When couples divorce, dividing assets is only part of the equation. Debt, especially credit card debt, must also be addressed. In North Carolina, divorce law treats debts just like assets: they must be identified, valued, and divided fairly.
If you are worried about who will be responsible for credit cards or loans after divorce, here’s what you need to know about how North Carolina courts handle debt in divorce cases.
Contact an expert lawyer today.
Equitable Distribution in North Carolina
North Carolina follows equitable distribution, which means property and debts are divided in a way that is fair, though not always equal. (N.C. Gen. Stat. § 50-20)
Three Categories of Debt
- Marital debt: Debt acquired during the marriage for the benefit of the marriage (e.g., joint credit cards, loans for family expenses).
- Separate debt: Debt one spouse incurred before the marriage or after separation, or debt that only benefited one spouse.
- Divisible debt: Debt taken on between separation and divorce that still benefits the marriage (for example, mortgage payments on the marital home).
Only marital and divisible debts are divided in divorce. Separate debts stay with the spouse who incurred them.
How Credit Card Debt Is Handled
Credit cards are a common source of conflict in divorce. Courts look at:
- Whose name is on the account: Joint accounts are generally split, while individual cards may depend on whether charges benefited the marriage.
- Purpose of the charges: If purchases were for family needs, the debt is usually marital. If for personal use (e.g., gifts for an affair partner), the debt may be assigned to the spouse who incurred it.
- Ability to pay: Courts consider each spouse’s financial situation when dividing debt.
How Courts Divide Debt in Divorce
Courts use the same process for debt as they do for assets:
- Classify the debt (marital, separate, or divisible).
- Value the debt (determine the outstanding balance).
- Distribute the debt equitably between spouses.
The court may assign the debt entirely to one spouse or divide it between both, depending on the circumstances.
Contact a local Attorney in North Carolina.
Protecting Yourself From Credit Card Liability
Even if a court order assigns debt to your spouse, creditors are not bound by divorce decrees. That means if your name is on a joint credit card, the credit card company can still pursue you for payment if your spouse doesn’t pay.
Steps to Protect Yourself
- Close joint accounts as soon as possible after separation.
- Remove authorized users from individual cards.
- Refinance or transfer balances so each spouse is responsible only for their own accounts.
- Monitor your credit report to ensure no new charges or missed payments affect your score.
Debt Division and Other Divorce Issues
Debt division often goes hand in hand with other divorce issues, such as:
- Property division – Assets may be used to offset debts.
- Alimony – Courts consider debts when deciding a spouse’s ability to pay or need for support.
- Child support – Outstanding debts may affect income calculations.
Why Legal Guidance Matters
Dividing debts can be just as important as dividing assets. Without careful planning, you could be left paying for debts you didn’t create or facing credit damage from a spouse’s missed payments.
An experienced family law attorney can:
- Ensure debts are classified correctly.
- Negotiate fair settlements that protect your credit.
- Work with financial experts if necessary.
- Advocate for you in court if no agreement can be reached.
Key Takeaways
- Debts are divided equitably, not always equally, in North Carolina divorces.
- Credit card debt may be marital or separate, depending on who incurred it and for what purpose.
- Joint account holders remain liable to creditors, even if a court assigns debt to your spouse.
- Protect yourself by closing accounts, refinancing, and monitoring your credit.
- Legal guidance is essential to ensure debt division is fair and protects your future.
If you are going through divorce in North Carolina and need help with debt and credit card issues, Martine Law can protect your financial interests. Our family law attorneys understand both the legal and practical side of dividing debt.
Contact us today for a confidential consultation.