How to prepare for divorce tip #9: Credit Cards and Lines of Credit

This is the ninth in a series of tips about what you should do to prepare for a divorce or separation.  I believe strongly in the collaborative divorce process, but that doesn’t mean that you shouldn’t prepare for the worst.  I was a boy scout, and our motto was “be prepared”.  If you are considering separating from your spouse, no matter how amicable the divorce may end up becoming, I strongly encourage you to protect yourself – which is what all of these divorce tips are about.  Now, for today’s tip – don’t neglect the credit cards and lines of credit.

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 run up charges on all the credit cards.  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 to joint cards.

You will want to consider canceling such joint accounts or at least reducing the spending limits.  Be aware that this may have an adverse effect on your credit score.  However, this temporary inconvenience will be more than offset by the peace-of-mind you will have by knowing that your spouse cannot run up credit in your name.  If your spouse is an authorized user on charge cards in your name, see what steps the credit card companies require to remove them as an authorized user, and do so as quickly as possible.

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.

The information in this post was prepared in part with information originally posted on the Alabama Family Law Blog.