Credit card debts and marital strife

I am never surprised when clients in divorce cases I handle have incredible credit card debts. Marital stress leading to divorce often results from financial stress. It’s important for my clients to know more about their credit card debt and to see how they might avoid problems in the future. An article from the March 10, 2007 Washington Post makes clear how credit card companies often have unfair policies that compound credit card debt in ways that consumers do not predict or expect.

According to the Washington Post, credit card companies frequently don't play fair even when a consumer does everything according to their terms. An industry practice called "universal default" allows the credit card issuer the right to hike the consumer’s interest rate if he’s late or overextended on another credit account. The article also explains the practice of two-cycle billing.

Recently a Senate permanent subcommittee on investigations took a look at certain credit card industry practices resulting in outrageous fees and interest rates for consumers. One witness testified about how a $3,200 charged resulted in late fees and interest rates that compounded his bill so that the consumer, after making $6,300 in payments since 2001, still owed $4,400 as of February 2007. To read the entire article, click here.

To visit Jeanne Hannah's website for more information, click here.

Comments

[Barry Chapman]

I am suffering from this problem, now. My wife, with bi-polar disorder, has accumulated over $8,000 in credit card debt in the last six months. I have consulted with lawyers who seem to be split on what action I should take. Some recommend guardianship while others do not want to touch this situation with a "ten foot pole". Even those recommending quardianship, i.e. she cannot make contracts in her own name, warn me that my spouse can block this action by convincing a judge that there is nothing wrong with her. She believes that there is nothing wrong with her but she will not stop accumulating credit card debt. Even mental health professionals have told her to stop this practice but they have also told me that a judge must approve me controlling how she spends money. If I divorce my spouse, I must still pay her expenses, because she cannot work and she has not paid enough into Social Security to collect benefits.

[Nisa Curtis-Quick]

I am currently having a HUGE problem. My husband and I are in the process of divorce. We have been married less then a year and and have two small children. I had no idea about the credit card debt even though he had me listed as an authorized user. I had my name taken off the account shortly after he left, after finding out by having a my credit report run. What a shock! My husband (soon ex) is insistant that I am responsible for half of the debt. I never used the cards or was aware of the balance. Why should I be held responsible for something I never used and that the credit card company has said that I am not liable for?