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What happens to credit card debt in a New Jersey divorce?

On Behalf of | Jan 2, 2023 | Property Division

The division of debt during a divorce often becomes one of the most acrimonious disagreements couples face. Divorcing spouses may particularly fear being forced to pay credit card debt accrued by the other spouse. The law in New Jersey may hold you responsible for credit card debt depending upon the reasons for the debt.

Equitable distribution

New Jersey divorce law operates under the equitable distribution principle. Under these principles, the courts divide both assets and debts according to what the court deems to be fair.

Marital debt

Typically, marital debt includes any debt that occurs during your marriage that benefits your marriage. These debts include credit card debts, and all marital debts must be divided according to the state’s mandate of equitable distribution.

Credit card debt that courts may consider marital debt includes:

• Debt from jointly-owned credit cards

• Debt from cards you co-signed for even if you do jointly own the card

• Debt from cards in either spouse’s name as long as the debts benefitted or contributed to the marriage

Non-marital debt

Courts typically refer to non-marital debts as debts that happened “outside the marriage.” It may also include debts that did not benefit or contribute to your marriage. If a courts label a credit card debt a non-marital debt, it will become the sole responsibility of the spouse who acquired the debt.

Examples of non-marital credit card debt involve the following:

• Card balance existed before the marriage

• Credit card use after the divorce filing

• A spouse used the card to finance an affair

• The card was used for illegal purposes by one spouse

Fair New Jersey divorce terms

Since New Jersey operates under equitable distribution, you do not need to worry about being forced to pay debts that did not benefit you. Although debt distribution laws may seem complex, they ultimately protect both spouses.