Division of assets and debts is complicated with credit cards


Credit cards are a useful part of one's finances. They allow one to build credit, offer rewards and provide security for emergencies. Mostly, they establish a way for people in Nevada to purchase items that may be too expensive to manage when using cash. These are also the factors that come into play when a couple divorces. Credit cards may become a source of contention when it comes to the division of assets and debts.

In Nevada, the court divides marital assets and debts equally. This means that most assets or debts acquired during the time a couple was married are community property and are divided 50/50 no matter which spouse was responsible for the buying or spending. In addition to dividing debt, the court may find it necessary to divide any rewards or points the credit holder earned. This could mean a judge may need to assess the potential value of the points or re-balance the assets if the points cannot be transferred.

Sometimes after the debt has been divided, one spouse may refuse to make payments on his or her share of the bills. When this happens, the other spouse may find himself or herself in trouble with creditors if the account was jointly owned. To avoid this, it is recommended that spouses retain copies of divorce rulings to submit to creditors. This may prevent negative ratings on one's credit report.

Some financial advisors believe that the best way to avoid the entanglement of community debt is to keep separate bank accounts and credit cards. This will make it easier to divide them if a divorce becomes imminent. Having an attorney to negotiate the division of assets and debts is also a proven way to increase the likelihood of receiving a fair settlement.

Source: NASDAQ.com, "Credit Cards And Divorce: What You Should Know", Dec. 2, 2016

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