other spouse.

Understandably, personal bankruptcy and personal debts can make it more challenging to manage a joint credit card debt.

A Licensed Insolvency trustee can provide the necessary guidance to find a debt relief solution.

They can find a solution that works for both ex-spouses and avoids financial complications.

Sorting out joint credit card debt when you are juggling with financial issues is a tricky matter.

Get in touch with a trustee for a free debt consultation on the matter.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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