If your spouse stops making minimum payments on his credit card, his credit score will suffer as the account becomes further delinquent and is eventually charged off by the bank that issued the credit card. If you are not listed on the credit card, the lack of payment should not have an impact on your credit score. However, you could be affected if the bank attempts to collect on the debt by placing liens against property you and your spouse hold together.
Credit Impacts for Spouse's Nonpayment
When two people marry, they hold separate credit histories, based on their past behavior. Credit scores are affected by a person's history of paying on time (or paying late), the amount of credit and number of accounts currently outstanding. Each person will continue to have a separate credit score, but if a couple co-signs on a loan (anything from a credit card to a car loan to a mortgage), all activity on the co-signed loans will affect the credit score of both people.
Joint Account
If this credit card holds the name of both you and your spouse, it will have a significant impact on your own credit history and credit score. The nonpayments by your spouse will affect you because your name is listed on the loan. Because of this impact, nonpayment should be avoided if at all possible.
Separate Account
If the credit card account does not carry your name, there may not be an immediate impact on your credit score. However, the damage done to your spouse's score could affect you in the future. Whenever a couple attempts to get a joint loan, the credit scores and histories of both people are considered. The lowered credit score of your spouse could lead to a higher interest rate on the loan or alter the amount you are able to borrow.
Account Closure
After your spouse misses a payment on the credit card's loan balance, the account will generally become delinquent when payment is more than 30 days overdue, although each bank has its own specific time line. If failures to make payment continue, the bank will eventually "write off" the debt, assuming no further payments will come. The account will also be closed and your spouse will no longer be able to use the credit card.
Liens for Credit Card Debt
Before a credit card lender can place liens or make other attempts to collect debt, the company must file a lawsuit against your spouse in court. Your spouse will generally have 30 days to answer the suit and admit or deny certain information. No liens can be placed against your spouse's property or any joint property until the company has received a judgment. It is important to respond to any lawsuit, since failure to do so could result in a default judgment, which could lead to your spouse's paycheck being garnished or liens being placed on his property or property you own jointly.
Liens
A lien is a legal claim by a creditor, in this case the bank issuing the credit card. The claim can be placed with a debtor's agreement or through a court judgment. The lien is intended to help the creditor recoup the initial loan.
Community Property States
According to the IRS, several U.S. states have community property laws: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Income earned by one spouse while living in these states is considered the property of both spouses. Property owned or purchased by one spouse in the marriage while living in these states is the property of both spouses. This means a lender or creditor may be able to seek liens on your paycheck, even if the debts from an unpaid credit card were accumulated by your spouse.
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