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Daniel and Miranda’s biggest arguments revolved around money. As their debts piled up, creditors called daily and their relationship suffered. They reached a certain point where they began to consider filing for bankruptcy and filing for divorce. However, they needed to consider the effect of bankruptcy on divorce before taking any action. Continue reading
In a previous blog, we talked about finances for women going through a divorce. Now, it’s the men’s turn. The divorce experience is as different for men and women as, well, men and women. Nowhere is that more apparent than in family finances. Even though men tend to fare better financially than women post-divorce, it is still important to consider some financial tips for men who are going through a divorce.
It may be difficult to negotiate a reasonable divorce settlement if you don’t know what’s involved. What bank accounts do you and your spouse have? How much debt do you have? Did you or your wife take the leading role in financial decisions. Make sure you know where you stand.
At this point, don’t worry about whether it is community property or separate property. Account for cash, bank accounts, real estate, personal property, and other assets. Prepare a list that is as complete as possible. Then put it in a safe place.
Some men resist paying spousal support. The reasons vary. Sometimes the husband took a greater role in financially supporting the family while the wife focused on home and children. Others may be worried they won’t have enough money to live on.
Some men resist receiving spousal support. In divorce cases where the wife makes more money than the husband, or where the husband takes an increased child custody role, the wife may pay spousal support to the husband.
Whether you will pay and how much depends on a number of factors. The judge hearing your divorce case will enter an order for one or both parents to provide a certain amount to cover a child’s living expenses.
Make sure you provide complete and accurate financial disclosures. The court will consider both parents’ net disposable income when deciding on child support.
Depression or even a sense of freedom sends some men over the financial deep end. This may not be the best time to buy a boat, go to Vegas, or move cross country. If possible, wait until after the divorce is final before making any big decisions.
Marcia’s career skyrocketed during her seven year marriage. In fact, she had become the couple’s primary source of income and handled all financial matters. Brittany had decided to provide 24/7 care for the two children she and her husband had during their five year marriage. And Sandra worried that her divorce from Rick after 22 years of marriage would leave her destitute. She had never worked outside the home and trusted her husband to make financial decisions. Though their lives are very different, each of these women would benefit from learning some financial tips for women going through a divorce.
As soon as possible, start looking over your financial accounts and property owned. You can do this before you file the divorce petition or if you even suspect your spouse is considering divorce.
For women who did not participate in their family’s financial decisions, this step may be difficult. They must learn how to handle finances on their own sooner rather than later.
Most women find their credit is intertwined with their husband’s. Some may find it difficult to get a credit card or sign a lease within their husband’s backing. You can take the following steps as you prepare to be single again:
Building your credit history takes time. It may be particularly tough for spouses who have given up a career to care for children.
In addition to their own concerns, some women may have to worry about providing for their children, supporting themselves after years of being out of the workforce, or having a short window of time to rebuild retirement accounts.
Your divorce attorney can help you get through the financial maze. Please call us at (415) 293-8314 to schedule a confidential appointment with one of our attorneys.
Ms. Burger is a California Certified Family Law Specialist and founder of the Law Offices of Judy L. Burger. We assist clients in California’s Northern to Central Coast, including San Francisco, Gold River, Santa Barbara, Ventura/Oxnard, and surrounding communities. Our new Beverly Hills office will be open soon.
Jordan and Hailey met and married while both were freshmen at Sacramento State. Unfortunately, the marriage ended after two years. Both were still in college. As their divorce progressed, they ran into some issues regarding their student loans. They learned that debt is handled differently when students divorce or when student loans are involved in a divorce.
Typically, most debt incurred during a marriage is community debt that is split between the spouses. There are exceptions, and other factors to consider, but this is the general rule of thumb.
For example, Jordan uses the couple’s credit card more than Hailey does. When they divorce, however, it is possible that Hailey will be forced to pay half of Jordan’s credit card debt.
But that’s credit card debt. What about debt related to education?
Debt incurred for education or training is handled differently that other debt. Student debt acquired before or during a marriage is the separate debt of the spouse that incurred it.
Our star-crossed couple, Jordan and Hailey, both took out student loans. Some of the loans were taken out before the marriage and some during the marriage. Jordan most likely will pay his loans only. The same is true for Hailey.
Even so, there may be exceptions to the ‘student-debt-is-separate-debt’ issue when it affects the community estate.
According to California law, community contributions for one spouse’s education or training may be reimbursed if the training enhanced his or her earning capacity. The same may hold true for repayment of loans for education or training.
However, reimbursement may be limited or eliminated if:
The parties may agree to different settlement amount.
Bill and Marcie decided to end their stormy 13-year marriage. After Bill filed the divorce petition, he and Marcie started negotiating the final divorce settlement. One of the first things they did was to divide their bills and household expenses. Bill became concerned when he started receiving late notices from utility companies and the mortgage company. Marcie was living in the house, so he felt she should be paying all the household-related bills. But Marcie felt like Bill had always paid the bills and, as primary breadwinner, should continue doing so. They took the issue to their respective attorneys.
As couples head toward a negotiated divorce settlement, decisions are made about marital property. Debt is also divided along community debt and separate debt lines. Those lines can be a bit vague until the settlement is final, but the bills still keep rolling in.
If possible, both spouses could cover the bills by:
Each party should retain receipts of any bills they pay.
Spouse often keep joint credit cards. Typically, the balance due at date of separation may be considered to be marital debt owed by both parties. Sometimes people cancel joint credit card accounts so that one spouse does not run up a bill while the divorce is pending. However, if one spouse does use the card inappropriately, the other can ask for reimbursement.
Decisions about community debt and separate debt may be made on a case-by-case basis. For example, if Bill uses the joint credit card to pay expenses for the home that Marcie is still living in, it may be considered joint debt instead of Bill’s separate debt.
Sometimes one spouse is unable or unwilling to pay their fair share of the bills. In that case, the other spouse may pay the bills and request reimbursement. This may include situations where one spouse is living in the marital home while the other spouse pays the house-related expenses.
Mortgage companies, financial institutions, and landlords still expect to get paid. That’s reasonable. A party that is unable to pay a fair share of the expenses may ask the court to order the other spouse to temporarily pay them. For example, Marcie may ask a judge to order Bill to continue paying expenses although he is no longer in the home.
In situations where the couple leased or rented a home, things can become more complicated. Did both spouses sign the lease or only one? Did one spouse sign the lease, but now the other spouse is living in the leased property? The party or parties that signed the lease are still responsible for paying the lease. It’s best to discuss these situations with your attorney.
Protect yourself. Gather your bills and address their payment before late notices pile up.
The attorneys at the Law Offices of Judy L. Burger are experienced at all phases of divorce proceedings. Call us at 415-293-8314 to schedule a private appointment or visit our website. We maintain offices in San Francisco, Marin County, Oakland, Santa Barbara, Ventura/Oxnard, San Jose, Gold River (Sacramento), Roseville, and surrounding communities.
Spouses sometimes come into a marriage with debt and also separately incur debt during the course of the marriage. Sometimes these liabilities are known by the non-incurring spouse, and sometimes they are not. The basic rule in California is that both parties are liable for any marital debt accumulated during the marriage but before separation. This is true whether or not one of the parties even knew it was incurred.
Debts owed by a party prior to marriage, known or not to the spouse, are not the debt of the non-incurring spouse. At the time of a divorce, community property—property accumulated during the marriage—is used to satisfy community debt. If there is not sufficient community property to satisfy the debt, then both parties are assigned a portion of the debt to be paid from their own funds post-divorce.
Couples can sign pre-nuptial or post-nuptial agreements that allow debts incurred during marriage to be treated as separate debts under certain circumstances. For example, they might agree that a debt incurred unilaterally, with only the incurring party’s income and liabilities qualifying for the debt, is the separate debt of that party. Such agreements must be drafted carefully to ensure they are legally defensible if that becomes necessary.
Debt incurred by a spouse after separation but before divorce is that spouse’s debt, and the other spouse is not liable from her separate funds or her share of community property. There is but one exception to this rule: when the debt is incurred to provide the “necessaries of life” for the debt-incurring spouse and the separation is not by formal agreement.
If you need assistance in a family law proceeding, you should consult with an experienced California lawyer, especially if there are significant questions of debt and property ownership. The attorneys at the Law Offices of Judy L. Burger will provide authoritative legal support tailored to your specific situation. Make the call today to learn how our attorneys can help: (415) 293-8314.
California is a no-fault divorce state, but that does not mean that extenuating circumstances existing in a marriage cannot be taken into consideration by courts. Substance abuse and alcoholism are factors that can affect custody and visitation rights, as well as division of marital assets, and even alimony. A party to a divorce who suffers from substance abuse or alcoholism is at a significant disadvantage in the proceeding.
The most common effect of a party’s substance abuse problem is an adverse effect on child custody and visitation rights. Courts are bound by law to make such decisions in the best interest of the child, which I discuss in detail in an earlier blog.
When one or both of the parties are known to be substance abusers, custody and visitation must be structured to mitigate possible negative consequences to the child. A court even has the power to order periodic testing to ensure that a parent complies with an order to remain drug-free.
In rare cases, a court may find that one spouse’s substance-induced behavior during marriage depleted marital assets. Excessive use of marital funds to support an addiction, for example, could result in that party’s share of property distribution being reduced. The same analysis may be applied to the granting of alimony. If the addicted spouse has depleted marital assets to support the addiction, additional alimony could be awarded. More often, parties with such problems will settle for less favorable terms than the law may allow in order to avoid the notoriety a court proceeding might bring.
Establishment of a party’s substance abuse problem by the court is necessary before it can be considered for the mentioned purposes. One party may raise the issue, or it might become known to the court in other ways. Family members, representatives of the state Department of Social Services, or other interested parties might inform the court of a potential addiction or abuse. When the latter occurs, it is normally in relation to custody and visitation determinations.
Once the issue is raised, the court may order an evaluation or investigation to determine the validity of the report. This could involve consideration of existing records of substance abuse or the appointment of an investigator to determine the validity of the report and its potential effect on custody and visitation.
The final impact on custody and visitation orders varies, depending on the extent of the problem. In very extreme circumstances, a parent could be denied any share of custody or even visitation, or the court could order limited and/or supervised visitation. The court has wide discretion in determining what is in the best interest of the child.
The health and well-being of your children are important not only to you, but to the State of California. If your partner has a substance abuse or addiction issue, you need an attorney to fight for you and your children. The attorneys at the Law Offices of Judy L. Burger have extensive experience in divorce, child custody, and child support matters. Make the call today to learn how our attorneys can protect you and your children: (415) 293-8314.
A common question when divorce or legal separation is being contemplated is whether a professional license or college degree can somehow be split among the parties. This question is particularly common when one spouse worked to enable the other spouse to go to college or to obtain an advanced degree. While neither a degree nor a license is property subject to division, under California law, the marital community may be entitled to reimbursements for payments made toward education or training. Of course, no reimbursement will be ordered if the parties agreed in writing, such as in a prenuptial agreement, that none would be made.
Several issues are presented when one of the parties to a marriage receives education or training during the marriage or when the couple pays back student loans during the marriage, including the following:
The first issue is whether the community has a claim of reimbursement from the spouse or partner who received the training or education. If educational expenses were paid out of community funds, reimbursement, with interest, will be ordered if the education “substantially enhances the earning capacity of the party”. If circumstances would render reimbursement unjust, it may be reduced or modified. Those circumstances include the following:
The second issue is how any unpaid student loans will be allocated. Generally, the law provides that outstanding loans shall not be classified as community debt but shall be allocated to the party who received the education or training. Of course, to the extent this is done, it may offset a portion of the community’s right to reimbursement. See our separate blog here for a general discussion of community debt.
The final issue is the extent to which a spousal or partner support award should be impacted by the additional education or training. The California Family Code provides that several factors are considered in rendering such an award. These include each party’s earning capacity, as well as the extent to which one party contributed to the education or training of the other. An experienced family attorney will recognize these implications to the attainment of a degree or license and will position her client favorably in obtaining a support award.
As you might imagine, how these matters are presented to a court can make a significant difference in both the issue of reimbursements and in a spousal or partner support order. Judy L. Burger has the experience you need to identify and present issues in family court. Contact her today at (415) 259-6636 to learn more.