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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 03-18-2017, 11:25 AM
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Default Matrimonial debt and credit cards

Asking on behalf of a friend (I think I know the answer but want to confirm):

She's initiating a divorce. He's moved out but forgot to get his mail forwarded. She's getting credit card statements for 10 cards in his name that she didn't know existed. She opened them (and yes, I know you're not supposed to open other people's mail) and found roughly $100K in credit card debt, all cards almost maxed out, current finance charges roughly $6K/month. She didn't recognize any of the recent purchases (mainly alcohol and restaurant meals). STBX says this is marital debt and she's half responsible, she says no it isn't because the cards were in his name, paid out of his bank account without her knowledge, and none of the purchases benefited the household (as far as she can tell).

So is this debt she will have to share?
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Old 03-18-2017, 01:49 PM
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I think your friend is living in another reality.

If someone racks up 100k in restaurant/entertainment I find it 'fantastic' to say the other didn't know about it, particularly if the two were living together. Over what time period did the "binging" occur?

This is likely matrimonial debt (can be in either person's name) if debt accumulated during the period of the marriage IMO.

also... if the credit card bills were coming to the matrimonial home all along, it's pretty lame to try to say you didn't know the debt existed. Does your friend think these credit card companies simply mailed out blank statements for shits and giggles?

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Old 03-18-2017, 01:51 PM
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Offhand, I would say that debt incurred during marriage is pretty much automagically marital debt. I have seen exceptions for gambling debts, but not much else. I don't think alcohol and restaurants are a special case that would somehow cause the debt to be excluded.

I am assuming that this debt occurred before separation. If the debt occurred after separation it is of course just personal debt.
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Old 03-18-2017, 01:53 PM
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Also: Your friend lost a good chance to be sneaky. I would have let him fill out his financial disclosure, sign it, and then provide evidence that he was lying. The credibility hit would have been priceless.
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Old 03-18-2017, 01:58 PM
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Quote:
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Also: Your friend lost a good chance to be sneaky. I would have let him fill out his financial disclosure, sign it, and then provide evidence that he was lying. The credibility hit would have been priceless.
Initially I was thinking the same thing but I think this may be more of a case of a couple living beyond their means.... blame game.
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Old 03-18-2017, 02:13 PM
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I know someone whose ex did this. Took out cards and maxed them out to furnish her new life. It was marital debt and they went bankrupt.


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Old 03-18-2017, 02:19 PM
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I know someone whose ex did this. Took out cards and maxed them out to furnish her new life. It was marital debt and they went bankrupt.


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I'm sure it happens frequently^especially if bills are sent by email. However, to pretend to not know about "10" cards if bills were coming to the home all along? Even the standard of living would/should alert someone. I can assure you that I would have noticed if my ex racked up 100k in restaurant/booze.
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Old 03-19-2017, 03:31 PM
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Friend's STBX has big addiction problems and she assumes most of the debt is related to that (alcohol plus lots of cash advances). The statements came to the house but STBX always got them before she saw them (I'm getting all this from her, of course - it may or may not be completely true). (And the $100K is just the outstanding balance - who knows how much he charged on the cards and then paid off?).

They also had an arrangement whereby he paid the mortgage (house in both their names) and she paid the other households bills (taxes, utilities etc) and they reconciled at the end of each year. She got a call from the bank saying that the mortgage hadn't been paid in full for several months. So her credit rating is in trouble, and she has to take on paying the mortgage in full herself, at least until they manage to sell the house, at the same time as lawyer bills. It's your basic financial disaster.

I too think it would be hard to miss if my spouse was living so far beyond his/our means, but denial seems to be very powerful. She was in denial about his addictions for years until the evidence could no longer be explained away.

I guess the takeaway is to always keep your own finances separate and don't let your partner pick up the mail every day. Sad.
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Old 03-19-2017, 04:42 PM
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I know people where the husband (high-income earner) put around 100k up his nose in under a 2-year period. He ended up going to one of those expensive rehab places in the US for 6 months and joining NA. When he quit buying the coke his supplier wasn't happy and their house subsequently was broken into while she was home. (Wife was in denial about addiction and this was a big wake-up call to her). A very scary time for her. Interestingly, this couple stayed together. It took her going back to work (after a 15 year absence) to help pay down the debt and plenty of family counselling. Now the two of them are both doing well and looking forward to retirement together with ample money in the bank. They are one of the few fortunate couples who manage to survive addition.
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Old 03-19-2017, 04:50 PM
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Quote:
Originally Posted by stripes View Post
Friend's STBX has big addiction problems and she assumes most of the debt is related to that (alcohol plus lots of cash advances). The statements came to the house but STBX always got them before she saw them (I'm getting all this from her, of course - it may or may not be completely true). (And the $100K is just the outstanding balance - who knows how much he charged on the cards and then paid off?).

They also had an arrangement whereby he paid the mortgage (house in both their names) and she paid the other households bills (taxes, utilities etc) and they reconciled at the end of each year. She got a call from the bank saying that the mortgage hadn't been paid in full for several months. So her credit rating is in trouble, and she has to take on paying the mortgage in full herself, at least until they manage to sell the house, at the same time as lawyer bills. It's your basic financial disaster.

I too think it would be hard to miss if my spouse was living so far beyond his/our means, but denial seems to be very powerful. She was in denial about his addictions for years until the evidence could no longer be explained away.

I guess the takeaway is to always keep your own finances separate and don't let your partner pick up the mail every day. Sad.
If your friend's husband still has his job then she should look at getting an interim order for automatic deduction of his income for Interim Spousal support to pay mortgage. Also she can meet with bank and lay out the situation, namely his addition and what she is doing about it financially) and see if bank can offer some sort of short-term payment arrangement.

If she doesn't take some sort of measure to get his income from source then there would be no reason/no repercussion for him to not pay. Sometimes one has to treat irresponsible people like children. This sounds as though this is one of those situations.
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