For almost everyone, divorce is a time of financial stress and uncertainty. You may be worried about needing to pay child support or spousal maintenance (or whether you will receive adequate support if you need it). Whether paying or receiving support, you are probably concerned about what assets you will receive in the divorce, and whether you will be able to meet your expenses without the help or income of your partner.
There’s no question about it: divorce disrupts almost everything about your life, including your finances. And while you’re trying to figure out what the “new normal” is, much of life goes on as usual—including the arrival of bills in the mail, and the need to pay them.
Whether you and your estranged spouse are trying to save money by living under the same roof during a divorce, or one of you is already settled in a new place, you need to figure out who will pay which bills during the divorce—and what will happen if one of you doesn’t live up to their obligations.
Maintaining a good credit score is a priority, so don’t let yours take a hit because you don’t think you should “have to” pay a certain bill. As a general rule, if your name is on a bill, you should pay it, to avoid collections or other negative consequences. It may feel satisfying in the moment to have the utilities in the house where your spouse still lives shut off for nonpayment. It won’t feel so good when you later apply for a loan and discover your credit took a hit because you were petty.
One common bone of contention is credit card bills. Often, one spouse is the primary cardholder, with the other being an authorized user on the account. This can add up to trouble for the primary cardholder if the authorized user runs up charges and decides not to pay them. In most states, including Minnesota, courts will hold you responsible for debt that is in your name. If your spouse is an authorized user on your account, you may be able to remove their authorization, preventing them from making any further charges.
There is a difference between a “joint credit card account” and an account with an authorized user. If a credit card is in both your name and that of your spouse, a true joint account, the company will hold you both liable, meaning it will be able to attempt to collect the debt from either of you. It may make sense to close any shared credit card accounts if possible. In any case, keep making at least the minimum payments during the divorce process to avoid damaging your credit. If you decide to open a separate bank account or credit card, be aware that you will likely have to disclose that during the divorce process.
If you are paying bills during your divorce, it is more important than ever to document that you have done so. The court may ask for proof of expenses or evidence of who has paid what bills. You want to be ready to provide that information.
What if your big worry is that you won’t be able to pay your bills during the divorce? For a lot of stay-at-home parents, and people who earn much less than their spouse, this is a real and legitimate concern. Don’t be embarrassed to talk to your divorce attorney about this issue. Your attorney is familiar with the problem of divorcing spouses who struggle with finances, and she can help you get relief.
If your attorney knows you will struggle to pay your bills during the divorce process, she can pursue temporary spousal maintenance on your behalf while the divorce is pending. Temporary spousal maintenance does not guarantee you will receive spousal maintenance (alimony) in your divorce decree, but it may help—and it will help reduce your financial stress during the divorce. Your attorney may also be able to get an order requiring your spouse to keep paying certain bills during the divorce, such as the mortgage on the marital home.
If you have questions about what bills you should be paying in divorce, how to negotiate bill-paying with a spouse, or financial questions about divorce in general, we invite you to contact Mundahl Law to schedule a consultation.