You’re Getting A Divorce. Can You Keep Using Your Spouse’s Credit Cards?
Celebrity divorces often spotlight common issues faced by couples everywhere, not just in Hollywood and Nashville. The credit card conflict that recently erupted in the Billy Ray Cyrus/Firerose Hodges split is a prime example. Find out the financial lessons you can apply to your own divorce.
“Achy Breaky Heart” singer Billy Ray Cyrus filed for divorce this spring from his spouse of only seven months, Australian musician Johanna Rose “Firerose” Hodges. The high-profile split has raised issues about annulment (Billy Ray filed for one based on the grounds of fraud) and Firerose’s claims that Billy Ray had been emotionally abusive throughout their relationship.
The latest public development in the pair’s divorce boils down to money, or rather, Hodges’ use of Billy Ray’s personal and business credit cards to pay for her expenses.
Cyrus objected to Firerose continuing to spend on his cards, arguing that she should stop her “unauthorized use” of his lines of credit. Firerose contended that using the cards for expenses was the status quo during their relationship and she was doing nothing wrong or surprising. Cyrus then took the matter to court, requesting a judge to order Firerose to cease using his cards.
In a decision handed down earlier in July, a Williamson County, Tennessee judge granted the Hannah Montana star’s request to freeze his estranged wife’s access to his cards after finding “no legitimate reason for [Firerose] to have access to and to make any additional charges,” according to People magazine.
Does this mean that Cyrus has no further obligation to cover Firerose’s expenses? Not exactly…
What Happens to Credit Cards After You and Your Spouse Decide to Split?
If your credit card is a joint card in both your names, or your spouse is listed as an “authorized user” on a card (or you are), please read our previous blog: “What Happens To Joint Credit Cards When You Divorce?” for general information on what to do next.
On the other hand, if, like Cyrus, you have credit cards that are solely in your name or business name, especially if those accounts originated before your marriage, generally, you may have the ability to declare the card off-limits to your spouse. Steps to do this include having the card servicer “freeze” the account from all use or canceling the card and ordering a replacement that only you have access to, ideally with new account numbers.
And Now Here’s the But…
Just because your spouse no longer has access to a certain credit card, it does not necessarily mean that you have no further financial obligation to your spouse.
Note that Firerose responded to Billy Ray’s demand to stop using the cards with the simple rebuttal that using the cards to cover her expenses had been the status quo of their marital lifestyle.
This is key because note that when the judge ruled in Billy Ray’s favor to prohibit Firerose from using the cards, the judge also ordered Cyrus and Firerose to “exchange income and expense statements as well as asset and liability statements” by July 11 and engage in “good faith mediation” on their financial issues by the end of August.
What this order seems to point towards is some kind of temporary alimony consideration for Firerose to provide her with financial support to maintain the status quo of their marital lifestyle – without the need to use Cyrus’s credit cards. So while Cyrus did “win” on his point of freezing her credit card access, the financial negotiations between the two may just be starting and he may need to pay alimony payments in the future — at least temporarily.
What Could Happen Next?
The granting of an order of temporary alimony (spousal maintenance) in divorce is common. Depending on the outcome of the divorce, temporary alimony may become a finalized part of the decree, or not if other circumstances exist. In the case of Cyrus and Firerose, for example, there are reports that a prenuptial agreement exists, which could include language that would dictate the final alimony terms.
Celebrity or Not, in Any Divorce, Paying Attention to Finances is Key
Get copies of all your credit card accounts, pay attention to the names on the accounts and their history of usage, and run a credit report to find any hidden accounts. Credit card debt is addressed during asset/debt division in the divorce, so hang onto all those account statements to begin to delineate who used the card and for what. This can be crucial for deciding who pays off which portion of the debt.
Cyrus and Firerose are expected in court for required mediation on their issues on August 31. This blog will be updated with any other developments.
