How is Credit Card Debt Divided in a Divorce?

Divorce is rarely simple. Beyond the emotional weight of the decision, separating spouses must also sort out the financial details that were once shared. Credit card debt is one of the most common concerns, and it often becomes a source of tension during divorce proceedings. Continue reading and reach out to the seasoned Sussex County divorce lawyers here at Gruber, Colabella, Thompson, Hiben & Montella to learn more about how credit card debt is divided in divorce. Here are some of the questions you may have:

What Role Does Marital vs. Separate Debt Play?

The first question the court considers is whether the credit card debt is marital or separate. Marital debt typically includes balances that were accrued during the marriage, regardless of which spouse’s name is on the account. For example, if one spouse opened a credit card to pay for groceries, vacations, or household expenses while married, those charges are likely considered marital.

Separate debt, on the other hand, refers to balances one spouse brought into the marriage or accumulated after the date of separation. Determining this distinction is critical because marital debt is subject to division, while separate debt usually stays with the individual who incurred it.

How Does New Jersey’s Equitable Distribution Rule Apply?

New Jersey follows a principle known as equitable distribution. Unlike states that split assets and debts 50/50, New Jersey courts aim for a division that is fair, though not always equal. Judges take into account multiple factors, including the length of the marriage, the income and earning capacity of each spouse, and the contributions made to the household. This means that credit card debt might be divided in a way that feels unbalanced, but still aligns with the broader goal of fairness.

For instance, if one spouse consistently relied on credit cards for personal purchases unrelated to family needs, the court may assign that portion of the debt solely to them.

Can Spouses Negotiate Credit Card Debt Outside of Court?

While courts will decide when necessary, many couples find it beneficial to resolve debt issues through negotiation or mediation. By reaching an agreement together, spouses can avoid leaving the decision entirely in a judge’s hands.

Sometimes, one spouse may agree to take on more of the debt in exchange for keeping a larger share of assets, such as a vehicle or retirement account.

In other cases, both spouses may agree to split debt proportionally based on income. Mediation not only reduces the stress of litigation, but it can also save time and money. Still, it is wise to have an attorney review any agreement to ensure it complies with state law and protects both parties from future disputes.

If you have additional questions or would like to speak with an attorney about your case, please don’t hesitate to contact Gruber, Colabella, Thompson, Hiben & Montella today.