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Can a spouse pass off malicious credit card debt in a divorce?

On Behalf of | Apr 7, 2024 | Divorce

For many people preparing for divorce, protecting themselves financially is a top priority. They naturally worry about how they should split the property they’ve accumulated during the marriage and how the behavior of their spouse might affect their future. In some cases, there could be reason to worry about debts that one spouse took on with malicious intent.

For example, some people know that their spouse has engaged in financial misconduct during the marriage or in the weeks leading up to the divorce filing. A spouse angry about a divorce or planning to file for divorce could spend thousands using marital credit cards. They might max out the account so there’s no available credit left and leave the household with a major financial headache.

Does the spouse who didn’t spend all of that money need to worry about paying back those debts?

Inappropriate spending could constitute dissipation

As a general rule, judges usually do not consider misconduct when making decisions about property division. Still, certain types of misconduct require adjustments to property division determinations. Dissipation or intentionally damaging the marital estate out of anger or spite can drastically alter the outcome of property division proceedings.

Provided that the behavior was different from someone’s usual spending habits, their spouse could present evidence of their unusually high amount of spending as proof of dissipation. The courts could decide to make the spouse who spent those funds directly responsible for repaying the debt.

Similarly, if there is evidence that a substantial amount of credit card debt is the result of adultery, feeding an addiction or financial infidelity where someone lies about their finances, the courts might exclude those debts from the marital estate during divorce proceedings. Although debts are often subject to distribution as part of the marital estate, the courts can consider the timing of when someone took on the debt and the intention behind acquiring the debt when deciding who should pay.

Conducting a thorough financial review can help people secure a fair and reasonable outcome in a pending divorce involving improper use of credit cards. Those who know their rights and rules about property division matters may feel more empowered as they prepare for the legal end of their marriage.