Maryland residents who have ever gone through a divorce know that sorting out financial issues can be a complex process. Those who are considering a divorce may wish to consider some of these potential pitfalls ahead of time. One consideration is whether a spouse's business credit card debt could have any affect on a soon-to-be ex's own credit rating. One woman who wrote in to a well-known media outlet wanted to know if her credit rating could take a hit in the event that the husband she was divorcing failed to pay his business credit card bills on time.
One financial expert reported that her potential liability for this credit card debt would depend in large part on the laws in her specific state. Unraveling what liabilities can apply to both former spouses depends on whether a state is considered a community property state or how divorce laws dictate that marital assets are distributed. Some require an 'equitable' division of both assets and liabilities, like credit cards.
Another factor that will play a large role in determining potential liability is what specific agreements the two spouses have signed with the companies issuing the business credit cards. Spouses who have co-signed for such credit, for instance, can almost certainly face the risk of a credit card company coming after them for missed payments as well. Ensuring that all separate assets are maintained in separate accounts may provide a certain level of protection, but even that may not be foolproof.
When it comes down to it, a spouse going through a Maryland divorce may want to seek advice from an attorney experienced in practicing family law to see what sort of obligations they may face in this situation. Determining whether companies may be able to come after a former spouse for unpaid business credit card bills could be a complicated task. Seeking out advice from someone experienced in this area of the law may provide some peace of mind going forward.
Source: Fox Business, "Will my Husband's Business Card Debt Hurt my Credit After Divorce?" Elaine Pofeldt, April 25, 2013