Some of the most common and emotionally charged financial concerns in divorce involve joint accounts, credit cards, and debt. These shared obligations can quickly become a source of confusion and long-term financial stress if not handled carefully. As a Certified Divorce Financial Analyst (CDFA), I often help clients strategically navigate and provide clarity in these divorce situations.
In this post, I discuss how you could approach these assets and liabilities as you move through divorce, and how you might protect your financial future in the process.
Joint accounts offer simplicity and transparency during a marriage. Regardless of which spouse contributes more income, both parties typically have equal access and ownership. That equality, however, becomes complicated once divorce proceedings begin.
Courts often treat joint account balances as marital property, and unilateral withdrawals, especially large or unexplained ones, can reflect poorly on the withdrawing party. If you suspect your spouse may misuse joint funds, work with your attorney to freeze or monitor the accounts. At a minimum, start keeping detailed records of all deposits, withdrawals, and transfers, especially if any funds are used for separate obligations like legal retainers or housing costs.
Opening your own individual checking account early in the process is a smart, proactive move. Eventually, you’ll need it anyway for receiving income and managing post-divorce expenses. It’s also a step toward regaining a sense of financial independence.
Clear communication during this time is critical. If you anticipate a change in income or household bills, make your spouse aware of it, and ideally document the agreement in writing. Many divorcing couples continue using their joint accounts during the divorce process, especially to pay ongoing household expenses, as long as both parties cooperate and neither is at risk of financial harm.
Shared credit cards can be trickier. Even if your divorce decree states that your spouse is responsible for the joint credit card, the credit card company doesn’t care. If your name is on the account, you're still legally responsible.
Therefore, consider addressing joint credit cards more aggressively in your proceedings and decree. Failure by either party to make payments can hurt both credit scores and that is something you’ll want to avoid, especially if you plan to refinance, buy a home, or secure a car loan, post-divorce. Try to keep your credit utilization below 50% of the card’s limit, and pay down balances where possible.
Ideally, joint credit cards should be paid off and closed along with finalizing your divorce. If closing the account immediately isn’t an option, request that the account be frozen to prevent further charges and ask the creditor for written confirmation. You might also consider transferring joint balances to individual cards, so responsibility is clearly divided. These steps can, and should, be incorporated into your divorce decree.
Mortgages, car loans, and personal loans are often co-signed, meaning both spouses are equally liable, regardless of what the divorce decree says. If one spouse is keeping the home or the vehicle, the loan should ideally be refinanced in that person's name.
Refinancing or completing a formal loan assumption removes the non-responsible spouse from the obligation and protects their credit and borrowing power. If refinancing isn’t possible, selling the asset and dividing the proceeds may be the cleanest option. Be sure to weigh tax implications before finalizing any decisions.
For assets that one spouse retains (like the marital home), make sure there’s a written agreement regarding who will make payments and when. Structure and clarity help prevent confusion, missed payments, or future litigation.
Not all debt is created equal, or truly shared. Review your credit reports and account statements closely. A debt is typically considered joint if both names appear on the statement or both parties are listed on the credit report. In contrast, if you’re just an “authorized user,” you can usually be removed without affecting the original account holder.
That said, don’t rush to close accounts if you need access to credit soon (for example, to refinance a home). Closing accounts can temporarily lower your credit score, which could complicate your financial goals. However, if there’s risk of misuse, closing accounts may still be the best choice. Consider making at least the minimum payments on all debts during the divorce, even if a particular bill isn’t technically yours.
Debt division in divorce varies by state. In general, courts look at factors such as:
A CDFA can help you model different division scenarios to understand how they’ll affect your long-term financial health.
During or even prior to your divorce negotiations, take these important steps to understand more about your joint account, debt, and credit situation:
Once the divorce is finalized, you usually want to tie up financial loose ends promptly by:
The more proactive and thorough you are during the divorce, the smoother your post-divorce financial life will be.
Dividing joint accounts, credit cards, and debt is rarely straightforward, but with the right strategy and support, it doesn’t have to derail your financial future. Whether you're in the early stages of separation or wrapping up your settlement, working with a CDFA can help you understand the real impact of each financial decision and lay the groundwork for lasting stability. Contact me to learn how I can help.