What happens to frequent flyer miles in a divorce?

Credit card debt is often a significant concern for Ontario couples who are considering to end their marriages. If the couple never addressed this in a prenuptial agreement, it could cause contention in a divorce. A couple may agree to divide credit card debt equally, or a court may decide who must pay which card. However, the credit card companies have no interest in the couple’s marital status, and despite agreements or court orders, those who are signatories on the accounts will remain legally responsible for payment.

The situation can cause problems if one of the former spouses fails to honor the agreement or court order because the lender can then pursue the unpaid amounts from the other party. This can also have an adverse impact on that person’s credit score. In some cases, the court may decide to order a higher earning spouse to take responsibility for credit card debt and then allocate a larger portion of assets to that person to make up for the losses.

In addition, frequent flyer miles and/or reward points that accumulated over the period of the marriage are assets that could be quite valuable. Although both spouses will typically have a right to half of such rewards, most credit card companies do not allow the transfer of miles or points. If one spouse gets to keep those rewards, the other spouse usually receives other assets of similar value. If the parties find it impossible to reach a mutual agreement, the court may decide for them.

Ontario couples who plan to get married may want to discuss the drafting of a prenuptial agreement that will include all eventualities with an experienced family law lawyer. In either event, any person who is considering a divorce may benefit from the advice and guidance of a lawyer who can provide valuable input and arrange mediation to resolve contentious issues — if necessary. With skilled guidance, both parties may enter the new chapters in their lives without baggage from the previous chapter.