Divorcing spouses in Massachusetts need to think about credit card debt

Most married couples have at least one joint credit card. And a great many couples don’t pay off their cards in full each month, so they have some credit card debt.

If you or someone you know is considering divorce, it’s important to think about what will happen with a joint credit card.

Although there are exceptions, in many cases the wisest move is to pay off the joint card if possible, cancel it, and open up your own personal credit card account.

Here’s why: In most states, if both spouses’ names are on the account, each spouse is fully legally liable for the entire amount of the debt. So canceling the joint card prevents your spouse from running up a lot of debt – either out of spite or for whatever other reason – for which you’ll then be legally on the hook.

Since the credit card company isn’t part of the divorce proceeding, it isn’t bound by what the divorce judge says.

Of course, joint credit card debt, like all other assets and obligations, will likely be divvied up by the divorce judge. And it’s possible that if a spouse wasted money or used a credit card for inappropriate purchases, a judge will decide that the spouse should be solely responsible for that portion of the debt. (An example might be if a spouse had an affair and charged flowers, dinners and hotel rooms to a joint credit card.)

But you can’t always be sure what will happen, and in any event, no matter what a judge says about how to divide up the debt, that’s only binding as between you and your spouse – not as to the credit card company.

Typically, when you sign up for a joint credit card, you both sign a contract saying you’ll be individually responsible for all charges. And since the credit card company isn’t part of the divorce proceeding, it isn’t bound by what the divorce judge says.

So even if a divorce judge orders your spouse to pay the entire credit card debt, if the spouse refuses to pay – or doesn’t have enough money to pay – the credit card company can still come after you for the balance.

This is also true if a spouse files bankruptcy and has the debt legally discharged.

Therefore, canceling a joint card as soon as you can is a good way to prevent further charges from accruing for which you’ll be responsible. It can also protect your own credit score in the event a spouse fails to pay.

If a spouse is cooperative, you might be able to agree to pay off the card balance and cancel it. If you don’t have enough cash on hand to pay off the card, it might be possible to tap a home equity line of credit. Another option is to each open a separate credit card account, and transfer the debt on the joint card to the new separate accounts.

It’s also a good idea to document things and keep careful records. A good first step is to contact each credit card company and determine exactly how much is owed on each card.

You’ll also want to check whether an account is really a joint account, or if one spouse owns the account and the other spouse is merely an “authorized user.” In most states, an authorized user can charge things to the card, but isn’t legally on the hook for payment. If you’re the owner and your spouse is an authorized user, you might want to call the credit card company and remove your spouse from the account. (Keep in mind that in some states, a spouse could still be liable for debt on a credit card even if he or she is merely an authorized user.)

If you still have a joint card at the time you separate, you’ll want to carefully document your own expenses so you don’t end up being charged for expenses incurred by your spouse.

But the most important thing is to talk with a divorce lawyer right away. While there are general rules, each situation is unique, and a lawyer can counsel you on how best to handle your particular situation in order to protect yourself.