Many thanks to William Mikula, a/k/a Dr. Credit, for the guest blog post today. Credit money matters in Divorce….http://thecreditline.blogspot.com/
He writes a great blog with a lot of helpful information on credit matters. I hope you’ll check it out!
Coming up this week. I’m being interviewed about “Understanding Social Security When it Comes to Divorce,” on
www.SingleAgainNowWhatRadio.com. The “Live” show will take place on Wednesday,
Hope you’ll listen in to the show!
Attention – Those considering or in the process of Divorce
Are You confused and overwhelmed in your
divorce and don’t know where to begin?
Am I really getting my fair share?
Will I be able to afford to stay in the house?
What am I entitled to in retirement?
What steps can I take now to avoid being saddled with my e
How can I protect the payments I am entitled to if something should happen to my e
If you answered yes to any or all of these questions then you don’t want to miss this teleclass:
Divorce Dollars and $ense
Wednesday,
We are offering this free teleclass so that you can be educated and armed with useful tips, tactics and tools to help you manage and survive your divorce!
During this call we’ll be discussing:
· What you MUST know about how to get your best settlement.
· What kind of divorce options are available and who should be on your divorce team.
· How a financial advisor can make a HUGE difference in your settlement - now and in the future.
· What you MUST know about credit issues and bankruptcy to avoid getting burned.
· Understanding spousal and child support issues.
· Ways to protect your income stream or settlement agreements.
· What you NEED to know about divvying up the marital pot.
· What you MUST know about retirement - special issues around pensions, IRA’s, 401K’s and Social Security.
· Why all assets are NOT created equal and how to get YOUR fair share.
· And much, much, more….
I hope you’ll join us on this FREE call to learn more about how you can take control of your financial destiny and make your dollars go further with:
Divorce Dollars and $ense
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Attention – Those considering bankruptcy or divorcing someone who might choose bankruptcy…
Are You confused by all the conflicting information out there surrounding your rights in bankruptcy?
· Are credit worries keeping you awake at night?
· Would you like to get a fresh start, but don’t know how?
· Do you want to protect yourself from your creditors?
· Do you want to protect yourself from your spouse’s credit issues?
If you answered yes to any or all of these questions then you don’t want to miss this teleconference:
“Bankruptcy Basics and How to Avoid Being Burned in Divorce!”
Wednesday, February 25th, 2009
7:00pm EST (
This month’s guest is
During this Teleseminar, we’ll be discussing…
To register go to my events page - Bankruptcy Basics to sign up now!
Many times in a divorce, one or both parties will be required to set up a trust to hold funds for the minor children’s college education. I’ve been contacted by divorce attorneys after the divorce to draft such trusts based on the language in the divorce agreement. Which was written by divorce attorneys. Not trust attorneys. And that is where the problems can begin.
Many times the terms used in the divorce agreement regarding the trust are not clear - for instance if "minor children" is used in one place and "emancipated children" is used in another, which was meant? If it refers to a providing for funds for a "secondary education" does this mean only at an accredited school, or would a trade school qualify? Trying to interpret the answers to these questions after the divorce is final so that the trust can be drafted to comply with the agreement can be time consuming and costly. In addition, if the other party disagrees with how the trust was drafted based on vague language in the divorce agreement, that can lead to more costs and time with the divorce attorneys hashing out what their clients meant in the agreement, and the estate planning attorney having to redraft the trust.
Checking in with an estate planning attorney when you are including language about a trust in a divorce agreement can save you and your client a lot of time and hassle, and the estate planning attorney might bring up some issues you hadn’t thought of with regard to the trust.
Here’s a great article with information on bankruptcy and it’s effects on divorce. For more information on bankruptcy and divorce issues, don’t miss my next teleseminar this month, “Bankruptcy Basics and How to Avoid Being Burned in Divorce" with Christine Stadler, divorce and bankruptcy attorney. February 25, 2009 7:00 pm. Details for sign-up to be posted soon.
Bankruptcy During Divorce (posted at Lawyers.com)
by Sherrie Bennett
If you think you’re headed for divorce and have a lot of debt between the two of you, it might make sense to file for bankruptcy before starting a legal divorce proceeding. Filing bankruptcy first can simplify the divorce by clearing out some of your debt. This can make it easier to negotiate how the remaining debts should be divided, and protect you from your soon-to-be-ex’s bankruptcy filing down the road. Also, you and your spouse might want to consider filing a joint bankruptcy before the divorce. Not only will this make the final division of any remaining debts even easier, but filing a joint bankruptcy is cheaper than filing two separate ones. In either event, bankruptcies and divorces have serious impacts on each other, especially with respect to your property and personal finances.
Effect of Bankruptcy on Divorce
When one or both spouses file bankruptcy, all the community property, that is, property that was bought or acquired during the course of the marriage, becomes a part of the bankruptcy estate and is available to pay debts. The bankruptcy estate is simply all of your property that you own at the time the bankruptcy is filed.
When you or your spouse file a bankruptcy, an automatic stay immediately prevents creditors from collecting on most debts. But the automatic stay doesn’t prevent you from asking a divorce court to order your spouse to pay child support or alimony. Once a bankruptcy court decides property is "exempt," that is, it is not part of the bankruptcy estate and so it is not available to be sold to pay debts, a divorce court can then divide that property. Property exemptions are defined not only by federal law (the "Bankruptcy Code"), but also by the laws of the state in which the bankruptcy is filed.
Some examples of federal exemptions include:
* A specified dollar amount for real property that is for his or her residence, and
* A specified dollar amount for one motor vehicle, such as your primary car.
Property Settlements and Bankruptcy
Negotiating a property settlement in the midst of bankruptcy is complicated. Debts related to a property settlement are presumed to be "nondischargeable" in bankruptcy, meaning that the person who files bankruptcy can’t have those debts wiped out and must still be responsible for them.
But the bankruptcy court will wipe out those debts if the person filing for bankruptcy can show:
* That he or she can’t pay the debt and still take care of him or herself and any dependents, or
* That wiping out the debt would result in a benefit to the person filing the bankruptcy that outweighs any harm done to his or her former spouse or child by nonpayment.
So if you think your spouse is contemplating bankruptcy after your divorce is final, you’ll want to word your property settlement in such a way that your soon-to-be-ex’s obligation looks and acts as much as possible like a support obligation instead of a property settlement. That is so simply because support obligations are more difficult to have discharged.
How do bankruptcy courts decide what’s support and what’s property settlement? It varies greatly by state, but courts have based their decisions on such questions as:
* Does the obligation terminate or reduce with the occurrence of certain events, like remarriage or a child turning 18?
* Is the obligation in installments or a lump sum?
* Are there minor children? * What is the relative health and education of the parties?
* Was there a need for support at the time of the divorce?
If your bankruptcy hasn’t been filed yet, these distinctions and problems probably won’t effect you. For many bankruptcies filed on or after October 17, 2005, any obligation between former spouses can’t be dischargedin bankruptcy. So, a spouse with an alimony and/or child support obligation can’t have that obligation discharged in bankruptcy if the bankruptcy petition was filed on or after October 17, 2005.
Property Liens
One way to protect yourself in a divorce negotiation if you think your spouse may be contemplating bankruptcy in the future is to take a security lien as a backup to debts your spouse is to pay you after the divorce. The lien should be on property your spouse is to be awarded in the divorce, preferably property that means a lot to your spouse. That way, if your spouse later asks the bankruptcy court to discharge the debt he or she is supposed to pay, you can seize the property to pay the debt.
Indemnity Clauses
Another precaution in the face of a soon-to-be-ex-spouse talking about bankruptcy is to have a "hold harmless" or "indemnity" clause written into the divorce decree, requiring your spouse to pay certain debts or repay you if a creditor makes you pay the debt. If your ex-spouse later files bankruptcy, you can go to bankruptcy court and ask the judge to enforce the indemnity agreement. While an indemnity agreement won’t guarantee you’ll get paid, it’s one more factor for the bankruptcy judge to consider.
As you can see, the issues of going through divorce and bankruptcy at the same time are confusing at best, and highly damaging at worst. If you find yourself in this position, it makes sense to find a bankruptcy lawyer who can help you with all the issues.
This was posted on the Prescriptionforchange.org blog on Jan. 26, 2009. It is very sad that we have come to a point that people have to go to such extremes just to get medical care. My sympathies go out to Julie’s family.
Consumers Union’s Cover America Tour traveled the country this past summer documenting Americans’ experiences with our health care system. We met Julie in August 2008.
Julie found the love of her life on her second marriage to Gene. After 18 years together, Gene showed Julie how much he loved her by giving her a divorce.
Employed but uninsured, Julie was diagnosed with uterine cancer four years ago. She was able to get free care through a special program offered by the city of Spokane, Wash. But it was a temporary solution, and when the city could no longer offer her help, Julie called every program she could find so she could continue cancer treatments. They all told her the same thing: the couple made too much money.
By this point Julie was out on disability, too sick to work. But Gene, a cabinet builder, made about $100 a month over the limit to qualify for any programs. How would they survive if he actually tried to make less money? They were barely making ends meet as it was, especially with the mounting medical bills.
They finally realized that in order for Julie to financially qualify for a program to get treatment for her cancer, they’d have to do the unthinkable – get a divorce.
Julie and Gene went to the county courthouse to file the papers that legally ended their marriage, allowing Julie to finally qualify for Medicaid and receive treatment. “As we were going through the divorce process, we discovered that we weren’t alone,” Julie said. “There are many couples in the same situation. It is not right to force people to make the choice of ‘get a divorce or die’.”
While she and Gene were relieved that she finally had coverage, Medicaid came with its own pitfalls. They quickly learned that Julie had to reapply every six months, creating a never-ending stream of paperwork, applications, deadlines – and the constant worry that she might get rejected for filling something out wrong.
A cancer diagnosis is frightening and life-altering enough. Now add on the scramble to find coverage for treatment to save your own life, and having to divorce your spouse. As Julie put it, “And cancer patients aren’t supposed to be under a lot of stress…what a joke.”
But Julie was a fighter. She battled cancer for over 4 years and celebrated every day she had, speaking out for the need to reform our health care system so others wouldn’t have to struggle to get care the way she did. She volunteered her time with organizations that fundraise for cancer research, and she and Gene continued to take care of each other. After all, they were – in their hearts, if not on paper – still married.
Two weeks ago, cancer took Julie’s life. We send our deepest sympathy to her friends and family. She touched our lives, and she will be missed.
Her story illustrates the impossible dilemma so many Americans currently face trying to secure affordable, quality health coverage. You can take action for change at www.PrescriptionForChange.org
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