Too many clients come to see me with a list of debts, rather than assets, that must be divided. And while the Virginia court can split your bills into "his" and "hers" to your creditors those bills are still "theirs." How do you protect yourself?
Ideally, of course, don't get into debt in the first place.
In particular:
- Don't give anyone a general power of attorney. A special power of attorney will allow your spouse to deposit tax refund and other checks to your joint account. A general power will let that person apply for thousands of dollars in credit cards, for which you will get the bills.
- Don't apply for joint credit cards. Sometimes -- for example, when you're buying a car or a house -- you can't avoid going into debt together. Otherwise, apply for credit only in your own name. That way, only you can trash your credit rating.
If you're in debt already, here are some ways to "cover your assets":
- If there's a zero balance on an account, CLOSE IT. Usually either spouse can do this. It helps if you can return both cards, but it isn't necessary. Send the credit card issuer a letter by certified mail, return receipt requested, and ask for written confirmation. (Keep a copy of the letter you sent, in case you don't get confirmation).
- Most companies won't close an account if there's an outstanding balance. But many will "deactivate" an account, so that you can't use it while the balance is being paid off.
- You may have seen announcements in the classified section of the newspaper by people who say they will no longer be responsible for someone else's debts. This may be effective if you have given someone a general power of attorney and he or she won't give it back to you.
- "Search and destroy." Don't feel guilty about going through your husband's wallet or your wife's handbag and getting rid of every credit card for which you could be held responsible. (But don't run up big bills in the other person's name, either.)
- If you're getting divorced and the other person is supposed to pay the marital bills, remember that if they don't pay, you do. If you think your ex might use, say, an overseas transfer or a bankruptcy as a way of dodging his or her responsibility, talk to your attorney. It may be possible to draft your separation agreement so that you can ask for spousal support -- or more support -- if you ever become liable for those bills.