A high net worth divorce is often complicated by many types of debt, including that associated with credit cards. Just the same as your assets, it’s imperative to negotiate the division of debt, as this can impact your life and finances in many ways.
If you have joint credit card debt and are heading into the divorce process, it’s critical to understand your options and the strategy that makes the most sense. Here are some ideas to consider:
- Pay off joint credit cards together: Before you divorce, talk about your ability to pay off any joint credit card debt that you’re carrying. It’s not always easy to part with a large chunk of your savings, but it’s often better than getting stuck with half the debt in divorce.
- Cancel all joint credit cards: Once you have a plan of action in place, cancel joint credit cards to avoid a situation in which your soon-to-be ex-spouse continues to use them.
- Use a balance transfer credit card: With a balance transfer credit card, both individuals can take on half of the outstanding debt. This allows you to close all joint credit cards, and manage your debt however you best see fit.
- Keep detailed records: Review your past three to six credit card statements and make note of joint purchases, your purchases and your spouse’s purchases. You may find that the other individual is spending a lot more than you, maybe because they know divorce is in the future.
When staring down a high net worth divorce, it’s easy to focus all of your attention on your assets. From the family home to bank accounts, from retirement accounts to stocks and bonds, there’s a lot on your mind.
It’s critical to protect your legal rights in Texas, in regard to the assets you’re entitled to, but don’t forget about any debt you’re carrying with your spouse. You need to work this out before or during the divorce process, so turning a blind eye isn’t suggested.
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