Divorce can be a complex process, especially for individuals with high assets. A common concern is whether you are responsible for your spouse’s credit card debt. The division of debt during divorce follows specific guidelines.
Marital vs. non-marital debt
In Maryland, the court distinguishes between marital and non-marital debt. Marital debt is incurred during the marriage for the benefit of both parties. Non-marital debt is incurred before the marriage or solely for one spouse’s benefit.
If your wife accumulated credit card debt during the marriage for household expenses or joint purchases, it is considered marital debt. If she accumulated debt for personal expenses or before the marriage, it is considered non-marital debt.
Equitable distribution
Maryland follows the principle of equitable distribution. This means that debt is divided fairly, but not equally. The court considers several factors to determine what is fair. These include the financial situation of each spouse, their contributions to the marriage, and the reasons for the debt.
The court will look closely at how the debt impacts the overall financial picture. If your wife incurred significant credit card debt for personal luxury items, the court may assign a larger portion of that debt to her.
Modifying existing agreements
If you are already divorced and need to modify an existing agreement regarding credit card debt, Maryland law allows for modifications. Significant changes in financial status, such as a drastic increase or decrease in income, can warrant a review of the agreement. You can also seek modification if evidence proves that the debt was misrepresented during the divorce proceedings.
High-asset individuals should proactively protect their financial interests during divorce by keeping detailed records of transactions and debts, staying informed, and seeking advice on financial obligations.
