No divorce is easy. In some instances, however, a soon-to-be ex-spouse, whether because of a fear of future finances, revenge, or selfishness, will attempt to hide assets, run up credit card debt or otherwise use unethical behavior to improve his or her own finances. Spotting deceitful financial behavior early and protecting yourself can be key to easing the financial transition to single life.
Nine states, including New Mexico, are community property states, meaning that property a couple obtains during their marriage is presumed to be owned jointly by both spouses, unless it was a gift or inheritance by one spouse. That is why some dishonest spouses attempt to hide assets during property division in a New Mexico divorce. Common illegal and unscrupulous financial tricks to hide assets include:
- Hiding financial statements
- Overpaying debts or giving out loans to family or friends, only to get the money back once the divorce is final
- Hiding assets in a business or collectible
- Deferring salary or bonuses
If your spouse is suddenly defensive about finances or is exhibiting unusual financial behavior, it may be a sign he or she is hiding assets. At that point it is important to work with your divorce lawyer to keep all of the property and assets to which you are entitled intact throughout the divorce.
Running Up Credit
One spouse may run up credit on joint cards before the divorce is final, since both spouses will be liable for the debt even after divorce, regardless of who made the purchases. When entering divorce proceedings you should immediately cancel joint credit cards and begin to establish separate finances such as creating a separate checking account at a bank unaffiliated with you and your spouse’s joint account. You should also run a credit check to ensure you are aware of all debts in your name.
Married couples tend to have long-standing plans, agreements and promises. When the marriage is about to end, however, those unwritten promises cannot be relied upon. Even if well-intentioned, an unwritten agreement may change with changes in circumstance, which is why every agreement needs to be a valid legal contract. Paying the mortgage, taking care of a child’s educational needs and other important issues need to be spelled out in the separation agreement or divorce decree.
If you are contemplating divorce, contact an experienced divorce lawyer to explore your legal and financial options moving forward.