Divorce can bring out the darkness in people, especially when the relationship between both people has crumbled. Some spouses may resent their partner for the divorce and do hurtful things that negatively both parties. In some cases, a spouse may resort to sabotaging marital finances out of spite, anger, or a desire to gain the upper hand in divorce proceedings. If your spouse is hiding assets, draining joint accounts, or running up debt in an attempt to sabotage your financial stability, you need to know what options are available to protect yourself and ensure a fair division of assets.
Key Takeaways
- Common signs of financial sabotage include draining joint bank accounts, running up debt, hiding assets, reckless spending sprees, and neglecting financial responsibilities, all of which can negatively impact divorce proceedings.
- In New Jersey, an Automatic Temporary Restraining Order (ATRO) may be put in place during divorce proceedings to prevent major financial changes. Additionally, you can seek a financial injunction to freeze accounts and protect your assets.
- Forensic accountants can help trace hidden or transferred assets and provide crucial evidence of financial misconduct during a divorce.
- Courts may impose serious penalties on the spouse engaging in financial sabotage, including unequal asset distribution, reimbursement orders, contempt of court, and covering legal fees.
The Signs of Financial Sabotage
Financial sabotage can look like a lot of things, but it is mainly reckless spending with the motive of diminishing assets prior to divorce. For example, your spouse may start spending more money on vacations, jewelry, recreational vehicles, collectibles, and automobiles. Other things to look out for include:
- Draining Joint Bank Accounts: A spouse might withdraw large sums of money from shared accounts, leaving the other party without access to funds.
- Running Up Debt: Some spouses may open new credit cards or loans without the other’s knowledge, using marital funds to accumulate excessive debt that both parties are responsible for.
- Hiding or Transferring Assets: One spouse may attempt to conceal assets, such as transferring them to friends or family members, opening secret accounts, or underreporting income.
- Spending Spree: In an effort to reduce the pool of assets, a spouse might go on a reckless spending spree, purchasing expensive items with joint funds or intentionally depleting savings.
- Neglecting Financial Responsibilities: Some spouses may stop paying bills, refuse to make mortgage payments, or fail to contribute to necessary household expenses, resulting in financial strain.
The tangible purchases that can be easily tracked should be brought to the attention of the court, as you can seek recourse using documentation.
Spending on Non-Assets
One question that may arise is spending that can’t be easily tracked, such as spending on non-assets. For example, what if you spouse sends a couple thousand to their sibling or takes a friend out to lunch? Since that money can’t be returned, there is nothing that can be fairly divided. Again, it is important to document everything, including spending habits. Speak with your lawyer and see if they believe an injunction can be filed that will freeze accounts for only necessary expenses.
Legal Protections Against Financial Sabotage
Legal injunctions, as mentioned previously, are one way to protect yourself against financial sabotage during a divorce. Here are some other methods for safeguarding your assets:
Consult with an Attorney
Working with an experienced family law attorney is crucial in these situations. Your attorney can help you take legal action to protect your finances and ensure that your spouse is held accountable.
Automatic Temporary Restraining Orders
New Jersey’s legal system includes protections that can help prevent financial sabotage. When you file for divorce, an Automatic Temporary Restraining Order (or ATRO) may be put into place to prohibit both parties from making major financial changes. This includes selling or trasferring marital property, closing or emptying joint bank accounts, taking out new loans or credit cards, and canceling insurance policies.
Appointing a Forensic Accountant
If you suspect that your spouse has hidden or transferred assets, a forensic accountant can help. These financial experts specialize in tracing funds, uncovering concealed assets, and ensuring full financial disclosure. With the assistance of a forensic accountant, you can present evidence to the court that supports your claims of financial misconduct.
Requesting Equitable Remedies
New Jersey follows the principle of equitable distribution, meaning marital assets are divided fairly but not necessarily equally. If your spouse has deliberately sabotaged marital finances, the court can take that into account when determining asset division. The court may award you a larger share of the remaining marital assets or allocate debt to the spouse responsible for financial misconduct.
Seeking Temporary Support
If your spouse’s actions have left you financially vulnerable, you may be able to request temporary support or alimony. This support can provide you with funds for living expenses, legal fees, or other essential needs while the divorce is in progress.
Consequences of Financial Sabotage
What happens to the spouse who engaged in financial sabotage? Since such actions can have serious and negative influences on you (and any children), the court can impose serious consequences on the offender. Consequences include:
- Unequal Asset Distribution: Courts may award the innocent spouse a larger share of marital property to offset the losses caused by sabotage.
- Reimbursement Orders: The court can order the spouse who engaged in financial misconduct to reimburse the other spouse for lost assets or wasted funds.
- Contempt of Court: If a spouse violates court orders regarding marital assets, they can be held in contempt of court, leading to fines, penalties, or even jail time.
- Legal Fees: Courts may require the offending spouse to pay the legal fees and costs incurred by the other spouse as a result of the financial sabotage.
Contact a New Jersey Divorce Attorney Today
If you’re going through a divorce and believe your spouse is sabotaging marital finances, it’s important to protect your rights and take swift legal action. At Ziegler Law Group, LLC, we have extensive experience handling complex divorce cases, including gray divorce, high-asset divorce, and also financial misconduct. Our team can help you navigate the legal system, preserve your assets, and hold your spouse accountable.
Contact us today at 973-533-1100 or fill out our online contact form to schedule a consultation. Let us help you secure a fair and just resolution to your divorce.
