What Happens When Your Former Spouse Files For Bankruptcy?

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation; California Divorce MediatorsWhen you go through a divorce, it can be both financially as well as emotionally painful. Moreover, if your former spouse suddenly files for bankruptcy, things can be even more stressful for you as there is a possibility that your financial stability can get greatly affected.  Divorce, as well as bankruptcy, may have a great impact on your financial position in various ways based on the new circumstances of your ex-spouse. Check out some of the important things that you can consider while going through a bankruptcy and a divorce.

Cosigned or joint credit liabilities

When your former spouse files for bankruptcy, the responsibility for any debt falls on you in case you are a cosigner or a joint owner. The lender may hold you accountable as a cosigner or a joint owner to pay for a loan when your ex-spouse declares that he/ she is bankrupt and is unable to make the due payment.

Though it is unfortunate but the creditors are least concerned about the statements mentioned in your divorce agreement. So, your liability to pay the debt still exists when your former spouse fails to make the payment. A divorce payment does not remove your accountability to pay; it only indicates that you can compel someone else to do so. So you should be ready to pay the debt in case your former husband or wife is discharged from the need to pay off the loan or stops paying due to the bankruptcy. In such a scenario, you should immediately get in touch with your divorce lawyer and discuss what legal options are available for you.

Child support and alimony

Expenses for child support and alimony should be paid prior to paying the other creditors as well as taxes. However, though your alimony cannot be discharged, it does not mean that you will continue receiving the same amount before your former spouse fee pared bankruptcy.  In a majority of the States, the obligations for alimony can be revised when the ex-spouse submits his or her request to a bankruptcy court. It is up to the bankruptcy court to decide a revised amount for the alimony or enter into a new agreement with you after the petition filed by your former spouse.

But there are a few rare situations when alimony may be also discharged. Thus, in order to be on the safer side, it is better to consult your divorce attorney to make sure that your support payments or alimony remain protected.

Impact on your credit report

Though your ex-spouse filed for bankruptcy, your credit score may not get affected directly. The reason for this so your credit score is considered to be distinct and separate from your former spouse.

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

4 Tips for Protecting Your Money during Divorce

Posted by: Gerald A. Maggio, Esq.

orange county divorce mediation; California Divorce MediatorsOne of the most important things to focus on during your divorce should be how you can protect your money. Money is one such issue that one should start preparing and protecting long before filing a divorce. Do you suspect that your spouse could be hiding money? When you feel that your divorce will be full of conflicts and not a harmonious one, it makes sense to take certain precautionary measures with respect to your financial matters prior to filing for your divorce.

If you are a stay-at-home mother, whatever money your partner earns to run the family is “your money”. So, even if you end up getting divorced, you should not feel that just because you do not give your own income it means that you do not have any bucks to protect. After all, your kids and you should feel financially secure until the time you can start working. Now, this also means that you do not have any issues with respect to protecting the portion of your husband’s income that is required for you to be financially stable after your divorce is finalized. Check out some of these easy tips for protecting your money during your divorce.

Immediately close all such joint credit accounts that you hold with your spouse

You need to put an end to all the joint credit accounts that are held by your spouse and you together r pay them off. For instance, a home mortgage will come under this category and should either be paid off quickly if possible. Alternatively, it should be put only in the name of your spouse. In case you are unable to settle the payment of such credit accounts, get in touch with your creditors and try to figure out the steps that should be taken so that your name gets removed from these accounts.

Open a new personal account in your name

It is possible that you did not have a bank account in your individual name before. Now is the time for you to open a new savings as well as a checking account. Once you open it, do keep your spouse informed about it and let them know the amount of money that you plan to deposit in your account. Your spouse should know about these accounts so that there would be no allegations of trying to hide funds. When you separate from your spouse and file for the divorce, you will require money to meet the fees of your attorney, court fees as well as a new house to live.

Do not incur fresh debts

Your priority should be to save the maximum amount of money prior to filing for a divorce. When you run charges on your credit card, you are not saving money but accumulating new debts.

Protect your precious items

When your spouse has been abusing you for some time now, or you have a gut feeling that he or she will hide or destroy expensive possessions, you should hide them. However, you should note that if there is any valuable that were bought with the marital funds, it needs to be valued and then divided during your divorce process.

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

Are you responsible for your spouse’s credit card debts after divorce?

Posted by: Gerald A. Maggio, Esq.

orange county divorce mediator; California Divorce MediatorsYou have divorced your partner but you may still have to take certain additional steps to ensure your financial stability. If you and your former spouse held joint credit cards before your divorce, ditching debts can be a difficult proposition. It should be understood that a credit card company is not bound by any kind of divorce decrees. Hence, they can be after you for debts that are jointly incurred in case you ex spouse fails to pay. That is precisely the reason why any Orange County divorce lawyer, credit counselor or financial planner may suggest you to end your marriage without any kind of joint debt. Now, this can be done by opting to pay off your joint cards together. Alternatively, the debt in incurred on your joint credit card can be split and then transferred to the card in the name of each partner. The aim for this step is to ensure that all your liabilities are removed for the debts incurred by your partner. Make sure to inventory the wallet you hold and ensure the cancellation of all the joint credit cards during your divorce process.

It can be extremely painful to go through the consequences of stepping into your new life with previous jointly held debts. If your former spouse refuses to pay whatever he or she was supposed to pay or files for bankruptcy, the creditors may be after you to realize the entire debt amount along with penalties and interests. As a precautionary step in this direction, you may include additional provisions into your divorce agreement so that your former spouse has to pay up. However, knocking the doors of the court can be both time-consuming and costly.

Here are the basics

Typically, any debt that is incurred during a marriage is the combined responsibility of both the parties provided they have been co-signers on those credit cards. On the other hand, in case the credit card is in the name of only one spouse and the other partner has been named as an additional cardholder, the latter cannot be held responsible. After the partners have got legally separated, any debt that has been incurred on a credit card is the sole liability of that spouse who made their purchases using the card,

What are the options before you?

You have various kinds of options to handle debts on a joint credit card. The one that you will employ depends on the nature of relationship you share with your ex spouse. A sure shot way to make sure that you don’t have to pay for those joint debts is to cancel all your joint cards. A second option for you could be to pay off all jointly incurred liabilities using your joint savings or joint assets such as a jointly owned property. In case you are not doing well financially, you can consult a good Orange County divorce attorney to assist you in figuring out the various options.

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

Top Tips to Manage Your Finances after Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorneys in orange countyManaging finances after your divorce are finalized is a big step in your new life. Since you have already gone through your divorce process, you know finance matters can make you highly stressful. For many people, the major cause of Rory and tension is that they will be devoid of their second household income. Moreover, there is a requirement to tighten your purse strings so that you can deal with a financially trying time. There are some others who struggle a lot post their divorce since their former spouses always handled the finance part. Here are some top tips for handling your finances post divorce.

Take a detailed stock of financial inventory

You need to ensure that you are aware of the condition of your financial standing after the divorce. It is the right time now to seek out for superior deals on the existing financial products to improve your finances or discard any product that is not performing well in the market.

Have a proper track on your expenses

When you know what and where you are do ending your money, you are moving in the right direction to keep the finances under your control. You can use a spreadsheet like an Excel or could use your mobile phone’s note application to start keeping a tag on every item that you spend. This way you can one where your money is flowing where and how you may start saving more money.

Prioritization is important

It is not unusual to start panicking about your financial position after your divorce is through. You start feeling overwhelmed with too many new developments in your new life. So, begin with what is really vital i.e. ensuring that you have enough finances to keep your children sheltered, clothed and fed properly.

Prepare a realistic budget

When you prepare a realistic budget, it will serve as a guiding force so that you can sail through the time coercion that immediately follows after a divorce without facing financial difficulties. Apart from where your money is young as discussed before, you should have a proper tab on your earnings too. So, examine your earnings and expenses to prepare a practical budget.

Update documents and accounts

Post your divorce you need to ensure that all your financial products gave the correct names mentioned in them. Such documents include your credit cards, Frank accounts, title deeds, wills and insurance policies.

You should not hesitate or feel embarrassed if you need expert advice if it is about handling your finances after your divorce. In case you feel that you require financial, legal and tax advice, simply go ahead and get the necessary consultation. However, make sure that the expert you consult is registered with the appropriate bodies.

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

Options for Filing Tax Returns After Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation; California Divorce MediatorsRecently divorced individuals can often be faced with new challenges and problems that did not exist previously. One of them is tax filing. Married couples can file for tax either jointly or separately. Usually, the tax filing status of couples is done jointly. In California, couples only have the option for joint filing but divorced individuals can do it separately if they obtain a final decree of divorce by the end of the tax year.

If the final divorce decree is obtained before the end of the tax year, each partner has the option of filing the tax return as single or head of household. They follow the same tax rules as legally separated couples.

Filing as head of household

A head of household is a person who is unmarried and takes care of the house expenses. Those who qualify for head of household should file as such because the effective tax rate is lower than those who file as single individuals. It also protects one from joint tax liability that might arise due to the other spouse’s error.

One of the advantages of filing as head of household after divorce is that it does not require the other spouse to itemize things.

Filing joint and separate returns

In California, only married couples are allowed to file a joint return. It may not be applicable for legally separated couples and individuals should check the state tax laws first before filing a tax return. According to federal tax rules, a marriage is one where a legal union exists between two individuals. It does not matter which state the individuals belong to as long as their marriage took place in California. The state law also controls whether couples are legally separated or divorced under separate maintenance decree.

Joint returns can be filed by couples who are legally separated but still married. Separate returns can also be filed by both individuals.

Filing tax returns can be confusing and difficult after a long and tough divorce. It requires the individual to understand the state tax laws and file for returns accordingly. California state laws require couples to file tax returns jointly. Divorced individuals can file separately provided the final divorce decree has been passed by the end of the tax year. Legally separated couples can file jointly or separately. Tax rates can increase or decrease, depending upon how it is being filed and in what condition.

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

Tips for Splitting Marital Property During a Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorneys in orange countyBefore understanding how your marital pretty should be split during a divorce, it is important to recognize what a marital property means. Any property owned by you or your spouse during the course of your marriage is counted as a marital property. The properties you owned prior to getting married or any property that you inherit while being married is not considered as your marital property. Some spouses are under the impression that they can escape the process of splitting their marital assets; however, a divorce lawyer is a smart professional. Hunting for hidden assets is one of their top priorities when they fight cases for their clients. If you do not want to get penalized by the court for tucking your marital asset, later on, it is better to disclose such properties in the beginning. Check out the following tips for splitting your marital properties while your divorce proceeding is pending.

Take help of a mediator

It is a good decision that you hire a mediator who will help you by working on sticky issues, which may pop up while the marital properties are being split. While it is a requirement in some States to have mediation while the divorce process is on, other States do not have such a requirement. It is better to save your money and time by hiring a reputable mediator who will help you in this process prior to the involvement of the courts.

Stop fighting on small issues

When you let emotions rule over your good sense, your objectives may not be fulfilled. For instance, there could be a portrait in your bedroom, which you are emotionally attached to and want to take it with you by any means and you do not agree with your spouse that he or she should have it. In case you fail to arrive at an amicable settlement on such trivial issues, your judge may not care about your emotional attachment to certain objects. A court’s job is to find out the assets acquired by you during your marriage, As such, it will instruct the property to be split according to the laws of your state and not according to what you want. To put it simply, it is you and not the judge who has made an emotional and financial investment in your marital property. A judge cannot and is not in a position to order for the split of marital properties in a manner that will satisfy both the parties involved. If the couples can mutually sort out those issues, then only both of them can be satisfied. Any attempt made to hide marital assets is a legal offense, which means you are violating the law.

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

Posted on Monday, September 18th, 2017. Filed under California divorce, California Family Law, Division of Property, Division of retirement plans, Divorce, Divorce & Debts, Divorce & Division of Property, Divorce & Family Businesses, Divorce advice, Divorce court proceedings, Divorce Mediation, Family Law, Frequently asked questions, Orange County divorce, Orange County divorce mediation, Orange County divorce mediators.
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How to Determine Your Financial Needs After Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorneys in Orange County; California Divorce MediatorsYou may think that estimating your expenses after the divorce is an easy task but in reality it may not be true. In fact many people are unable to name a proper estimate of their current lifestyle expenses. Majority of the people are practically clueless about where their money is going. Even if they have a tough idea, they are unable to articulate it properly when queried about it. When someone prompts them about what their expenses and requirements could be at present, they may agree to that.

What could be a big mistake?

Usually, your attorney may request you to prepare a budget based on their expenses. You may not down the obvious expense heads such as phone bills, Internet bills, cable TV/ satellite TV charges, cat insurance, loan payment for car, utilities, rent and mortgage. However, you may still feel that something is still amiss. Since you are well e not certain, you do not hand your budget to the attorney. Although your attorney may be constantly after you, you cannot be specific though your time could be running out.

In fact may find that the process has a strong likelihood with done or being asked the sand question repeatedly in a torture like situation.

While you may not have a sure shot answer to their question, you may eventually give your attorney something so that they do not pester you again. You should remember the figures you hand them over will be used for ascertaining some major monetary issues in your divorce case.

A financial consultant specialized in divorce cases suggests their clients that in case they want spousal support but do not know what their exact requirements are and what they should ask for, there are high chances of not getting it. On the other hand, when you are supposed to provide for spousal support but are ignorant on what are your needs. It is a tough job to hang to it. Plus it may not be there if you require it.

Merits of consulting a good divorce financial professional

When you work closely with a reputable divorce financial professional, the financial aspects of a divorce can be smoother. Additionally, it will also be more financially sound. Remember that it is the most crucial financial decision in anyone’s life. A divorce financial expert is well-equipped with the knowledge of a detailed list of all possible costs that could either be applicable to you or may help in reminding you to add it to your expense list. A well-prepared statement of expenses as well as a proper understanding on how up use your money can be the foundation of your financially secure future.

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

How Is Legal Separation Different From A Divorce?

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorney Orange County; California Divorce MediatorsLegal separation is the formal process of confirming an actual separation of the parties, as opposed to filing for divorce.  Parties that chose legal separation do so for religious reasons, do not believe in divorce, or have concerns about medical insurance coverage, among other reasons.  If the parties proceed all the way to a final judgment in a legal separation case, they can obtain the same orders that they would have in a divorce case.  The biggest difference is that in the end, the parties are technically still married after a legal separation case and cannot get legally remarried.

Agreement for separation

An agreement on separation includes terms that are quite similar to those if the concerned couple was getting a divorce. This means there will be a distribution of their marital property, agreement on child visitation and custody if applicable. Not only this, the couple opting for a legal separation will also have to come to a decision on dividing any debts that were incurred by them after they got married.

Ideally, the above-mentioned terms should be binding in case the couple wants to get divorced. Moreover, both parties should hire their individual attorneys for negotiating all the details of the agreement on their legal separation. In case the spouses eventually make up their mind to go one step ahead and file for a divorce, it has been observed that the judge usually keeps the same terms as both the parties agreed to them earlier.

Differences between a legal separation and a divorce

Check out some of the following key differences between a divorce and a legal separation.

Name

While the spouse continues with the legal married name in the case of a separation, a wife may revert back to her maiden name after the divorce comes throughout the divorce be.

Child support

The conditions related to child support are ascertained when the legal separation takes place. When a couple decides to go for a divorce after being legally separated, ideally, the same terms are followed that were mentioned in the document for legal separation.

Marital status

A couple is still married even though there is a legal separation going on. But when the divorce is finalized, the marriage ends.

Child visits

Visitation rights of the child are decided when the legal separation takes place. If a divorce comes through after the legal separation, most of the times, the same terms are followed as mentioned in the document of their legal separation.

Alimony

The terms for alimony are ascertained during the legal separation. The conditions are typically kept same if the divorce gets finalized in the future.

Split of marital property

The couple agrees to the terms while going for a legal separation. When they do decide to finally divorce, the sane conditions that are mentioned in the document for legal separation are followed.

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

Why Material Disclosure of Assets is Significant in Divorce Cases

Posted by: Gerald A. Maggio, Esq.

divorce mediators in Orange County; California Divorce MediatorsDivorcing parties have a natural tendency to conceal their material assets from their spouse and understate their income. Lawyers across California have faced this problem for many years now. However, disclosure of material assets, facts, income and information in a divorce case has great significance in financial settlements between the divorcing parties. The divorce law in California makes it mandatory for both parties.

The mandate to disclose financial and material information is based on the state’s policy, which aims to achieve the following:

  1. To preserve and protect the community assets and liabilities that are existing at the date of separation to avoid squandering of the assets before actual distribution.
  2. To ensure that sufficient and fair spousal and child support is provided.
  3. To achieve a proper division of community assets and liabilities on the legal separation of parties.

In order to achieve the aforementioned objectives, the family code under California divorce law requires accurate and full disclosure of all assets and liabilities in which the separating parties have interest, regardless of the property being characterized as either separate or community. The separating parties are also required to make a full disclosure of all income and expenses.

The divorcing parties also have a persisting duty to update and augment the disclosures. The purpose of this is to ensure that each party will make the final settlement with sufficient and full knowledge of all relevant facts underlying the divorce case. The separating parties make the disclosure by serving each other with a preliminary declaration and final declaration of disclosure.

The preliminary declaration should be served within 60 days of serving the divorce or separation petition. The declaration is not filed with the court but served only to each other. The declaration lays down the identity of all assets and liabilities, the share of the declaring person(s) in the asset or liability and the characterization of such assets and liabilities.

The final declaration of disclosure should be served at least 45 days before the first trial date. The final declaration includes all material facts and information regarding the characterization, valuation, amount, income and expenses of each party entering into the divorce case. Failure to comply with the disclosure requirements would be considered a breach of fiduciary obligation of the party. The court may sanction the party committing the breach by awarding sanctions and attorney’s fees to the other spouse as observed by section 271 under the California Family Code.

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

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