Sometimes, credit cards are part of the overall reason that a couple decides to divorce. When spouses have very different attitudes about debt and financial responsibility, they may reach a point where they can no longer continue sharing resources with one another.
Credit cards can also pose a logistical challenge in a divorce, as couples may have to close their accounts. You may struggle to cover certain expenses in the early days of your divorce if you don’t already have resources set aside or separate lines of credit in only your own name.
The credit cards that you share will also likely be a challenge as you attempt to negotiate an asset and debt division agreement with your spouse. Here are a few of the primary credit card considerations that may affect your property settlement negotiations.
How much credit card debt is “marital”
Some couples have arrangements to treat certain financial accounts as separate. Provided that you have a written agreement to that effect, establishing certain accounts as separate property may not be that much of a challenge.
However, especially if someone has used a marital credit card for inappropriate purposes, such as wasteful spending to punish their spouse or paying for hotel rooms while conducting an affair, excluding certain amounts added to the balance during the marriage from the overall debt load assumed by your marital estate may be the most appropriate approach.
How much debt each spouse will pay
Once you determine what credit card debt may be treated as separate property and which debts are marital property, you then have to divide responsibility for those marital debts.
Some couples agree to have the higher earner take on the debt and also keep more of the marital property. Other couples may try to divide the accounts evenly or sell certain marital property to pay off the debts in full early in the divorce process. Any of these approaches can work for couples who have shared credit card debt.
What happens with rewards
There are many kinds of credit cards that offer perks or rewards. From travel cards that give people free plane tickets to cash-back cards that can compensate people based on how much they spend in different categories, credit card rewards accrued by married couples could be worth thousands of dollars. You will have to determine the value of those rewards and then include them in the pool of your assets when you work through your property division matters.
Dividing your debts can be as much of a challenge as dividing your assets as you prepare for a Florida divorce. Identifying the debt division challenges that could affect your negotiations can help you prepare the right strategy given your circumstances.