Financial Tips for Divorced Women

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediators; California Divorce MediatorsAre you a divorced woman and are a bit overwhelmed by the amount if bills appear to simply pile up? If that is so, you definitely need some kind of financial guidance. After your divorce, your standard of living changes. So, finding a proper financial assistance, paying bills and organizing are some of the prime tasks you need to embark upon.

Why divorced women need financial help

According to an estimate, about 40 percent of the divorced women have a new standard of living after their divorce comes through. Though in many cases the alimony provided by an ex-spouse could pay for living expenses, that still may not be adequate to provide all the expenses and lifestyle that they were used to while being married. The alimony they get after the divorce may not be adequate to take care of all the bills.

Moreover, the condition is even worse for some divorced women who do not even know how to pay their bills since they did not do these tasks while married. So, they are at a loss where and how to start from as far as the question of paying the bills and organizing their financial things pop up. In such scenarios, these women require some handy tips for paying their bills so that they are on a right track.

Tips for divorced women to pay their bills

  • Collect all the bills that you have received in one place for each month.
  • Now separate these bills on the basis of their due dates or depending on the frequency of their payment, For instance, if you have to pay twice a month for some bills, you can make two different piles. One pile to be paid at the month’s beginning and the second pile to be paid at the end of the month.
  • Creating a monthly budget is very important so that you know how much monthly income is left with you after making the bill payments. This will also help you to make timely payment for your credit cards. So, paying the bills should be the first priority. You can then use the remaining money for the rest of the expenses.
  • Put all the checks for your bills in separate bill payments to be prepared for the month. In case you make your bill payments through banks, set up your payment in advance to avoid last moment tension.
  • After you get paid, mail your first lot of bill envelopes that are due for the month’s first half. You can repeat the same procedure when you receive your second paycheck.

Are you facing difficulty with writing checks? Do not worry as you can get online instructions to fill them. In case you are interested in making online bill payments, you should get in touch with your bank and find out whether they provide such services or not. If they are offering the service, their representative would definitely help you with the entire process. There are some companies that accept payments on their corporate websites or over the phones. You can get to know the details from the bills sent to you or by calling the payment center of the company.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Handling Defaulting on Debts During a Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediator; California Divorce MediatorsDivorce can become a complicated subject, especially when debt becomes a part of it. If you are a married person, then you know what that means. There have been cases where one person walked away without paying a single cent while the other went bankrupt. It could be a nightmare for the one paying the debts.

How you handle debts after your split can have a major impact on your credit.

Debt on property

In states like California, both you and your spouse are liable for the debts incurred after you got married. It does not matter in whose name the account is. Both of you are responsible for the property purchased and the debt as to be shared. In other states, the debt is paid off by one person only. It might not sound fair but that is the law in those states.

Debt on credit accounts

The same goes for credit accounts as well. Since the credit was shared by you and your spouse, the debt too must be shared. Even if the divorce rules say that your spouse is responsible for paying the debt, you will still be a part of it. You miss the payments, and you become a defaulter. If you become a defaulter, then your credit score drops, making it harder to get credit in the future.

Handling joint debts

After you get divorced, make sure you close all joint accounts that are in your and your spouse’s name. Remove your spouse’s name from the authorized user list. Try getting the account converted into individual accounts if you can.

Try paying off as many debts as possible before the actual divorce. It will keep you prepared for any extra charges that might incur during your divorce proceedings.

Minimizing damage

When you close accounts, make sure that the credit accounts are in your name. Doing so will give you control over your money and you would not have to worry about any unknown debts.

It’s common among couples that one person borrows while the other spends. If you are one of them and you are on the spending side, then talk with your partner and work out a common ground. Understand that if your credit score is low, future lenders would not lend you money. Before you get divorced, try clearing as much debt as you can together.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

How Are Alimony Payments Affected by Bankruptcy?

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediator; California Divorce MediatorsWhat is bankruptcy?

Bankruptcy can put a person in a huge financial predicament and occurs when that person has not been spending his money wisely and his expenditure has exceeded his income. Bankruptcy disallows the person from making necessary or important payments, paying off creditors, getting loans from banks and has a lot of other negative impacts on a person’s financial situation.

If a couple is undergoing a divorce and one spouse is required to make alimony payments to the other spouse and that spouse has filed for bankruptcy, then it can be very difficult for him or her to make the alimony payments. If the spouse is bankrupt, he can use this as a tool to avoid or escape making spousal support payments.

Dischargeable and nondischargeable debts

Bankruptcy disallows a person from discharging his debts. There are certain bills, payments, and expenses that are completely avoidable when a person files for bankruptcy and these are specified in the laws in the state of California. But some debts are nondischargeable which means they cannot be avoided or eliminated just because the person is bankrupt. These include tax payments, loans taken and alimony.

Even though alimony or spousal support and child support are some of the payments that fall under the nondischargeable debt category there are two situations in which alimony payments would be exempted from this category and the spouse would be discharged from making these payments.

U.S. State laws regarding alimony and bankruptcy 

Section 523 of the U.S. Bankruptcy Code clarifies that persons or debtors cannot be discharged from making spousal or child support payments because of bankruptcy. It states that alimony payments are nondischargeable debts under the laws of federal bankruptcy, however, there are two exceptions to this rule –

Involvement of third parties 

If a third party becomes involved in the spousal support arrangements, then the alimony payments become dischargeable even though the spouse is declared bankrupt. If the spouse hands over the burden of alimony payments to a relative in his family, then he is discharged from making the alimony payments himself.

Incorrect divorce documents

When a couple gets divorced the court awards them a divorce decree. This document is one of the most important documents in a divorce and specifies the reasons for the divorce and the terms and conditions of alimony/child support payments. If for any reason there are some mistakes or errors made in the divorce decree with regard to the nature and type of alimony required to be paid, then the spouse who is required to make the payments can be discharged of those debts if he is bankrupt.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation