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Is Credit Card Debt Marital?

By Amy A. Edwards

In short, credit card debts can be marital, just as any other type of debt. In contrast with marital property, the law doesn’t assume a debt is marital just because it was incurred during the marriage. If a debt is marital, each party is equally responsible for it, although the court usually assigns it to one party to equalize the net part of property each party gets. If a debt is separate, it isn’t calculated into the marital estate, and the person who has the account in his or her name is responsible for it. To understand credit card debt, we must first look at what a marital debt is.

The Timing of Marital Debt

A marital debt must generally be incurred by one or both spouses while they are married and before the date of separation (DOS). One exception to that rule is when one spouse takes a loan after DOS to pay off the “old” marital debt that existed on DOS. [1] Like marital property, marital debt must exist at DOS. If you just paid off your credit card with your bonus from work, and then you separate, the debt doesn’t exist at DOS and it is not a marital debt for which you would get credit for paying.

What’s in a Name?

Marital debt can be in the names of one spouse or both. However, there is one important distinction between debt and marital debt. The court can say who is responsible but only as between two spouses. But the court can’t tell a third party, such as Mastercard or Visa, that they can only enforce the debt against one person when two people signed the agreement to repay them.

The court may indemnify a spouse, meaning that if the husband is assigned to pay the credit card debt and he fails to do so, he has to repay the wife if the credit card company sues her for payment. But if the other spouse had the money to repay you, he or she would’ve probably paid the debt in the first place. In practice, indemnification only goes so far.

Joint Benefit: The Key Issue

Unlike marital property, to call a debt marital, it must be incurred for the joint benefit of the parties. [2] There is no presumption that the debt was incurred for the benefit of both parties. If you want to prove the credit card debt is marital, you have the burden of proof to show that the charges were made before DOS and that the charges were incurred for the joint benefit of the parties. Courts have vast discretion in ruling on whether charges benefited both parties. Charges for groceries and gas probably are, but charges for one spouse’s dental treatment [3] or student loan debt probably aren’t. [4]

Most people make on-going charges, including charges made after DOS. Another difficulty can be non-descriptive statements. It is difficult to prove what you purchased from Wal-Mart for $175.43 from six or seven months ago, and then prove it was a joint benefit. Another serious difficulty is proving what the outstanding credit card balance on DOS (none can be after DOS) was used to purchase. If the balance at DOS resulted from purchases made over the last three years, you still have to prove which ones were marital, incurred for the joint benefit of the parties.

Amy A. Edwards is a family law attorney at Amy Edwards Family Law in Greenville, NC, certified by the NC State Bar Board of Legal Specialization as a Family Law Specialist, and is licensed only in NC. Laws change. This article is current as of 2018.  www.AmyEdwardsFamilyLaw.com © 2018.

[1] Huguelet v. Huguelet, 113 NC App. 533 (1994).
[2] Wornom v. Wornom, 126 NC App. 461 (1997).
[3] Becker v. Becker, 127 NC App. 409 (1997).
[4] Baldwin v. Baldwin, 232 NC App. 521 (2014), distinguished by Warren v. Warren, 241 NC App. 634 (2015).

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