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Understanding Your Exposure During Divorce

What about the bills that must be paid? Ingrid took the new car with her; Harold had to pay the finance company when it was repossessed. She didn’t make the payments, even though he gave her money for them.

What about the new liabilities that your spouse has the power to create? If you’re not separated, all the bills you and your spouse run up belong to both of you. If you are separated, what about joint credit cards or the overdraft protection on the joint checking account? You’re still liable to the lender on accounts you’ve opened.

How can you protect yourself? In Denise’s case, Bart was ordered not to charge anything to the joint accounts unless necessary to preserve an asset. He also had to provide an accounting to Denise, justifying all the expenditures that he made.

Note that there may an advantage in this joint liability. June used her credit card to survive until she got a court order after Mark refused to help either her or the children. Credit card companies don’t care about your marital difficulties. If they’ve got your signature on the application, you’ll have to work out the payment details with your spouse until you close that account. In June’s case, because Mark had an obligation equal to that of June to support the children, and also to pay joint debts, the credit card charges were found to be joint debts. Note that you are also liable to anyone who provides your dependents with the necessities of life.

What about your medical insurance when it is provided through your spouse’s employer to you as a dependent? What happens when your spouse cancels your coverage because he decides he’s running short of cash each month trying to maintain two households, or simply trying to live that long-awaited lifestyle? You have no insurance, that’s what happens, when he drops the dependents deduction to increase his take-home pay.

Karen was incurring tens of thousands of dollars in medical bills, yet Paul had to be ordered to keep the coverage in effect. No insurance company would write medical insurance for Karen due to her catastrophic illness. Paul threatened to drop it, however, if she didn’t meet one of his demands.