Credit Card Debt

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Mooner43

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My wife and I separated 5 months ago and she has retained a lawyer to sort out our stuff and debts and do a separation agreement.... so far on her terms.
Her credit card debt was listed as this was used for joint chiropractor visits which I agree I am responsible for. I also have an outstanding Visa debt of $6000 which was used for various things, trips, dining out together, cameras, tv, etc... etc.... does she share any of this debt accumulated during our marriage or am I on my own to repay it? thanks
 
it all goes into the family debt.....you both accumulated it and therefore split it...you need to research NFP....net family property, and how it gets divided, assets, less debts...split whats left ....in very simple terms of course, you could also own property etc. Also factor in income etc....
 
we also lived in a house owned by my parents, now she is asking for all the money she paid into each month ($450 for 4 years)...the money went to rent and utilities.
 
From what I understand, it depends on whether the accounts are shared. The courts will divide up debts through a divorce decree, so husband may pay mortage and wife may pay some other type of loan such as car. Shared credit card account debt would be shared. If you have seperate credit cards you are responsible for that on your own. It is your responsibility to pay off your own card. If she won't assist and you feel she should be responsible for assisting in paying off your credit card, you can file a claim against her in small claims court. It's the most cost effective as it costs little to nothing to file a claim and you may receive a judgment in your favour whereas if you decide to seek legal action against her it can be long, drawn out and costly.

If she does not want to assist in debt she has racked up on your card, you don't need to assist in repaying debt that you racked up on her card. Try to be reasonable with her and see if she returns the favour.
 
How she can ask for rent and utility money back is unreasonable. Had she put money into the home for renovations perhaps I could understand, but she paid to have a roof over her head and I can't see how a judge would ever award her that money back. That is totally ridiculous! Do you have a lawyer?
 
Mooner43 said:
we also lived in a house owned by my parents, now she is asking for all the money she paid into each month ($450 for 4 years)...the money went to rent and utilities.
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This is unreasonable. If she gets back all that money, then that means she will have lived for free for the last four years. Utilities are consumption and she paid her share of what she consumed. As for rent, this went to your parents, correct? If so, your parents, as landlords, have no obligation within your equalization with her.
 
court said:
If she does not want to assist in debt she has racked up on your card, you don't need to assist in repaying debt that you racked up on her card. Try to be reasonable with her and see if she returns the favour.
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I agree with this. If your card balances are similar, then agree to be responsible for your own cards and call it a day.
 
One must pay to live somewhere so she will not be reimbursed for monthly rent expenses/utilities. Even reno's can be tricky as it could easily be argued that she had the "benefit" of enjoying/using those renovations ie: a fixed jaccuzi tub, a fancy chandelier over the dining room table at which many nights were spent entertaining guests. The things are attached (literally) to the home.
 
thanks for your responses.. it seemed ridiculous for her to ask for $$ back for rent, she may be getting advice from a friend....I'll see if I can work out the credit card debt with her.
 
She's likely getting advice from a friend because her demands are unreasonable. I'm not sure what logic she is using, but it makes no sense. She wanted you to assume some of her credit card debt, but she isn't willing to assume some of your credit card debt? What kind of illogic would make that fair and reasonable? Some people are all me...me...me!
 
The TV/Camera's etc...who will keep possession of them? If it's YOU then that part of the CC debt is yours. (You have the asset that going along with the debt).

If it's HER, then she should be paying it off (asset tied to debt). As long as the balances are similar (ie. within 2000 of each other) call it a day, you'll easily spend that in legal fees anyway.

Rent/utils she can pound sand on.
 
You will calculate the value of each of your assets accumulated during the marriage. This includes the value of TVs, cameras, computers, but it will not be the amount paid, it will be their current resale value. Generally if you look for similar items on Craigslist and total the value, this will be acceptable, but make sure to copy the ads so you factually show that you made a clear effort to obtain the fair value.

If the items "yours" then you keep them, but the dollar value goes into your side of the ledger. Things like TVs and furnishinings, you may want to split them, you take the TV, she takes the dining table. Or one person can take them but during equalization you account for the value.

So in this way, the value of items is accounted for, if there is credit card debt that paid for them, this is accounted for separately.

Debt that is held jointly, in both of your names on record with the bank, should be split equally.

Debt that is held in her name is hers, debt that is in your name is yours, regardless of what was purchased. This isn't always "fair". If I pay thousands of dollars for a vacation, I will be stuck with the debt. However consider what would happen if I paid cash for that vacation 5 years ago? Am I going to somehow convince the courts that I should be reimbursed? This is exactly why the debt in your name is yours, it is no different than if you spent cash on your ex or your family.

There are two basic scenarios that can play out. Ontario Family Law does not allow someone to show a net value below $0. This means that if there are few, or no assets (this is common in a short marriage when you are fairly young, rental home or apartment and no investments) then you both just show a Net of $0, you do not split the debt. This is how the courts would see it. If you go to mediation, you may come to a different agreement.

If you took out a loan for your partner's education or something else that was clearly for their benefit alone, you can try to make an argument that you should be reimbursed. This type of argument has little to do with family law and can just as easily (or more easily) be settled in small claims court. It won't fall under the Family Law Act or the equalization method. In Family Court you would approach this with an unjust enrichment claim. Don't bother if it is a few thousand dollars, it will cost you ten times that much in legal fees.

The other scenario that plays out is if there are sufficient family assets. RRSPs, house, cars, etc. There is more than enough on each side of the ledger and you don't have a net debt. This is the more common situation for established families. In this case, the debt is subtracted from your assets, so you each show a net asset. Then there is an equalization so each walks away with the same amount. From the situation you describe, you don't fit this scenario.
 
Mooner43: why would she be reimbursment for rent or renovations. She would have to pay rent to live somewhere else and where does one find a place to live these days for $450 per month? lets not forget the cost of utilities!
That is totally unreasonable and ridiculous.

The credit card is tricky. Most people think as court mentions in his post, that if each have their own credit cards, they are responsible. Not always.

In our case, we each had our own credit cards and a joint line of credit which were maxed out. The ex fought for me to pay 50% of his cards, 50% on line of credit, and for me to be responsible for my own credit cards.
When the Judge looked at what was purchased, he saw purchases for construction supplies (dry wall, lumber, etc..), kitchen cupboards, worldpool tub, rental of equipment (scaffolds, tools, backhoe), building, electrical permits etc... for my ex father in law 4,000 sq.feet new house he was building.
The Judge felt that since the purchases made were not for our house and not items we used, or would benefit in the future, he ordered for the ex to pay his cards, mine and the line of credit.

As one can see, it's not so clear cut and are grey areas as every case is different.
 
Well, from the posts here it seems the law may disagree... BUT

It is clear to me that (assuming you both had $0 when you met), that when you leave a marriage YOU SHOULD BOTH HAVE THE SAME NET WORTH.

This debt/credit card bs that often comes up in divorce - "oh, that debt is in your name only so that is your problem", is such crap! And it is obvious to me. Anyone who plays this game is trying to screw the person period.

Looking at how the debt was accumulated does not make sense. If I have a CC in my name and buy things with it, even if they are 'my things' like trips or golf clubs, does not make it 'my debt'. I could have just as easily bought those things with cash and paid the house bills with my CC.

When you are married and one person buys something for themselves - it is purchased by both parties, regardless of the means to buy it. If this was not the case, then "equalization" would involve who spent what and why during the marriage and whose name was on a particular debt would not be considered.

My ex's lawyer tried to assign debt to me, and assets to my ex - such bs. We had nothing when we married, so we finally agreed to split everything 50/50 using a simple spreadsheet so that we ended up with the same net worth. We agreed to a value of the house and cars, split the chattels by verbal agreement. The rest (cash, credit, investments) was easy because they had a set value - dividing by 2 is simple math BUT lawyers don't want that - they want billable hours under the mantra of getting the best result for their client. And the stupid and/or greedy clients go right along with it.
 
Bill, I get what you're saying, but my example is, a family vacation 5 years ago. I paid for it in cash. You paid for it on credit, and have just been carrying the debt.

Why should you get to split that cost with your ex, but I have to eat it? You get to split it because you put it on credit? That is the diff?

I totally agree that there are things that are arguable about debt, and if you can show debt was for the benefit of the family, there's discretion built into the system and a judge should see it split fairly.

But the basic system is fair, IMHO. I took on debt in my marriage, it was in my name and as far as I was concerned at the time, I would be paying it off. That doesn't change just because we divorced.
 
Mess said:
Bill, I get what you're saying, but my example is, a family vacation 5 years ago. I paid for it in cash. You paid for it on credit, and have just been carrying the debt.

Why should you get to split that cost with your ex, but I have to eat it? You get to split it because you put it on credit? That is the diff?

I totally agree that there are things that are arguable about debt, and if you can show debt was for the benefit of the family, there's discretion built into the system and a judge should see it split fairly.

But the basic system is fair, IMHO. I took on debt in my marriage, it was in my name and as far as I was concerned at the time, I would be paying it off. That doesn't change just because we divorced.
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Okay, we differ. I don't see the difference between assets and debt. What if you took on an asset, like stock, during the marriage - would you want to keep that too? I don't see the difference.

The concept is that you share all money equally and all things while you are married. Given that, all debt and assets should be split equally. Simple.

But if you are saying that in your divorce you both agreed to the concept that you maintained financial independence during the marriage and want to divide assets and debts that way, that works for me to. It is just not the way my marriage was.

I think the concept of the divorce law is that you split everything 50/50 and that magically does not change simply because a debt happens to be exclusively in one name.

If I had taken some money out of my paycheck and bought stock with it, kept the stock in my name, that would be split equally. If I purchased a cottage during marriage and for convenience it was put in my name, that is split 50/50.

There is no reason that debts should be treated differently. I think that is the law. Also, in my marriage, for 12 years I was the only one with an income, yet it never felt like my money, it felt like family money. So I'm good with the whole concept of splitting everything 50/50, but its opportunistic to claim that some of the debt should not be, simply because of the name on the credit card, or even the reason for the debt. This ONLY makes sense if you treat the assets the same way and do complete accounting of spending during the marriage.
 
bilm: it's one thing to give example but another to be in the situation where you would end up having to pay for debts incured in your name which was as in my case, for my father in law's house. No one predicted a separation/divorce and realized after the fact that I should not have put these expenses on my credit card and did it to help out which was obviously a mistake.

You are saying that no matter what, we should be penalized for our mistakes and pay no matter what?
It turns out, the house was sold for over half a million dollars two years later which again no one predicted would happen.

If the Judge would have agreed with you, I would still be paying for debts, credit card while my ex father in law and ex would be enjoying a debt free house? How fair is this??

Luckily we had a Judge who understood the situation and surely he didn't break the Law by writing a Court Order which states credit cards were not to be payed 50/50. Like I said, every situation is different and have to be looked differently. I understand some lawyers/parties do out of spite as they don't want to pay but that is not everyone.
 
Credit Card Debt

NBDad said:
The TV/Camera's etc...who will keep possession of them? If it's YOU then that part of the CC debt is yours. (You have the asset that going along with the debt).

If it's HER, then she should be paying it off (asset tied to debt). As long as the balances are similar (ie. within 2000 of each other) call it a day, you'll easily spend that in legal fees anyway.

Rent/utils she can pound sand on.
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NBDad: you are correct and exactly what the Judge explained. My ex wanted the lawn tractor on my credit card, then he paid my credit card, same with the expenses for my ex father in law's house. Why should I have to pay for something that I don't own, never used or benefit....I wasn't about to go and start demolishing bricks, dry wall, kitchen cupboard to get money back to pay for my credit card or get something out of it. COMMON SENSE!
bilm: I undertand your point of view but there are special circumstances, situation the Judge look at.
 
TLCRN said:
bilm: it's one thing to give example but another to be in the situation where you would end up having to pay for debts incured in your name which was as in my case, for my father in law's house. No one predicted a separation/divorce and realized after the fact that I should not have put these expenses on my credit card and did it to help out which was obviously a mistake.

You are saying that no matter what, we should be penalized for our mistakes and pay no matter what?
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Ahhh, no I am not saying that. So in your case, you fixed up the father in law's house and expected a return on that investment (how you funded it is not relevant).

That is a separate issue. You are saying your father in law owes you money - that would simply be a marital asset, also to be split.

So if your ex received that asset (the benefit of money spent on the father in laws house), that would be considered, as the judge did.

Divide by 2! Not that hard!
 
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