Separating finances in a divorce

Couples in New York who are getting a divorce might need to separate their finances. This may require cooperation with a spouse. For accounts that are in both names, if one spouse falls behind on the bill, the other spouse’s credit may be hurt.

The first step is to close any accounts that are jointly held. If a person has a credit card with the spouse listed as an authorized user, the spouse should be removed. Otherwise, the spouse could run up credit card debt without being responsible for it.

Joint debts will need to be paid, but they are usually split between the couple. A person should be careful not to pay a greater share of the debt if part of it will be the other’s responsibility. However, there are cases in which a person might want to pay toward a debt in order to maintain a good credit rating even if the other does not pay.

People need to begin building their own credit histories. This may involve opening a new individual account as well as applying for credit cards or other lines of credit. However, it is important to pay these accounts off and avoid getting into debt. After the divorce, people may want to keep an eye on their credit reports to make sure the former spouse’s activity does not appear there.

Finances are not the only thing that must be divided in a divorce. Assets must be divided as well, and in a high-asset divorce, this may be particularly complicated. A couple may have complex investments, real estate in other states or countries and valuable collections. In some cases, one person might be concerned that the other spouse is hiding assets. An attorney might be able to recommend some specific strategies whether a couple is going through negotiations or litigation.