Beware of Joint Finances During Divorce

January 06, 2015  |   Posted by :   |   Blog

Joint finances can be problematic, especially if you’re going through a separation and suddenly discover that your partner has been spending more than you thought, or has run up debts on a shared account. Unfortunately, it is all too common for the divorce process to unearth the darker side of joint finances, causing a knock-on effect on the cost of separation and each partner’s future financial situation.

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According to the Consumer Credit Counselling Service (CCCS), it’s not uncommon to see cases involving upwards of £24,000 in debt that one partner has hidden from the other. This kind of situation may arise in several different ways when one member of a couple runs up undisclosed debts, such as:

  • Using up joint savings
  • Spending money set aside for the mortgage
  • Running up credit card debts
  • Taking out loans against the mortgage
  • Deferring salary or hiding bonuses
  • Hiding profits in a business

The legal reality of joint accounts is that one partner can end up being saddled with enormous debts incurred by the other. It’s easy to add a second name to a credit card, but any outstanding balance run up by the additional user will ultimately be the responsibility of the card holder. ‘Joint and several liability’ terms mean that if one member is unable (or refuses) to pay their share, the other could be liable for the full amount. In a stalemate situation, lenders will pursue the partner who is in a better position to pay the balance, regardless of whether they are responsible for creating the debt. Not only do these situations cause huge amounts of distress and financial difficulty, they can also leave you with a poor credit rating and complicate issues during separation. Recent statistics on separation have shown that many unhappy couples simply cannot afford to enter into a divorce until they have sold their property or saved up enough for court fees due to their debts situation.

To avoid getting stung by joint finances when you get divorced there are a few safeguards you can put in place to protect yourself:

  • Keep your own accounts where possible, reserving any joint accounts for specific bills that you can keep track of easily;
  • Mortgage and joint accounts can be frozen if you’re anxious about your partner withdrawing money during separation;
  • Take responsibility for your finances and keep on top of your savings accounts, credit card balance and payments. If your partner refuses to give you access to joint bank details, it may mean they’re hiding something;
  • Consult a solicitor as early as possible after you’ve made the decision to separate and provide them with information about any individual and joint accounts or savings in your name;
  • Pre-nuptial and post-nuptial agreements can protect you from future financial problems during divorce by establishing your assets and making decisions on how they should be fairly divided in the case of separation.

If you’re worried about joint finances as you enter into the separation process, the experienced family lawyers at Frances Lindsay & Co can offer advice and practical support. We can help you negotiate financial disputes, family issues, and the division of property in a way that takes your unique situation into account. Let us take the weight off your shoulders and resolve your relationship disputes with minimal damage to your finances – visit for more information.

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