Part of why a divorce is so difficult is because you are relying upon your spouse (and eventually your ex-spouse) to both cooperate with you and also abide by the terms of your divorce decree. Trusting that your opposing party will live up to their word when it comes to important financial and familial matters is probably not something that you are excited about engaging in. A lack of trust may be the reason why you are getting a divorce in the first place.
You do have a safety net in the form of the Final Decree of Divorce that can offer you some degree of protection if your spouse does not live up to their end of the bargain. However, in order to enforce the orders contained in that decree you would need to file an Enforcement lawsuit, serve your spouse with notice of the lawsuit and then present your case to a judge in a hearing. If the judge agrees with you that a violation of the order has occurred then a judgment can be issued in your favor and against your ex-spouse.
However, after all of that it is still no sure thing that your ex-spouse will do what he has been ordered to do. The bottom line is that it is not that simple to follow up and enforce the terms of a final decree of divorce. The circumstances of your case and the willingness of both spouses to participate and follow through with their responsibilities as set forth in the divorce decree have as much to do with how effective your orders are as the document itself.
Credit cards and divorce
If you or your ex-spouse are assigned credit card debts in your final decree of divorce that does not mean that the creditor will be impacted in any way. The truth is that credit card debt is associated with an agreement made between you, your spouse and a creditor. You all are contracting for the credit card company to lend you money to make purchases and then you and your spouse will pay that money back to the company (often times with interest attached).
Nowhere in that contract will it say that its terms can be changed in the event that a Texas divorce decree declares the burden of paying the balance on a credit card has been shifted from one spouse to the other. A creditor can come back and hold you responsible for paying a credit card bill even if your spouse was burdened with that debt in the divorce. Your credit score and ability to borrow in the future can be impacted significantly if your spouse fails to the debt as ordered in the divorce.
One thing that I would tell you is that you are better off being awarded a credit card debt that is in your name- no matter if the purchases on the card were to your benefit or were made by you. The reason for this is that you can trust yourself to make payments more than your spouse. If there is a significant amount of credit card debt then you should be able to take on an equally significant amount of community property in exchange for doing so. Your spouse may walk away from the divorce without any debt responsibility but in exchange for that luxury may have to give up some property that would otherwise go to him.
Another situation that could work out in everyone’s favor is to divide debts equally and then assign community property to you and your spouse that would allow for the quick and easy payment of the debts assigned. Nobody wants to have a mountain of debt in their lives and the assignment of an equal amount of property to correspond to the debt award would make it so the debts could be paid without much problem. While this may not be possible, it should be considered in situations where your family’s net worth is positive and you have property that can offset debts (and then some).
The other thing that you and your spouse need to keep in mind as you work through your divorce is that it is impossible to dig yourselves out a hole when you don’t ever stop digging. Meaning- there needs to be some sort of provision contained in your final decree of divorce that bars either spouse from using that credit card in the future. It is easy as pie to apply for and open up separate credit card accounts. I don’t see the benefit (even when considering credit card rewards programs) to maintain a credit card account that existed prior to the divorce.
Your Mediated Settlement Agreement (MSA) and final decree of divorce should specify how you all want to handle these credit card accounts. You can close the account and cut up the card, refinance a card debt into one of your name’s individually or whatever scenario you all would like to employ. Do not put yourselves in a position where it is possible to keep using that card to incur added debt. That would defeat the purpose of negotiating the division of that debt in your divorce.
Be specific when spelling out how a debt is to be paid after the divorce
This is part of the process that I cannot emphasize enough how critical it is to your post-divorce life. Having a family court order that is not specific is a problem. You see, you as we already discussed today an order would need to be enforced in order to have any importance in your life. If a court order cannot be enforced and cannot earn a judgment in your favor and against your ex-spouse, the court order is not worth the paper that it is printed on.
From a practical standpoint a court order needs to be specific in regard to the responsibilities it lays out for you and your spouse. You all cannot be expected to follow a court order that does not lay out what your responsibilities are. In terms of the financial aspects of divorce, that means telling you and your spouse what you need to pay, where you need to pay it, when it needs to be paid by and the means by which payment can be made.
In many divorce cases, a party will assume that just because the case has been settled means that the case is now over. That is not true. What happens after the settlement portion of your case is almost as important as the settlement itself. It’s at this point that the settlement terms can be written down within a court order that will be the document you and your spouse actually operate off of now and in the future. You need to make sure that the terms contained in that order are concrete, clear and leaves little up to interpretation.
Regarding credit cards, if your spouse is going to pay a debt after the marriage has ended then your attorney needs to make sure that it is clearly defined in the final decree of divorce who is going to pay what. The amount of money that is due, the date by which payment(s) need to be made each month and where the payment will be sent is a good start. Even though you and your spouse may both know all of these details it is not enough to simply go off of an assumption. Clearly spell out the terms in your order so that miscommunication opportunities are limited.
Remember that if you and your spouse have disagreements over particular terms in your order, it is not that simple to get clarification from a legal authority on the actual meaning. I have seen it happen many times that one spouse will interpret the order one way and the other spouse will interpret it a completely different way. This situation begs for violations to occur and will necessitate a court appearance to have it all sorted out. If you can avoid having to go back to court on something like this, I would strongly suggest you do so.
Ultimately, what does all this mean to you?
I will be the first to admit that many of the issues in this blog post are not ones that will immediately come to mind for folks going through divorces. You are likely more concerned about the well-being of your kids than you are about how a credit card bill is divided in the divorce. That is completely understandable. In fact, if you were more concerned about your credit card bill than you were with your children then I would probably start to worry about you.
However, financial issues (even financial issues that are frequently glossed over) can have important impacts on your case and on your post-divorce life as a whole. Since so much of a divorce is spent responding to things done by your spouse, protecting your interests and negotiating on other subjects, I figure that the subject matter that we covered today would at the very least be enlightening to read if you have never really given it all that much thought previously.
Credit cards a part of the lives of most Americans. Even if you don’t carry a month to month balance on the card it is likely that you still have a credit card that you use for purchases. If during your marriage you shared the use of that card with your spouse then it can become an important part of your divorce, as well. Figuring out a way to divide up the credit card debt is one thing. Figuring out how to get the bill paid after the divorce is another subject altogether.
Work with your attorney early on to discuss your concerns when it comes to financial issues. If you know that a credit card is going to be an issue in your case then you need to disclose that to your attorney as early as possible. This will give your attorney the most amount of time possible to sort through possible solutions to the problem. As you can tell from reading today’s blog post, there are many potential problems that can arise when it comes to figuring out how to allocate credit card debt and the responsibility for making payments in a divorce.
If you can pay down credit card debt before your divorce that is a possible solution that you may want to explore if you can afford to make those sort of payments. Even if it your spouse’s charges that you are paying for it could make more sense for you to attempt to collect from your spouse the payments that you made, rather than expecting your spouse to make on time payments after the divorce. There are options for you to explore and it is up to you to share your potential problems with your attorney to figure out what those solutions may be.
Questions about divorce in Texas? Contact the Law Office of Bryan Fagan
If you have any questions about the material that we wrote about today, please do not hesitate to contact the Law Office of Bryan Fagan. Our office offers free of charge consultations six days a week with one of our licensed family law attorneys. These consultations are a great opportunity to ask questions and receive direct feedback about your case from an attorney who has represented clients in family law cases across southeast Texas.
We take pride in being able to represent our neighbors in family law cases in the courthouses of southeast Texas. We strive to achieve the best possible result for each of our clients. To do so, we take the time to learn not only the facts and circumstances of your case but to work with you as an individual to solve the problems that affect your life and that of your family. Thank you for spending part of your day with us today and we hope you will join us again tomorrow.