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The key difference between account holders and authorized users

On Behalf of | Jun 12, 2023 | Firm News

In a divorce, you have to divide assets and debts. If you and your spouse still owe money on a car that you purchased together, for instance, that vehicle may be both a debt and an asset. You have to decide how to deal with it when dividing everything from the marriage. People often focus only on the assets and forget that debts also have to be split up.

But what if your spouse has credit card debt? Maybe they had poor spending habits, and that’s a big reason why you asked for a divorce in the first place. They had huge monthly bills and outstanding balances that were not sustainable. Are you still going to be responsible for paying off that debt after you split up?

Joint account holders

In many cases, married couples will be joint account holders. They both own the account. They each get their own card, but charging anything puts it into the same general pool. They are both liable for the debt. Your spouse may be the one who made that specific purchase, but if it’s on a joint account, you still have to divide the totals.

Authorized users

The difference comes if you are an authorized user and not a joint account holder. This would mean that your spouse is the only one responsible for their own credit card account. They have authorized you to use their card, but they are still liable for the payments. The account is not yours. 

This means that the answer is going to be different in every situation, regarding how these debts have to be divided. But you can see how complicated it is and why it’s important to understand your legal options.