Is My Spouse Liable for My Credit Card Debt?

Ask Bill, Thursday, September 24 2009 | 37 Comments

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Is my spouse responsible for my credit card debt? What happens to my spouse if I file for bankruptcy?

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Question:

A debt collector is suing me for $5,700 in credit card debt. The credit card was in my name and the suit is also in my name only. Is my spouse responsible for my debt? If I get judgment against me and later file for bankruptcy will I still be liable for the debt?

Answer:

Generally speaking, if both spouses sign a debt agreement both are jointly liable to the creditor. However, if only one spouse signed the agreement, then depending on which state the agreement was signed or where the spouses now live, the non-signing spouse may have liability.

Spousal liability in community property states
Let us tackle the difficult states first -- the community property states. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin.

If the spouses now live in a community property state, or lived in one at the time the consumer debt account (such as a credit card account) was opened, the non-signing spouse may have incurred liability without signing a credit contract as co-debtor. If the debt incurred during your marriage was used for the benefit of both members of the marriage, liability may accrue to the non-signing spouse in community property states.

Regarding a non-signing spouse's liability IF the parties are living in a community property state AND the debt was incurred during their marriage for the benefit of both spouses, AND a spouse is sued and a judgment is rendered for a specific amount owed, the judgment can be collected by wage garnishment against any defendant included in the judgment order singularly or simultaneously. The garnishment amount is normally 25% of net income (that is, after withholding) but this varies from state to state. The creditor does not have any duty to "even out" the judgment liability between the spouses. A creditor has the legal right to collect 100% from either spouse, whichever is more convenient for them.

As a practical matter, even in community property states, many creditors do not go to the trouble of suing both spouses, as doing so tends to complicate the legal process involved in obtaining a judgment. However, this does not mean that a particularly aggressive creditor will not pursue all of its available rights to collect a debt.

One important disclaimer: Community property laws are unique to each state -- no two states share the same laws. The discussion above regarding spousal liability is meant to provide general information about community property as a theory. Your state's laws may vary from the general theory. Therefore, it is important to consult with an attorney in your state who can review the details of your situation and give you accurate and precise advice about your rights and liabilities under your state's laws.

Spousal liability in non-community property states
Generally speaking, if the spouses never resided in a community property state, and only one spouse signed the loan contract (such as a credit card agreement), then the signatory-spouse is liable for the debt. Conversely, the non-signatory spouse does not share in his or her spouse's liabilities in non-community property states.

Bankruptcy
Now let us turn to bankruptcy. Let us assume one spouse filed for protection under chapter 7 or 13 of the federal bankruptcy code. That filing may not have any effect, positive or negative, on the non-filing spouse. In a non-community property state, the filing of one spouse does not give the other spouse protection of the "automatic stay" (blocking creditors from collection) or the bankruptcy discharge.

Similarly, one spouse filing bankruptcy will not have an effect on the other spouse's credit report, if there are no joint debts. If there are joint debts, you can expect the bankruptcy to be noted in some way on the credit record of the non-filing spouse.

If both spouses are jointly liable to a creditor, the bankruptcy of one does not relieve the other of paying the debt. Upon a bankruptcy, the creditor may look to the other spouse for payment, unless the bankruptcy case is under Chapter 13. If the debt is a consumer debt to be paid 100 percent through the Chapter 13 plan, the co-debtor is protected by the co-debtor stay.

There may be good news for spouses who file for bankruptcy in a community property state. When one spouse files bankruptcy in a community property state, the marital community enjoys the protection of the filing spouse's bankruptcy discharge.

Consult with an attorney to discuss the possible ramifications for both spouses. Bankruptcy laws and courts are federal, but community property and family law vary from state to state. It is important to discuss your situation with an attorney familiar with your state's marital property laws.

Bankruptcy and judgments
Some judgments cannot be discharged in bankruptcy, including child support, repayment orders dealing with cases of fraud, student loans and some taxes. However, a credit card judgment can be discharged in bankruptcy.

Review the Bills.com bankruptcy help page to learn more about this procedure, what it can do for you, and more on which debts can't be discharged in a bankruptcy.

I hope this information helps you Find. Learn & Save.

Best,
Bill
Bills.com

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37 Comments

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Prior to my divorce my wife charged on a joint Visa Credit Card over $10,000. the card had a zero balance prior to her charges. I have been making payments since the divorce. Six months after the divorce my exwife filed chapter 13 Bankruptcy and included this credit card debt. The credit card company has frozen the credit card and stopped sending me statements. They have refused to talk to me about the Credit card bill. I have sent in payments to them for the last two months but they refuse to reply to my inquires. I live in California, Am I still responsiable for this credit card debt ?

Posted by Gerald Bertagna on 09/27/2009 12:01

My e-wife had me on a discover card as an authorized borrower. Which should have been removed 30 days after the divorce. Which she stopped paying on 1 year later. Which was reported to my credit report. Now what do I do? Thanks Tim

Posted by Tim Prust on 09/27/2009 16:46

The Visa account is subject to the "stay" ordered by the bankruptcy court. It is not surprising that your bank is not sending you statements or otherwise communicating with you with the stay in place. I suggest you speak to your divorce attorney about this matter. My guess -- note that word choice -- is that your attorney will recommend you to cease making payments until your ex-spouse's bankruptcy case is finalized and the Visa account in question is discharged (or not). If you are a co-signer (and not just an authorized user) of the Visa account, you are liable for any amount not discharged in a Chapter 13 bankruptcy.

Posted by Bill on 09/27/2009 22:14

Tim, I think you have a bigger problem than a derogatory entry on your credit report. You may be liable for the balance on the Discover card if your ex-spouse has defaulted. I suggest you consult with your divorce attorney to learn your rights in your state if that's what happened here. If not and the account is now current, then I suggest you dispute the listing. See the dispute listing sample letter at the Bills.com Debt Do-it-yourself center.

Posted by Bill on 09/27/2009 22:27

Along the same lines, my wife has a credit card that I do not have access to use. She uses it to make purchases for herself and the family. We live in a community property state. Since I am equally responsible for the bill, do I have a legal right to the statements? I've talked to the credit card company and they refuse to give me any information since I am not an authorized user. This account showed up on my credit report with a balance of 25K hence my concern.

Posted by John on 11/07/2009 13:17

This question stumps me. You say you are neither a co-signer or authorized user, but this account appears on your credit report. This is a long-shot, but you mentioned you reside in a community property state. Which one?

Update: The reader followed up with this clarification: The reader was a an authorized user of the account in the past, but had since been removed. In light of this additional fact, it is clear that the credit bureau is uninformed of your new status. Send the credit bureaus reporting this erroneous information a "dispute listing" letter, a sample of which you can find at the Bills.com self-help center.

Posted by Bill on 11/09/2009 12:08

My spouse has opened numerous credit cards in his name and using my credit worthiness and access to the banks I have history with, even listing me as joint account holder on these cards - without my knowledge what so ever - and now the debt has grown to over $70,000 and I just found out about it - he's been hiding it all from me all this time - we are in the process of getting a divorce - how can I completely disassociate myself from this debt and get my name off these credit card accounts and make sure none of this is reflected on my credut report? Please help me, I live in Colorado, thank you.

Posted by Debbie Oelschig on 12/15/2009 08:02

Work with your divorce attorney on this matter. At minimum, you will create and sign an affidavit stating that you were unaware of these debts and did not execute the agreements when your soon-to-be-ex-spouse opened the accounts.

Posted by Bill on 12/15/2009 10:32

i have several credit cards with very high balances ( over $ 40.000 and all only under my name). My income have been reduced to just $ 800 and beside I have a very serius health condition that doesn't let me work like before. Now I am thinking in filing for chapter 13 but my husband is afraid he will be responsible for my debt ( since he has a very good and stable job ) Can I file for chapter 13 without put him in risk that he needs to pay for my credit cards?? florida. Thanks.

Posted by maria on 12/19/2009 17:05

A non-signatory spouse to a loan contract does not share in his or her spouse's liability in non-community property states. Florida is not a community property state. Therefore, non-signatory spouses to loan contracts in Florida do not share liability for a spouse's debt. I encourage you and your spouse to discuss this issue with your spouse's bankruptcy attorney.

Posted by Bill on 12/19/2009 17:43

My father used credit cards to finance his efforts at commodity trading. Most of the time he goes bust within a year, begging for money to cover the debts from my mother who has now bailed him out three times. She did so not out of desire to help him continue trading, but to avoid making the large debts bigger through missed payments, fines and the like. They live in the state of Utah. To what degree is my mother liable for my father's debts?

Posted by kenton mattingley on 12/28/2009 18:17

If your mother signed the contracts for the credit cards in question then she is jointly liable for the debt. However, if she did not sign the contracts then she still has liability if the expenses are family related. Commodities trading is not a family expense under Utah law. See Utah Code Ann. Section 30-2-5 for more details.

Posted by Bill on 12/29/2009 09:38

My husband has a judgdment against him for some work he did as a contractor. We are married, live in Texas. He and I do not comingle our money. I don't even go by his last name. I have been subpoenaed for a deposition duces tecum and they are asking for my tax returns from prior to our marriage (he and I file separately) and my personal credit information. Is this discoverable?

Posted by tanya on 01/27/2010 17:37

I urge you to consult with a Texas attorney with experience in civil litigation. I am not a Texas attorney. The request for your pre-marital financial records strikes me as objectionable because it appears to be overly broad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence. However, a Texas attorney with whom you consult will be able to understand your entire situation, read the subpoena in its entirety, and thereby reach a precise legal opinion.

Posted by Bill on 01/28/2010 08:49

I lived in California before and I just moved to Georgia about 4 years ago. Do I consider myself as a Non-Community Property State? I have about $100K in credit card debt. One of them just sent a court paper with noticed of 30 days t contact them. I did contact them and tried to work out a payment plan but I failed to called them back within approapriate times. I have a business from a Sheriff department asked me to contact them. What can I do? I think I just have a default judgment against me. Urgent

Posted by Daniel on 02/03/2010 20:00

Call the sheriff and learn what he or she wants. Avoiding a law-enforcement officer who wants to talk to you is not a viable long-term strategy. A Georgia attorney will be able to give you a more precise answer to your questions than I because he or she will be able to read the summons and complaint, review the documents relating to your debt, and ask where you incurred the debt and signed the debt contract (i.e., California or Georgia).

Posted by Bill on 02/03/2010 22:20

KEY BANK OF OHIO SAY MY WIFE IF LIABLE FOR DEBT I DEFALUTED ON SHE NEVER USED ANY OF IT HOW CAN I STOP THEM FROM MAKING HER PAY?

Posted by KATHY on 02/23/2010 15:16

Your message lacks information on how the bank is "making her pay" or other facts that would provide clues that I could use to provide a useful observation. I suggest you consult with an attorney in your state who has experience in consumer law, who will be able to review your situation in person, interview you and your spouse to determine her liability, and advise you accordingly.

Posted by Bill on 02/23/2010 23:01

I had credit cards before my husband and I married, and of course his name is on none of them anywhere. I also have a car loan, again in my previous name. I have had health problems recently and will have to let the car go back and the credit cards go. I haven't ever had a car repossessed before. Will this effect his credit in any way? We have separate bank accounts because I owed the debts. Do I need to file bankruptcy? I have student loans that I have been paying one and have a 1 year deferment on the other and will not default on. Can I file bankruptcy and leave the student loans out of it? We live in Texas. Thanks!

Posted by Diane on 02/24/2010 00:08

Your questions require answers that are too long to fit here, and I would be doing you a disservice to try to summarize your options. Please see the following Bills.com resources: What Are My Debt Resolution Options? to get a better understanding of how to handle your credit card debt. Regarding the repossession question, see All about voluntary repossession. Finally regarding the student loan, see Student Loan Bankruptcy and the Bills.com Bankruptcy page.

Posted by Bill on 02/24/2010 21:19

I just applied for an auto loan to find out that a charge-off was on my credit report. This was a credit card that my husband had opened and ran up. I am listed soley as an "authorized user" not a joint applicant nor cosigner. The compnay refuses to speak with me because I am not on the account ?? I am in Ohio which is not a commmunity state. Can I get this off my report?

Posted by Lori on 02/25/2010 13:07

Many credit card companies report their card payment histories on the credit reports of both the primary cardholder and any authorized users. Reporting accounts on the credit reports of authorized users is allowed by federal law, despite the fact that authorized users are not legally liable for the debts.

Posted by Bill on 02/26/2010 09:46

i'll try to get her taken off and just left on the primary or I am just stuck with poor credit for seven years? I appreciate your help!

Posted by Rick on 03/01/2010 06:33

My husband and I resided in Oregon for most of our lives until I decided to go to school. We moved to S. Carloina for my internship for 1 yr and then got a job in Washington last year. He has approximately $60,000 in credit card debt, most of it was charged during my two years in school (in oregon) and 1 yr of externship in S. Carolina for living expenses, etc. I am not listed on his credit cards. We have only a joint savings account together. He also has two homes on his credit which I am not listed on. I'm making ok money now, but we are struggling because we pay over $2200 a month in credit card bills and $850 in school loans a month. Can he file for Chapter 7 and have his debt wiped away without creditors coming after me? We have been thinking about a divorce. Would I still be liable if we were divorced? Would we be forced to file a Chapter 13 and "re-organize" our bills because of my good income?

Posted by Megan on 04/08/2010 19:12

You are asking about Oregon Chapter 108 — Husband and Wife Relationship; Property Rights and related case law, about both I know little. Consult with an Oregon attorney who has experience in Oregon family law. Regarding the debt, see the Bills.com resource What Are My Debt Resolution Options? to learn if bankruptcy is the right option for you or your spouse.

Posted by Bill on 04/09/2010 09:02

My wife has a debt with Washington Mutual, which is now Chase. The debt was incurred a couple years before we got married. Since the Chase acquisition, another company bought the debt. They've now reported this debt on my credit file and it is showing up on TransUnion. They are claiming I was a joint account holder, which is completely false. I have never had an account with Washington Mutual, nor jointly with my wife or anyone else. What should I do?

Posted by Chris on 06/22/2010 02:50

Credit reports are notorious for their inaccuracies. Dispute the incorrect entry on your credit report with TransUnion and the other two major credit reporting agencies, if they got it wrong, too.

Posted by Bill on 06/22/2010 09:06

My wife of 4 years was diagnosed with breast cancer on nov of 2008 without medical insurance. We had to go through with the treatment saying no was not an option. As we were getting overwhelmed with the medical we sought legal help for a chapter 7 bankrupcy and were prepared to get a divorce(on paper) to protect what few assests we had left.House,car,and business were all mine for 12 years before we got married and all in just my name. the bankruptcy was discharged 7/09 and in 5/10 the hospital Bills from different collections agencys appreared on my credit report. I went from a 780 to a 510 overnight. I contacted a attorney to represent me and he wanted a $2400 retainer. These bills amount to 3500 i never made these bills they are not mine and were discharged in the chap 7.i am unsure were to go from here. I live in Indiana

Posted by Jason on 06/28/2010 12:28

I wish you would have used more precise language in your question. Who filed bankruptcy? Both or one of you? Were you a guarantor of your spouse's medical procedures? If your spouse filed Chapter 7 and you were not a guarantor, then dispute the listings for your spouse's procedures that appear on your report.

Posted by Bill on 06/28/2010 18:23

My girlfriend's former spouse took out five credit cards in my girlfriend's name while they were married. Each card has a small balance of about $600-700 and each card was taken out online using her information. She was not aware that the cards had been taken out and did not authorize her ex-husband to take out the cards. He was paying the minimum payment on the cards each month while they were married but hid the statements from her. Since the divorce, he stopped paying on the cards and she only found out about them because we pulled her credit report after she started receiving harassing phone calls from the banks. We live in a separate property state but the credit card companies continue to call and harass her and continue to report negative payment hisory on her credit report. They say she is responsible because they are in her name and they have her information. She wants to settle with the credit card companies to hopefully save her credit. Is there anything she can do to get these debts and the negative payment history removed from her credit reports and not have to pay these accounts?

Posted by Matt on 08/13/2010 07:14

The collection agents are telling your girlfriend nonsense. Consult with an attorney about filing civil charges against the ex-spouse for fraud. Also, bring the evidence to the district attorney in your county to learn if he or she believes there is a case of criminal fraud.

Posted by Bill on 08/13/2010 08:00

I found out two years ago when attempting to refinance my home that I had significant debt on my credit report. I later discovered that my wife of eighteen years had taken four of my credit cards, which are in my name only and she is not on any of the accounts or credit applications and charged up to sixty thousand dollars in debt and having the credit card companies to change the mailing address for the statements to a P.O. box which is in her name only. I then filed for divorce which is still pending. I had one of the cards before we were married. She even forged my name on the convience checks that arrive with the credit card bills. Am I responsible for this debt or do I have a defense for the credit card companies allowing her to change the mailing address to her P.O. Box. She apparently had the address changed online. The companies never contacted me about any changes. We live in Georgia. The attorneys are not too familiar with this kind of issue. Any information would be greatly appreciated. Thank you, Tommy

Posted by tommy griffin on 08/22/2010 04:56

Your attorneys are not familiar with fraud or breach of spousal fiduciary duty? My guess -- note that word choice -- is that Georgia case law does not have many cases that have gone to higher Georgia courts regarding facts similar to yours. It would be unfair and unreasonable for one spouse to profit at the expense of the other by opening secret credit card accounts using the forged signature of the spouse, and then leaving that spouse to pay the bill upon divorce. If your attorney cannot find Georgia case law on this matter then you need to find a more aggressive attorney who will represent you more vigorously.

Posted by Bill on 08/23/2010 10:13

My husband and I met in 2007 and married in 2008 in California. In 2010 I received a call at work from a collection agency. They were trying to collect on a defaulted credit card debt from my husband's ex-wife. My husband was listed as an authorized user. My husband is out on disability, so they were unable to garnish their wages. The company told me they were sending a Sheriff deputy to my work to serve me with court papers. My husband and I were being sued for this debt. They told me since we were married in a community property state I was liable for any of his debt, even if it occurred years before I met him. I have an excellent credit rating, so I agreed to a payment plan so I wouldn't risk my credit being ruined. But, this just doesn't feel right. Is this really California law?

Posted by Gigi on 08/27/2010 23:51

I live in Louisiana I have 6,ooo dollars of debt on one card.It is almost 6 months in arear.I am not able to pay at this time. Will my husband be liable to pay if this goes to collections or if i get sued. Thank you for your time.

Posted by Jessi on 08/31/2010 16:31

I cannot say for certain whether your husband will or won't be liable. Generally speaking when it is only one spouse that acquired the debt, no co-signer, then that spouse is responsible for that debt. However, if both of your names are on the card, with your husband being a joint borrower, then it is possible that a collections company can try to collect from him as well.

Posted by Bill on 09/01/2010 08:38

I am not an attorney so I cannot say whether the actions or comments made by this company are legal. I encourage you to speak with a licensed attorney in your state that can inform you as to whether you are responsible for this debt.

Posted by Bill on 09/01/2010 09:08