Information on credit cards and community property law

Can credit card companies levy my spouse's bank account? The credit cards are solely in my name.

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Bill's Answer: Answered by Mark Cappel

Thank you for your question about your debt and whether or not your spouse can be subject to collection efforts to collect on your debt.

The Cardholder is Usually Solely Responsible for the Debt

A credit card issuer must file a lawsuit and obtain a judgment against a debtor before taking legal action to force payment of a debt, such as bank levies, wage garnishments, or property liens. If you are the only person listed on the credit card account, then in most cases, the creditor can sue you alone, and if as a result of the lawsuit receives a judgment, the judgment-creditor has the right to levy your bank account and so on.

Consider a few important exceptions to this rule when you determine the risk of not paying this debt. First, if you live in a community property state, the creditor may sue both you and your spouse, under the theory that this debt was incurred as a community debt. Also, if your spouse was a co-signor on this account, even if he or she did not use a card, he or she may will have contractual liability for the debt. However, if your spouse was an authorized user, meaning you simply requested an additional card and he or she never signed a credit agreement, then your spouse has no contractual liability for the debt, but due to your state's community property laws, your spouse may have statutory liability.

Community Property States

Community property is a marital property scheme used in nine states:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

Alaska allows married couples to choose either community property or equitable distribution when determining ownership of marital assets. For that reason, Alaska is often considered a community property state.

Generally speaking, if you live in a community property state, debts incurred during the marriage to benefit the community, such as credit cards used to purchase items that benefit both spouses, are considered community property, and are therefore owed by both spouses regardless of whether both spouses signed the credit card agreement. For example, if you lived in Washington State and incurred debt during your marriage, both you and your spouse, as a marital community, could be sued to collect on the debt. If a judgment were obtained against you, the bank accounts in both your name and your spouse's name could be levied to enforce the debt.

Many creditors do not go to the trouble of suing both spouses in community property states, as doing so tends to complicate the legal process involved in obtaining a judgment. For example, in California, credit card issuers sue the spouse who opened the account. If the creditor chooses to sue only one spouse, and thus obtains a judgment against only the spouse who opened the card, the creditor may levy or garnish the assets of that spouse alone.

If you live in a community property state, and have defaulted on a credit card debt in your name only, consult with an attorney to discuss the liability for you and your spouse. Since community property schemes vary from state to state, it is important to discuss your situation with a legal professional familiar with your state's marital property laws.

Financial Responsibility of a Co-signers and Authorized Users

If your spouse was a co-signer on this debt, meaning he or she signed a credit card agreement when you opened the account, even if that was only to use his or her income in obtaining the desired credit amount, then your spouse is liable for the debt, and thus may be sued by the creditor to collect the debt.

If your spouse was only an authorized user on the account, meaning you simply requested a second card for him or her, but your spouse never signed a credit agreement, he or she is almost certainly not legally liable for the debt. Many consumers confuse co-signers with authorized users. The key difference is  authorized users are not legally liable for the debt, and therefore cannot be sued to collect on the debt.

Review the credit card statements and the credit reports for you and your spouse to help determine if your spouse is a co-signer or an authorized user. If your spouse is a co-signer, both your names will likely be listed on the credit card statement. If he or she is an authorized user, the account will likely appear on your spouse's credit report, listing him or her as an authorized user, but your spouse's name will probably not appear on the account statement.

If you do not live in a community property state and your spouse was not a co-signer on the credit card debt in question, then your spouse is probably not legally liable for this debt. Therefore, the creditor should not be able to levy your spouse's bank accounts, garnish his or her wages, or take other action against your spouse in an attempt to enforce the debt.

However, if you reside in a community property state, being an authorized user does not insulate a spouse from community debt liability.

Consult with an Attorney 

Consult with an attorney to discuss your situation, your state's laws, and what effects this debt may have on your spouse's assets. Also, be aware of potential tax implications. For instance, if you file a joint return, it is possible to have an expected tax refund diverted to pay off a debt that only one party owes. 

If you are struggling to pay your credit card debts, you should explore the various options available to you to assist you in resolving these debts. I encourage you to visit the Bills.com Dept Help page.

I wish you the best of luck in resolving your credit card debts. I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

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Comments (42)


Braxton C.
Queens, NY  |  May 20, 2013
I ended a relationship with a guy I dated but never had intimate relations with. He pursued me for years before with no response on my end. As a gift he took out a credit card with my name on it under his account. I never verbally nor in writing agreed to any responsibility as the card was presented to me as a gift. He first kept trying to contact me and pursue a relationship with me. After being told I wanted nothing to do with him, he fed ex-ed me a copy of the credit card statement with prestamped envelopes he made out to his address. Am I liable for this debt by law of NYS?
Bills.com
May 21, 2013
I can't give you legal advice, as only an attorney can properly do so.

My guess is that you're not financially responsible for charges made on an account on which you were an authorized user, but I suggest you speak with an attorney who can review all the facts and offer an authoritative opinion.
Tony W.
Fort Myers Beach, FL  |  May 30, 2011
after divorce ex wife used / increased an unsecured loan that was in both our names and now defaulted. I didn't authorize this and now I am on the hook for over $100,000.00. Is this legal and what can I do?
Bills.com
May 31, 2011
You need to consult with an attorney who can review the original agreement and determine what recourse you have. It may have been improper for the lender to have increased the joint line of credit without your permission,Your situation is a good reminder that all common debts, loans, and lines of credit should be closed out, when a marriage dissolves.

The terms of your divorce decree will also have bearing on the issue. If you used an attorney in your divorce, consult with him or her to see if your ex's actions were a violation of the decree. If not, review the decree and seek a consultation with an attorney experienced in family law.
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Bills.com
September 10, 2010
I do not have good news for you. As you suspect, community property law, generally speaking, obligates both spouses to pay the debts one spouse incurs. However, I hasten to add that I have not studied Washington family law, and Washington may have exceptions for spouses who are not living together and intend to divorce. Consult with your divorce attorney about this matter. If you do not have a divorce attorney, get one immediately.
Bob W.
September 09, 2010
My wife walked out over a year ago. Before doing so she acquired a Capitol One credit card and gave me a second to use because she said the interest rate was lower than my own Bank of America card. I don't recall if my name was on the Capitol One card, but do not think so. I never signed any document regarding it. So on the day she walks out she wants the card back and I gave it to her. Over a year later she decides she wants a divorce and since we live in Washington State (community property state) I am concerned she will run up a huge balance, leave the country (she's a resident foreign national) and I'll be stuck with the bill. I contacted Capitol One and they said they can't help me if I'm not associated with the account. They didn't care about community property and the like. I should also mention my wife's name was on my Bank of America card and when she contacted them to remove her name the bank immediately closed my line of credit that I'd had for over 20 years and had never missed a payment. My question is am I liable for the debt on the Capitol One card if she runs up a huge tab and leaves the country? She is capable of doing so out of spite. Thank you.
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Bills.com
May 11, 2010
You mentioned the title of the house is in her name and your name. Because you titled the property in both of your names, any judgment-creditors for either spouse can attach a lien to that property. The debt being incurred before your marriage is irrelevant under these circumstances.
Joe .
May 10, 2010
My wife before we were married incurred a debt from a Neurology Clinic. She never was able to pay the $500 or so dollars and has been in collections for this debt about 4 years. We bought a house 1 year ago. Now the collection agency of the medical debt is putting a lien on the house. The loan is only in my name and title is in hers and my name. How can they put a lien on the house if the debt happened before we were married? Please help.
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Bills.com
March 04, 2010
I would like readers to offer their thoughts and suggestions regarding your question. Readers?
Chuck J.
March 03, 2010
Sir: I live in California. About a year and a two years ago, my wife came to me all despondent and confessed that she had run up $98K in credit cards...I was more than shocked....but the vows say in sickness and health, richer or poorer...so I agreed to take out a loan against the house and paid off her debt thus encumbering the house which should be paid off by now. What she spent it on I have no idea...there's not much to show except we raise and show dogs. I retired in 03 and am living on my retirement, some monthly disability checks from the military, and a small social securtiy check. I just found out that she has gone out AGAIN and run up another $95K in credit card debt...and I'm at the end of my rope. Quite obviously she has a psychological problem with spending but that's beside the point and something I have to deal with. I own several Porsche turbos, a fifth wheel, nice boat, and dodge dually diesel all of which I paid off on my own and thru a medical settlement and and own everything free and clear. I've sunk all my money into the house in upgrading, bought all the appliances replaced the roof, brick work, painting etc, and paid for it all. We maintain separate accounts except for checking which she has access to do online banking thru Bill-Pay (we share in house payment and car insurance, utilities etc)...so that's a joint account that my retirement check goes into. The phone has been ringing off the hook and I won't even answer the phone to my own home...all my friend tell me to divorce her, but then I'd lose what house I do have and I'm 67 now and not exactly a spring chicken and not too anxious to venture out into the cold world with the economy the way it is. I have a bit in a separate savings, and another account with about $80K that I set aside to leave my for my kids by another marriage. Other than have my head examined for a vacuum leak...what's my potential liability now?
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Bills.com
March 01, 2010
The answers to your questions are very fact-specific, and I would be doing you a disservice by trying to answer your questions here based on what you provided. You need to consult with a Washington attorney who has experience in family law. He or she will be able to review your entire situation in detail, and will give you precise answers to your questions.
Kathy .
February 26, 2010
I filed for divorce on Feb.23, and I work full time. we own a home which we can't keep we are current on mortgage payments. He is unemployed ANDWE LIVE IN wa and we live in WA state. He owned a 3 acre parcel before marriage and I owned a home. If we default on the home which we now live in will my home that I owned before marriage have a lein? Or will he be equially liable on his 3 acre parcel? Could he quit claim his property to a family member prior to the divorce filing?
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