You may have promised to take your spouse for better or for worse when you got married, but does that mean you’re responsible for their credit card debt? The answer to this question is not ordained in heaven, but depends on the most mundane questions in which you reside and contractual obligations.
Most US states fall into the category of common law property states. In these 41 states, property acquired by one of the spouses belongs solely to them.
On the other hand, in the nine states that go with what is called Community law (which include Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico and Wisconsin) property acquired during a marriage belongs to both spouses.
Liability for Credit Card Debt in Common Law States
Common law patrimonial states consider property acquired by one of the spouses as belonging to them alone. However, if you are both named owners, the property will belong to both of you. If your spouse has a credit card that is only in their name, you are not responsible for their debt. However, creditors have recourse to your spouse’s share of the property you own jointly with them.
And if you have a joint account on a credit card, you will both be responsible. You would also be responsible if you co-sign the account for them. However, if you are only an authorized user of your spouse’s credit card, you will not be liable for their debt.
The liability of the spouse in the States governed by Community law
In so-called communal property states, property acquired by any marriage partner is considered joint property.
If a debt is incurred during the marriage, it could be considered a community debt for the benefit of the marriage for which you would also be responsible. However, if you are separated from your spouse and the latter accumulates debts, you will not necessarily be held responsible for these debts. Every situation is different, however, and if the state decides that this debt was incurred for the benefit of the marriage, you could still be held liable along with your spouse.
Additionally, you would be liable for credit card debts if you are a co-holder or co-signer of the account.
Divorce or death of a spouse
If you divorce, a court may award you a debt for which you were not originally responsible, according to the contractual terms of a credit card agreement. For example, you are not a joint account holder and are not liable under the card agreement.
Even then, you would be liable, in accordance with the court’s mandate, to repay the debt awarded to you. If you don’t repay that debt, while the card issuer can’t hold you responsible, your spouse could still sue you for ignoring the court order.
If your ex-spouse also declares bankruptcy, the bankruptcy court could discharge part of his debt. If this is a joint account, you will still be responsible for the outstanding debt.
And in the event of your spouse’s death, you’ll generally only be liable for their credit card debt if you’re a co-owner or co-signer of the account. However, the estate executor could draw on assets you owned with your spouse to pay off any debts owed, depending on your state’s law.
Stay on top of your credit reports
The law states that debt collectors generally cannot contact you about debts of a deceased spouse unless you are a co-signer or joint account holder, or otherwise responsible for the debt. Debt from a deceased spouse should also not affect your creditworthiness unless you were responsible for it.
In case you are concerned about your responsibility for a spouse’s credit card debt, it’s also a good idea to keep track of your credit reports. This would give you an idea of your creditworthiness and keep you informed of joint accounts.
The bottom line
You are generally not responsible for your spouse’s credit card debt unless you are a co-signer of the card or it is a joint account. However, state laws vary, and the divorce or death of your spouse could also affect your liability for this debt.
Contact me at [email protected] with your credit card questions.