Pre-Divorce Finances: Cancel joint credit accounts and use marital money to set priorities

Posted on Jan 8, 2013 by Katie Carter

If you’re considering divorce, you’re probably intimidated by cost. We’ve all heard horror stories about women ruined by divorce—but, with careful planning, you don’t have to be one of them. It’s true, divorce is difficult, but that’s no reason that you should stay in an unsatisfying, unfulfilling, or abusive relationship. As long as you take a little bit of time to plan for the months ahead, you should be able to find ways to make ends meet (without hanging him out to dry).

The first thing you should do is remove your name from or cancel any joint credit cards. If you need a credit card, open one up in your name and allow only one authorized user—yourself. That way, no matter what financial decisions the two of you make, no one beyond the actual purchaser is obligated. I’ve seen cases where hubby goes out and buys expensive things, thinking that wife will later be obligated to pay half. Usually, judges aren’t fooled by these tactics and can order that only one person is responsible for the debt—but that doesn’t mean that the credit card company can’t hold you responsible in the mean time. It’s not worth the fight, anyway. Let him be responsible for the things he buys on credit, and you should likewise be responsible for your purchases. Vindictive spending won’t help either of you, anyway.

Remember that judges have seen it all before, and they won’t be impressed by either of you making rash or impulsive decisions in an attempt to punish the other. Marital debt can be divided, but the judge has the authority to deem something you’ve purchased as your separate debt, too—so be careful. It’s far better to go ahead and separate your finances, so that you know ahead of time who will be responsible for what. It’s not smart to spend money assuming that the judge will just divide it.

Separating credit accounts can ultimately protect you both.

Just because you’re thinking of getting a divorce doesn’t mean you have to resign yourself to going broke, too. There are a lot of choices you can make at the outset that will protect your family’s finances now and in the future. Remember that you will likely have less after your divorce than you did before it—because the judge can only divide what you already have between the two of you, and that’s before you pay an attorney.

It’s a good idea to use joint money, before you separate, to make necessary repairs to your car and the home. If you have children, it’s not a bad idea to buy them some shoes or clothes to help see them through their next growth spurt. It’s better to do these things now than to argue about who will pay for what later on.

Remember, too, that it’s possible that the marital home will have to be put on the market, depending on your circumstances. Many separation agreements go into elaborate detail about how home repairs will be split among the parties to prepare the home for sale. In the event that you know of some repairs that will likely have to be completed prior to selling the home, it’s not a bad idea to move ahead with initiating these repairs while you still have access to the joint money. It’s in everyone’s best interest to take care of the assets now, rather than fight about them a few months down the road.

It may seem like a bad time to spend the extra money, but it will help make things run more smoothly once the process is underway. There will be fewer things to argue about, and you won’t find yourself totally strapped for cash if you need four new tires right after the entry of the final divorce decree. Judges like to enforce the status quo—so if you need to get braces on one of your kids, or if you’d like to go back to school, there’s really no time like the present. Set up your priorities so that the judge can see what needs to continue on after your divorce.