Suze Orman Advises Woman to Keep Credit Card Debt in Divorce Settlement

Suze Orman advises a woman to keep her $18,000 credit card debt as part of the divorce settlement, despite it being in her name. Orman suggests Kristen prove the debt was used for joint family expenses, and split it accordingly. She also recommends removing her soon-to-be ex-husband as an authorized user and setting aside her $4,000 inheritance until the divorce is finalized.

Financial expert Suze Orman recently advised a woman to keep her $18,000 credit card debt as part of her divorce settlement, despite it being in her name. Orman suggested that the woman, Kristen, prove the debt was used for joint family expenses and split it accordingly. She also recommended removing her soon-to-be ex-husband as an authorized user and setting aside her $4,000 inheritance until the divorce is finalized.

Kristen, a special education teacher and mother of two teenagers, had discovered the debt during her divorce. The card was in her name, but she believed her husband had been handling the payments. Orman acknowledged the situation's complexity and advised Kristen to keep the debt in the divorce settlement. "If it was used for family expenses and she can prove it, they may make it half his as well," Orman explained [1].

Orman also recommended taking practical steps to protect Kristen's assets. She advised removing her soon-to-be ex-husband as an authorized user on the credit card and putting the $4,000 inheritance into a separate interest-earning account under Kristen's name.

How credit card debt is handled in divorce varies by state. In community property states like California and Texas, debts incurred during the marriage are typically shared equally. In common-law states, the person whose name is on the account is generally responsible, though divorce courts can assign responsibility differently [2].

Orman's advice underscores the importance of protecting assets and not acting too quickly during a divorce. It's crucial to consider all factors and seek legal advice to ensure a fair settlement.

References:
[1] https://www.benzinga.com/personal-finance/management/25/08/46973822/i-would-keep-the-credit-card-debt-there-and-make-it-part-of-the-divorce-suze-orman-advises-woman-on-handling-her-shared-18k-debt
[2] https://www.reddit.com/r/AskALawyer/comments/1mgodoo/headed_to_divorce_mi_usa_wife_says_my_credit_card/