How to Protect Your Finances in An Illinois Divorce
April 1, 2019
Divorce has the potential to devastate your personal finances. If you have already filed for divorce or if you and your spouse are nearing a divorce, there are some important steps to take to protect your finances. Here is a quick look at how to safeguard everything you have worked so hard to acquire.
The First Step to A Financially Successful Divorce: Move Your Money
Your hard-earned savings, investments and assets are on the line when you divorce. If you are planning on divorcing your spouse, the first step to protecting your financial well-being is shifting half your money in checking and savings accounts to a separate account in a completely different bank. Do not open a second account at the same bank where you currently have an account. Set up a new account with a separate bank and deposit exactly half your cash in this account as soon as possible.
The Next Steps for A Financially Successful Divorce
Once half your cash is deposited in a brand-new checking or savings account with a different bank, it is time to contact your employer's human resources or payroll department. Request that your direct deposit payment be transmitted directly to the new bank account you established. If your human resources department is flexible, consider having them deposit half of your weekly paycheck into the new account and half into the old account.
Expect the Worst from Your Former Spouse
Divorces have the potential to become bitter conflicts. Do not assume your former significant other will be civil throughout this process. After all, money is on the line and people act differently when their financial well-being is at stake. Do not put it past your spouse to use your ATM card behind your back. Select a new ATM PIN number as soon as you make the decision to divorce.
Change your online banking password as well. Altering this password ensures your spouse will not be able to log into your online bank account, view your account balance and/or transfer funds out of your name. Furthermore, you should also change your computer passwords. If your spouse knows your laptop, desktop or tablet password, select a new one so he or she cannot snoop on your personal finances and business.
About Those Credit Cards…
Some spouses are authorized to use credit cards that are individually held. If your spouse is an authorized user on any line of credit, reach out to the lending party to take his or her name off the account. The same goes for jointly held credit cards in both names. Ideally, the lender will split these jointly held credit lines so you are not liable for your spouse's purchases. If the lending party cannot split the account, request that they remove your spouse's name or your own name. If this request is denied, tell the lender you are getting divorced and would like to freeze the account. Do not accept “no” for an answer. Request to speak with a supervisor if your request is denied. Ask the supervisor to reduce the credit limit to a mere couple hundred dollars. This way, if your wife or husband goes on a shopping spree, you won't be on the hook for the resulting bill.
Though the actions above might seem like extreme measures, they are absolutely necessary. Many hardworking, honest people have been burned by scornful ex-wives and ex-husbands in the past. In fact, some people are so angered by their spouse's insistence on divorce that they go as far as raiding bank accounts, spending wildly with credit cards and causing all sorts of other havoc. You should not have to deal with this financial drama in the midst of an already contentious divorce. Be smart, don't cut them off completely, but lock things down.