The breakdown of a marriage or civil partnership can often bring with it some nasty surprises. This applies equally to your finances as it does to other aspects of your relationship.
When spouses are disclosing assets and liabilities with a view to working out who will retain what, secret credit card debts can all too often be the source of a lot of upset and distress. In the current financial climate as everyone is experiencing the implications of the coronavirus pandemic, debt and the use of credit credits is likely to increase.
Secret Credit Card Debt
Fear not, if the credit card is in your partner’s name you will not have the bank chasing you for any outstanding payments. This is because the contract is only between your spouse and the bank and does not involve you. You should however be wary of adding any additional card holders to your credit card account as it will only ever be the main card holder liable to make repayments, irrespective of how the money was spent.
Despite the above, the principles of divorce law in Scotland may render credit card debt relevant for the purpose of financial provision on divorce.
In short, matrimonial property is any asset or liability accrued by either partner between the date of marriage and the date of separation. There are exceptions to this rule:
- Any inheritance you have received is not matrimonial property;
- Any gift you have received from a third party is not matrimonial property; and
- Heritable property purchased by either party prior to the date of marriage in contemplation of it being a family home is matrimonial property.
If this is considered in the context of secret credit card debt accrued by your partner without your knowledge if it was accumulated after the date of your marriage but before the date of your separation, it will be included within the matrimonial pot. In other words, it will be considered when you and your partner are dividing your assets and liabilities on divorce.
Division of Matrimonial Property
The division of matrimonial property should always be based on the principle of fairness. In the first instance, equal sharing of both assets and liabilities is presumed to be fair. Put another way, if the credit card debt was accrued over the course of your marriage the primary position is that it will ‘belong’ equally to you and your partner and it will be reflected in your share of the assets and liabilities on divorce.
However, it is recognised in divorce law in Scotland that equal sharing does not always equate to fairness. The legislation makes provision for ‘special circumstances’ which enables either party to put forward arguments as to why there should not be an equal division. In the context of secret credit card debt, you should consider the circumstances in which the debt was accrued and determine the reasons why an unequal division would be justified. A common argument relied upon is that the ‘innocent’ partner was unaware of any such debt and derived no benefit from the spending whilst the ‘guilty’ party accrued the debt in pursuit of their extravagant lifestyle.
Special Circumstance Arguments
It is important to note that any special circumstance argument you may have does not remove the debt from the matrimonial pot (unlike the exceptions, above, as to what falls within the definition of matrimonial property). Special circumstance arguments are a matter for negotiation or the court’s discretion.
If you have any queries regarding the division of matrimonial property, please get in touch with our specialist family law team.