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Credit card debt and bankruptcy

When a couple in Arizona decides to end their marriage, they have to make a number of difficult decisions including how to split the property, time with children and in some instances, spousal maintenance. But one thing they may not keep in mind is their credit card debt, and this is a very important liability to keep in mind because Arizona is a community property state.

What does community property mean? In a community property state, when a couple divorces, their credit card debt will be considered the responsibility of both parties, whether or not both parties actually made the purchase. This means that if one spouse secretly charged the credit card for something, the other spouse will still be liable for half the amount. This isn't just the case for a joint account-even if a spouse has a credit card in their own name and makes the purchases for their own sake, the other spouse-whose name is not even on the card-will still be liable for half.

Dealing with credit card debt, especially if it is not one's own, in the aftermath of a divorce can be very difficult. Following a divorce, expenses go up anyway as each party is no longer splitting the cost of living. Credit card debt simply adds to the financial challenges. However, there is one option available to people struggling with debt, and that is to declare personal bankruptcy, either Chapter 7 or 13, depending on the individual's income level.

Bankruptcy wipes out most debt, including credit card debt, and allows filers to basically begin their financial life afresh. Just as they are rebuilding their personal life, they may want to consider rebuilding their financial one.

Source: Daily Finance, "Divorce and Debt: What you owe and what you don't," Geoff Williams, Feb. 25, 2011,