In our world today, debt has more or less become a way of life for many families. When we consider how people dealt with and approached debt a few generations ago, we will find that attitudes on this subject have changed dramatically.
Our great-grandparent’s generation feared that losing a job would cause a family to fall behind on their mortgage their homes to be taken away by the lender (usually a bank). There were no credit cards, and purchasing items on credit was not widely utilized.
Fast forward to our parent’s generation, and credit cards came into being and along with it the ready acceptance of plastic instead of paper at even the most mundane of businesses.
How many of us whip out a credit card at the grocery store to pay for a gallon of milk? I couldn’t tell you the last time I used gas to pay for a fast-food hamburger or cup of coffee. The fact is debt is everywhere- both big and small.
What happens when those debts are essentially ignored for an extended period by a family? The debts grow due to the effect of interest on the principal amounts. This can creep along almost unnoticed for an extended period until something comes about to bring these debts into focus. From my experience, little else causes a family to notice the issues in their lives more acutely than a divorce.
Credit and Divorce: Typically a not so great combination
Everyone wants to have a high credit score. From my experience representing southeast Texans like yourself in divorce, I’ve heard many more people talk about the desire to maintain a strong credit score instead of earning wealth for themselves and their families.
Because wealth is harder to attain, people may settle for the high cr. In so doing, you are admitting that debt will always be a part of your life and that making regular payments to a financial institution is a part of your life’s plan.
If you can enjoy your life in the meantime, that is all for the better. However, this sort of lifestyle can “come home to roost” when you and your spouse begin to go through a divorce.
Who has to pay it after a divorce is finalized if there is credit card debt?
When you and your spouse open up a credit card account together, you are both signing off on the debt that each other incurs on that card. Each of you is jointly and severally liable for the debt, and the credit card company will view it as such.
On the other hand, if you open up a credit card account in your name only and allow your spouse to use the card, they become merely an authorized user. If your spouse has an existing account when you become married, it is easy enough to add your name as an authorized user at that time.
The obvious problem with this sort of setup is that you would have no “skin in the game,” so to speak. Meaning that you can theoretically charge whatever you would like to on the card and hold no personal or legal responsibility for the debts incurred. Only your spouse as the account holder would have that sort of responsibility. Your actions might put your spouse in the wrong spot during the marriage and cause an issue to rear its ugly head if a divorce were filed.
The effect on a credit card authorized user- does use a credit card build credit?
As the hypothetical authorized user in our prior scenario, you have your risks to ponder as well. While you may not have any responsibility to pay the debt, either during your marriage or after a divorce, you are not creating a positive credit history for yourself.
While we have previously discussed the merits of even wanting to build a positive credit history unless you have sworn off using debt to live your life, having a positive credit score will be crucial to applying for loans like mortgages in the future.
Staying in a bad marriage for the sake of your credit
Both spouses, as you can see, could be persuaded into remaining in a bad union for the sake of maintaining some degree of financial well-being. If you are the account holder, you may not want to venture off into single life and take a crushing amount of credit card debt with you.
On the other hand, if you are an authorized user of a credit card, you too may not want to risk going off on your own without much credit history or cold hard cash to help you make your way as a newly single man or woman.
Unfortunately, this motivates people to stay in abusive, toxic, or just unhealthy relationships. Unless your family seeks counseling on these issues and begins to live on a monthly budget, there will likely be no end in sight to either the debt lifestyle or the bad marital relationship.
How to handle credit card debt in conjunction with a divorce- tomorrow’s blog topic
We hope that the introduction to this topic has been exciting and attention-grabbing for you. Please return to our website tomorrow to learn more about how credit card debt can be successfully handled in the context of a divorce.
If you have questions for one of our licensed family law attorneys, please do not hesitate to contact the Law Office of Bryan Fagan, PLLC, today. A free-of-charge consultation can be yours six days a week where one of our attorneys can answer your questions in a comfortable and pressure-free environment.
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Other Articles you may be interested in regarding
- How are Credit Cards Handled in a Texas Divorce?
- How credit cards and debts are handled in a Texas Divorce
- Handling the issue of credit card debt during your divorce
- What Happens to Marital Debt During a Texas Divorce?
- Know How Property and Debts are Divided When Preparing for Your Texas Divorce
- What Happens to Marital Debt During a Texas Divorce?
- Dividing Property in a Texas Divorce – The Just and Right Division
- Why is Separate Property Important and How to Keep it Separate in a Texas Divorce?
- What Wikipedia Can’t Tell you About Texas Divorce and Marital Property Division
- Texas Divorce Property Division Enforcement
- Separate Property in a Texas Divorce?
- Does it Matter Whose Name is on Title or Deed of Property in a Divorce in Texas?
- What are some signs that your spouse may be defrauding you?