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Q: We have run up a fair amount of credit card debt. But my spouse ran it up. So will my spouse have to pay it down? A: Not necessarily. In most cases, both spouses are legally responsible for any debt that is incurred during the marriage. And that responsibility continues even after a divorce. Q: My husband agreed to pay off our credit card debt by himself? Can I rest easy, now? A: Not until the debt is actually paid. The reason for this is that your husband's agreement is only between the two of you. But as far as the credit card company is concerned, the card was in both your names, and both of you are still responsible. (The law backs the credit card companies up on this.) Q: That makes me nervous. Is there anything I can do? A: If at all possible, try to pay off as many of the debts with your name on them as possible before the divorce. Also, try to terminate existing credit cards and get new ones issued in your name alone. (For women who have not worked, this may be easier said than done.) If there are any debts that had only your name on them, try to get those paid off first. Q: What about gambling debts, or money my spouse spent on an affair? A: Those are special cases. In most states, the judge will assign all those debts to your spouse, instead of dividing them between you. But, again, if your spouse does not pay them off, you may still be legally liable to the credit card company (or other lender). Q: My spouse underpaid our taxes, and now the IRS is coming after me. Is there anything I can do? A: Assuming you filed a joint return, in general, you are both liable for back taxes. There is, however, an exception, called the "innocent spouse rule." There are two approaches you can use to limit your liability, if you are an "innocent spouse."
These rules apply even in community property states. The rules may be complicated in your situation. In any event, you should have a tax lawyer or accountant working with you on this. | |||||||||||||||||||||||||
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