The name on an account does not determine who pays a credit card balance in a divorce in Ohio. A card that is opened only in the name of your spouse can still be divided between you. And a court order telling your spouse to pay the joint card will not stop the bank from coming after you if they do not.
Ohio Starts With an Equal Split
Ohio’s property division statute, R.C. 3105.171, requires courts to divide marital property equally unless an equal split would be unequal. The statute deals with property, not debts. In practice, this makes little difference.
Whose name is on the card is not the test. The courts look at when the balance was run up and what was paid for.
Marital Debt vs. Separate Debt
Every balance is sorted first. Typically:
- The balances you brought into the marriage usually stay yours as separate debt.
- Groceries, rent, utilities, and the children’s activities are considered marital expenses, even if they are charged to only one spouse’s card.
- Spending after separation can cause the most arguments. Legally, the marriage continues until the final hearing, unless the judge decides on an earlier and fairer end date through division (A)(2)(b).
- Charges that benefit only one spouse, like a gambling habit or gifts for a new partner, can be assigned to that person alone.
When Courts Divide Debt Unequally
Equality is the starting point, but it is not a guarantee. The judge will need to weigh various factors in making a decision, including:
- How long you were married.
- Each spouse’s financial situation, including assets and liabilities.
- Any previous agreements you may have reached regarding division of assets during a separation.
- Other factors that the court deems relevant and fair.
Financial misconduct also changes the outcome. If a spouse wastes, conceals, or fraudulently disposes of marital assets, Division (E)(4) allows the court to award the other spouse a larger share in order to compensate for it.
Hiding a Credit Card Can Backfire
Every spouse must fully disclose their debts. The Supreme Court of Ohio’s Affidavit of Property and Debt asks you to list your own debts, your spouse’s debts, and all joint debts. A spouse who substantially and willfully fails to disclose can face an award of up to three times the value of what was hidden under division (E)(5).
Your Divorce Decree Does Not Bind the Credit Card Company
Your bank never signed your divorce papers. As the Consumer Financial Protection Bureau explains, a decree can assign debt to one spouse, but a creditor can still collect from anyone whose name is on the account. Authorized users are different. They are generally not responsible for the balance.
If your ex stops paying the joint card assigned to them, you may need to pay the bank first. Then, you can ask the court to enforce the hold harmless provision of the decree through contempt.
A few steps to reduce risk:
- Request your credit reports to ensure you are aware of all accounts linked to your name.
- Ask issuers to cancel joint cards and prevent new charges.
- Remove your spouse from being an authorized user on your cards and have them remove you from theirs.
- Push for joint balances to be settled or transferred to the other spouse’s name before the divorce decree becomes final. This is most important.
What If Your Ex Files for Bankruptcy?
Bankruptcy can undo a debt division that looks solid on paper. Under 11 U.S.C. § 523(a)(15), debts owed to a former spouse under a divorce decree generally survive Chapter 7, so your ex’s promise to hold you harmless stays enforceable. Chapter 13 works differently. Some of those obligations can be discharged at the end of a completed plan. Either way, the card company can still pursue you for a joint account.
Protect Yourself Before the Decree Is Final
Credit card debt is often the last thing divorced spouses think about and the first thing they regret. Once property division has been entered, the court cannot change it unless both spouses give explicit written consent. Negotiations are your best chance to make sure you get it right.
The attorneys at Axelrod & Hellier, LLP can review every account and provide real protection for your settlement. Contact Axelrod & Hellier, LLP today to schedule a free consultation.