Coming to the realization that your marriage is not going to work out can leave you feeling scared and uncertain. The reassurance of a joint bank account during this tumultuous time might keep you from wanting to sever that connection right away.
However, maintaining joint ownership of finances during your divorce could greatly increase your risk of financial loss. Canceling joint accounts is a great first step toward independence and can help you protect yourself.
Avoid costly implications
Given the intensity of many divorce proceedings, it is not unheard of for one spouse to go on a spending frenzy. If your significant other goes into a panic and starts hoarding assets or spending all the money, you could have nothing left.
Closing joint accounts immediately can prevent either party from collecting assets without the intervention of the courts. This may remove concerns about unauthorized spending altogether. In preparation for a divorce, find creative ways to make extra money and save it in a personal account. This way you will have some financial protection once the divorce begins.
Prevent credit damage
If your spouse spends frivolously and accumulates irreconcilable debts tied to a joint account, your name and credit could take a hit. According to Psychology Today, during divorce, you should also remove your spouse as a secondary cardholder on any credit cards you own. Eliminating opportunities for your partner to cause damage to your credit can prevent long-term trouble for you.
As your divorce becomes a thing of the past, find ways to rebuild your credit and reestablish your financial foundation. Proactive effort can significantly reduce the repercussions of your split on your future.