Florida is an equitable distribution state meaning that assets and liabilities (debts) are not necessarily divided 50/50 during the divorce process. While there is a presumption that the courts should divide the marital estate 50/50, the court can (for legal reasons) award more the marital estate to one party than the other. Naturally, the issue of debt arises from here. What happens to credit card debt during a divorce? Well, the credit card debt is divided (usually equally) among the two parties. However, there are certain cases where one party will be assigned more of the credit card debt than the other. In this article, the Tampa, FL divorce lawyers at Westchase Law, P.A. will discuss credit card debt during divorce.
Understanding credit card debt and the marital estate
The marital estate is composed of all assets and liabilities that accrued during the marriage. This includes credit card debt. Credit card debt that was acquired during the marriage is considered property of the marital estate. This debt will be split and apportioned to both parties during the divorce process. Again, the credit card debt may not necessarily be split in half. One party may be assigned more of the credit card debt than the other.
Equitable distribution of credit card debt
As stated prior, Florida is an equitable distribution state. That means the court will not necessarily split the credit card debt in half. Instead, the court will consider the economic circumstances of each party when dividing the credit card debt and come to a resolution that is fair to both parties. Factors influencing equitable distribution include the length of the marriage, each spouse’s financial circumstances, and each spouse’s contribution to the marriage. The division of credit card debt will differ based on the specific circumstances of the case.
Options for managing credit card debt in divorce
There are a few ways to deal with credit card debt during a divorce. These include:
- Negotiated settlement – Spouses can negotiate a settlement agreement that determines how credit card debt will be divided. This could involve one spouse assuming responsibility for specific debts while the other spouse assumes responsibility for other debts. For example, one spouse may assume liability on a debt for a car they primarily use.
- Court decision – In cases where the spouses cannot reach an agreement together, the court will intervene on their behalf and assign the debt to their estates. The court will consider factors such as each party’s ability to pay the credit card debt, the nature and amount of the credit card debt, and any other relevant circumstances related to acquisition of the debt.
- Debt repayment plan – The spouses can agree to continue making payments on any joint credit card accounts that they have until the debt is fully repaid. In some cases, this will be the best solution if both spouses are financially able to contribute to paying the debt.
Talk to a Tampa, FL Family Law Attorney Today
Westchase Law, P.A. represents the interests of Tampa residents who are going through a divorce. Call our Tampa, Florida divorce attorneys today to schedule an appointment, and we can begin addressing your concerns right away.