Divorce Preparation: Step 8 – Address the Credit Accounts
We pick up with Step 8 in our series on practical steps to take when a divorce is imminent. Step 8 is Assess how to handle the credit accounts.
If a divorce is imminent you do not want to be liable on any accounts on which your spouse has charging privileges. It is not unheard of for an angry spouse, upon learning of a divorce, to go on a shopping spree. Likewise, some lawyers may advise their clients to take out cash advances on joint cards to provide a cushion while the divorce is pending or to charge a large amount in lawyer’s fees on to joint cards.
You will want to consider canceling such joint accounts or at least reducing the spending limits. If they are an authorized user on charge cards in your name, see what steps the credit card companies require to remove them as an authorized user.
Also consider home equity lines of credit. You may need to consider whether you should close it or restrict access pending the resolution of the divorce.
Whatever you do, do not neglect thinking seriously about how to handle this issue, and discuss it with your lawyer before making a final decision.