We’ll Just Share the Payments on This Credit Card . . .

Divorcing couples often intend to share equally (or in some other ratio) the payment of each month’s required payment on their credit card or cards. I get it. I understand that it seems to make sense. It’s almost never a good idea.

The calculation of interest owed from month to month on today’s credit card accounts is notoriously complicated. To be painfully frank, I’m a lawyer married to a PhD, and neither of us can figure it out for our own credit card account. So that means if one of you misses a payment, it’s almost impossible ever to calculate the impact of the missed payment on the balance. And that will usually cause one of you to resent the other.

That’s exactly what happened with Charlie and Rosa. Rosa had incurred about $8,000 of credit card debt while Charlie was out of work, and then they took out another $2,000 to hire a lawyer to help Charlie’s brother with his DUI arrest. So at the time of their divorce, Rosa owed $9,500 on her credit card. Not knowing any other options, she and Charlie agreed that each would pay half of the required minimum payment each month until the balance was paid off.

You already know what happened, don’t you? Rosa paid her half each month like clockwork. Charlie paid sometimes, missed sometimes, and paid late sometimes. By the time Rosa and I were talking, she was practically seething with rage at Charlie, and she had no idea how much his many lapses had cost her.

So what do you do? If at all possible, arrange your accounts so one exspouse has sole responsibility for each account. If the division is inequitable, often you can compensate for it by the way you divide assets. Or you could have one of you take a cash advance from the account you’ll be paying and use it to reduce the balance on an account the other will be paying.

And always remember that the way two spouses allocate their debt in a divorce doesn’t change anything about their liability to the lender. That’s why it’s always best if you can arrange your divorce to get debt into the hands of the person who has the legal liability to pay it.

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