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What to Do If Your Spouse Overspends from Joint Accounts during Divorce

If one spouse goes wild with marital funds before a divorce case is finalized, they could find themselves in hot water. Courts do not tend to look favorably upon spouses who attempt to deplete marital assets to secure more favorable terms in a divorce settlement. If a court finds that one spouse intentionally wasted or misused marital assets, they may choose to award a greater share to their former spouse in the divorce proceedings.

To prevent this from happening, some couples choose to sign a prenuptial agreement before getting married. This type of agreement can specify how marital assets — including marital property, retirement accounts, and other items — would be divided in the event of a divorce. Couples can also create postnuptial agreements, which serve a similar purpose. 

What to do if you suspect your spouse is overspending

Check bank accounts and credit card statements 

Check your bank accounts and credit card statements for unusual or unexplained charges. If you see charges for items your spouse wouldn't normally purchase, or if there are large withdrawals from joint bank accounts with no explanation, these could be signs of overspending.

Gather documentation 

If you suspect your spouse is overspending, gather documentation right away. This includes bank statements, credit card statements, receipts, and any other relevant financial documents. Once you have all of this documentation in one place, it will be easier to get an accurate picture of the situation.

Speak to a financial adviser 

If you're unsure what to make of the financial documents you've gathered, it's a good idea to speak to a financial advisor. They will be able to help you understand what's going on and offer advice on how to proceed. 

Hire a private investigator 

If you have reason to believe your spouse is hiding assets or income, you may want to hire a private investigator. A private investigator can conduct surveillance and gather evidence that may be helpful in court. 

Speak with your spouse

If you have proof that your spouse is overspending, you have several options. You could try to negotiate with them and come to an agreement about how the debt will be paid off post-divorce. If this isn't possible, you could ask a judge to issue a court order preventing your spouse from using shared savings accounts and checking accounts and opening new lines of credit. You might also file for divorce on the grounds of financial misconduct. 

Automatic Temporary Restraining Order

Some states set guidelines for an automatic temporary restraining order (ATRO). These court orders seek to eliminate misuse of funds by placing a restraining order on the use of marital funds and changes to insurance policies and retirement plans. If your spouse has used marital funds for the wrong purposes, a judge may hold them in contempt for violating the ATRO.

5 tips for managing your money during divorce

1. Make (and stick to) a budget

Figure out how much you need to cover basic expenses such as housing, food, and transportation. Once you calculate that number, don’t exceed it. This may mean making some changes to your lifestyle, but it will be worth it in the long run.

2. Track your spending

This goes hand-in-hand with sticking to a budget. When you know exactly where your money is going, it's easier to rein in spending as needed. There are plenty of apps out there to help you track your spending, so find one that works for you, and use it religiously. 

3. Build up an emergency fund

Unexpected expenses will undoubtedly crop up, so create a cushion of savings to fall back on if you can – it will help ease your financial burden … and your mind. Aim to have at least three to six months of living expenses saved. 

4. Close joint accounts and credit cards

As soon as possible, close any joint accounts or credit cards you share with your spouse. This will help prevent them from accruing debt in your name and protect your credit score. 

5. Get help from a CDFA

If you're struggling to keep on top of your finances despite your best efforts, get help from a financial advisor or counselor. A professional financial planner can provide valuable guidance and support during this difficult time. Hello Divorce offers certified divorce financial advisor (CDFA) services to divorcing spouses at a flat rate, so you only pay for the time you need with a professional. Read about our CDFA services here.

At Hello Divorce, we understand how daunting and overwhelming the divorce process can be. It can be very upsetting to find your spouse has been taking more from shared checking accounts, or savings accounts, or other accounts than they should. If you are not yet a member, please schedule your free 15-minute call, where we will provide general information about our plans and services as well as specific recommendations just for you.