Is My Spouse Liable for My Credit Card Debt?

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

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Bill's Answer: Answered by Mark Cappel

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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Comments (124)


Robert S.
Colorado Springs, CO  |  April 08, 2014
I live in Colorado and I have student loans I am paying off. Here in Colorado is where I got my student loans. I'm getting married next year. If I fall behind in my loans or become delinquent in my loans can they go after my soon-to-be-wife after we're married?
Bills.com
April 08, 2014
Colorado is a common law state, which means there is no community property for creditors to pursue. However, any joint financial accounts are vulnerable to account levy, as is any jointly owned real property.

In other words, go ahead and bank at the same bank or credit union, but open separate accounts. Feel free to buy a house, but title it in one spouse's name, and not both names. Any jointly titled accounts or property is vulnerable.

If you receive a notice of a lawsuit, consult with a lawyer immediately.
James D.
Burns, MN  |  July 05, 2013
We live in Minnesota. My wife went through divorce and was given the house. She tried for more than a year to refinance but the bank said she did not make enough money and had to let the house go. The divorce papers say she will refinance the house. Her ex-husband was still on the loan that went to foreclosure. The house had an alarm system that was in her ex's name only. We have the contract and her name never appears on it. She tried to move the bill to her name and asked her ex to move her name to the account and he refused. The bill has never been paid because they were not coming to my wife. He is threatening to sue for the money owed on the bill. Does he have a case?
Bills.com
July 05, 2013
The ex-husband can file an action (a lawsuit) against your spouse. However, once both parties stand before the judge and explain their sides of the case, the judge will be very curious to learn why the ex-husband refused to allow the account transfer, which would have avoided this mess. In law, the ex-husband has "unclean hands," which the law despises. If your spouse can prove she tried to convince her ex-spouse to transfer the account, she would have a convincing, winning case.

Your best course of action is to make an appointment for your spouse with a lawyer, who can draft a letter to the ex-husband explaining in greater detail what I just shared.
Brandon F.
Houston, TX  |  August 07, 2012
I signed a credit card contract when I lived in Texas, but I was not married at the time. Now, I live in Colorado and I am married. Since, Texas is a community property state, would they be able to garnish my spouse's wages for the debt?

Also, Texas does not allow wage garnishment for credit card debt. Sure, they can seize your bank account, but you can simply have the employer give you an old fashioned check and cash it at their bank.
Bills.com
August 08, 2012
It is possible for the original creditor, the credit card issuer, to file a breach of contract lawsuit against you in Texas or another state, depending on the terms of the contract you signed. If a collection agent is pursuing you, it must, under the FDCPA, file a lawsuit against you in your state of residence. You mentioned Colorado. Colorado is the state most likely a creditor would file an action in court against you.

Focus on understanding the debt laws in your current state of residence, and not the state where you signed the contract with the credit card issuer. Colorado is not a community property state — it is a common law state when it comes to family law. Based on the facts you shared, I would guess your spouse has no liability for your debt. However, consult with a Colorado lawyer who has civil litigation, consumer law, or bankruptcy experience to learn more about your rights and liabilities.
Tania E.
Tulsa, OK  |  November 28, 2011
I live in Oklahoma. I had been married for 11 years and for all those years I was pretty much a stay at home mother. I was born in another country and just moved here when I married my husband (I'm a citizen now), and in all this time since I never worked, every credit card and every thing was acquired in my husbands name and under is social (he actually has most of these cards since before we married). I had access to credit cards as an authorized user, but my social was never used and as such, I never acquired any credit history. Actually my credit history is 0. Anyway, now that we are divorcing, am I liable for any part of the debt?
Bills.com
November 29, 2011
Because Oklahoma is not a community property state, and you have not signed a contract with the credit card company, you should not be liable for your husband's credit card debt.

I recommend that you speak with your divorce lawyer regarding the division of property, and discuss with him or her your husband's credit card debts.

Also, you should start working on creating your own credit score. Use Bills.com to be more informed about credit scores.
Tami H.
Surprise, AZ  |  November 10, 2011
I stay home Mom, never work only take care kids and husband for 20 years. I have credit card but as a supplement from my husband. he apply credit card using his SSN. now we getting divorce, can I be responsible for credit card debt?
Bills.com
November 11, 2011
Ignoring the divorce scenario, a signer of a credit card contract is responsible for credit cards in the signor's name alone and any joint accounts.

Divorce does not change the relationship the signer has to the credit card issuer (or any other creditor), but it may change which spouse must pay the debt. For example, in community property states, a court may decide that each spouse must pay 50% of an account's credit card debt. In non-community property states, the court may make similar finding if the charges on the credit card were for the benefit of both spouses or their children. It is impossible to make detailed statements about the division of assets and liabilities without a thorough analysis of the couple's finances.

Consult with a family law lawyer in your state because, as I mentioned, as each spouse's responsibility for debts will depend on your state's laws.
Angie E.
Pasadena, CA  |  November 07, 2011
I had $30K in credit card debt when I got married. My soon to be ex paid it all off. He now wants to getting out of paying alimony saying the $30K was a loan to me. I never signed anything. Can he offset this $30K against the alimony I am entitled?
Bills.com
November 08, 2011
I am skeptical he can pass-off as a loan something that was paid without the two of you having made some kind of loan agreement at the time.

My opinion, however, is not something for you to rely upon. Consult with a divorce attorney to understand your rights and to best protect your interests.
Natalie S.
Citrus Heights, CA  |  November 03, 2011
One more: We live in California. Do you know if prenuptial agreement can protect me from his future debts? In other words, if we have a prenup, does that guarantee that his debts that he acquires during marriage are only his debts? Thank you
Bills.com
November 03, 2011
"Protect" is a relative word. A prenuptial, also called an ante-nuptial contract, binds the two parties but has no effect on third parties. Person A and Person B can sign a valid ante-nuptial agreement in California that states in effect, "We each agree to be personally liable for our own debts incurred before or during our marriage," and a California court would probably enforce that contract. However, neither Person A or B could use the ante-nuptial as a shield against Creditor 1, 2, 3 etc., that receive a judgment and now seek to attach the Person's community assets.
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Natalie S.
Citrus Heights, CA  |  November 07, 2011
Thank you. I guess in that case the question is: "Can a third-party (creditor) receive a judgement that allows him to withdraw money from another spouse using the community property law IF spouses have signed prenuptial contract that states that they keep their debts separate?" In other words, is prenup. even needed if it doesn't protect you from your husband/wife's debts? Thanks again, very useful site!
Bills.com
November 07, 2011
A valid ante-nuptial agreement binds the spouses, but has no impact on the rights of third parties.
Natalie S.
Citrus Heights, CA  |  November 03, 2011
We live in CA and are planning to get married. As I understand, his student loans and credit card debt that he has right now does not roll over as my debt since those were acquired prior to marriage, right? What about if during our marriage he gets: 1. a speeding ticket when we are married; 2. Student or any other loan in his name without my signature; 3. New credit card debt in his name. Am I liable for any of the three above, or better question - would his creditors pursue me? I: 1. own a house in my name, purchased before marriage; 2. earn a monthly salary. Thank you in advance!
Bills.com
November 04, 2011
For a general discussion of the issues you raise, see the Bills.com resource California Student Loan Default which discusses spousal liability in a student loan context, but the overall concepts apply.

Regarding your questions:
  1. Spouse A (or other family members) have no criminal liability for Spouse B's traffic violations or other crimes, major or minor.
  2. The community is responsible for spousal pre-marital debt. However, if the couple divorces, student loans become the signatory-spouse's separate property.
  3. In practice, a creditor will pursue the signatory-spouse first. If there is a default followed by a judgment, then the judgment-creditor can pursue the couple's community property. In practice, this is rare, but it happens.

Consult with a California lawyer who has family law experience to discuss a ante-nuptial agreement to clarify each party's rights and expectations.

Lisa H.
Evesham, NJ  |  November 03, 2011
I've been divorced for 7 years. My ex has just filed bankruptcy. He removed my name from the mortgage but didn't remove it from the RV loan, which was purchased in Texas. HE HAS THE RV. He lives in Florida, I live in New Jersey. Is there any way I can have my name removed from the loan? His bankruptcy is effecting my credit because of this RV loan. Can the bank come after me for the money? What can I do?
Bills.com
November 03, 2011
Two reading assignments for you:

Consult with a bankruptcy lawyer in your state to learn more about your liabilities and rights, and if you have options other than to pay the loan or file bankruptcy yourself, should the lenders pursue you.

Veronica R.
Cleveland, GA  |  November 01, 2011
Ex plans to file for divorce and agreed to take on all debt including debt that is soley in my name. He plans to file bankruptcy. Can he file bankruptcy on the debt that is not in his name? We lived in Ohio and I now reside in Georgia.
Bills.com
November 01, 2011
The question is not whether someone can include debt "in their name" in a bankruptcy filing. The question is, "Does the person filing bankruptcy have legal responsibility for the debt?" Details matter. Consult with a bankruptcy lawyer. He or she will review the debts in question and advise you, or your spouse, accordingly.
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Michael M.
Norcross, GA  |  November 27, 2011
If the divorce decree stated he had to pay the debt in your name then he will be in contempt of that decree if he no longer pays it. Also, if the debt from the divorce is in the form of alimony, then it cannot be discharged in bankruptcy. However, you would likely have to fight over that in bankruptcy court if the terms in the decree were not clear.
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