During a marriage, many people share the use of their credit cards.
This can lead to confusion over who is accountable for missed payments once the marriage ends.
Particularly, if your ex-partner already agreed to pay off the debt already accumulated.
So, who is responsible?
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
Are You Responsible For Debt After Divorce?
It’s extremely important that you are aware that the responsibility to pay credit card debts cannot be assigned during divorce proceedings.
As far as the creditor is concerned, you are both responsible for the debt that is owed.
It doesn’t matter what you have agreed with your spouse or ex-spouse, creditors cannot be bound to this.
If your ex-spouse continues to charge purchases to any pre-divorce accounts, then you are both going to be held responsible for it.
What this means is that if your ex-spouse decides not to keep up with the payments, the creditor will come to you to collect what is owed.
Even if you have a signed document between you and your ex that acknowledges that they are going to pay all the debt, as this does not involve the creditor, it isn’t relevant.
You are responsible for any debt on a joint card or account, and if you don’t make the payments, this is going to negatively impact your credit score no matter who incurred the debt.
What Can You Do When Divorce Causes Problems?
If your ex-spouse isn’t making the payments, then you are going to need a plan to get rid of the debt.
By not doing this, you are jeopardizing your own credit score, so you should talk to the creditor and make arrangements for payment.
The creditor is likely to agree to a payment plan of what you can afford, as long as you keep making the specified payments that you have set up.
Debt In Your Name After A Divorce
You may already have debt in your name before your debt is finalized.
You should always talk to your bank before signing the separation agreement.
In doing so, you can get two completely separate loans to pay off the joint debt you have accumulated.
Be aware if there is an existing balance, then the bank is unlikely to remove your name from the account.
However, as long as you have good credit, you should both be able to borrow a loan to pay off the balance.
After this and the old account has been paid off, you should close it.
Make sure that you get a written agreement from the bank about who is responsible if there are any adjustments.
If you are struggling to understand where your responsibilities begin and end in terms of joint debt with an ex-partner, contact us today.
A friendly member of our debt relief team can help you find the right path.
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?
How to File for Bankruptcy
What is Bankruptcy?
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?