What is Chapter 7?

Also known as liquidation bankruptcy, Chapter 7 is often the easiest and quickest type of bankruptcy to go through. This form of bankruptcy is suitable for married couples, individuals and business partnerships. Here is how it works: a bankruptcy trustee takes all of your non-exempt property and converts it to cash for distribution to your creditors. However, most people don’t have assets to offer for cash value conversion to pay off creditors, so Chapter 7 Bankruptcy is a great option to offer a fresh start and a clean slate. This will leave you with no personal liability for debts when the completion of the filling is over. However, be aware that business partnerships can’t utilize the discharge—only individuals.

Is it the right choice for you?

By contacting a bankruptcy lawyer, you can get a better answer to this question. But before making that call you can always do some online research and get a good grasp of the question and a possible answer. In an article published by Forbes that examines bankruptcy and divorce the author reminds readers that if the “debtor’s” income is less than the sum to maintain his lifestyle, including debt services, opting for Chapter 7 is a great way to take advantage of whatever homestead and property exemptions the state allows, thus protecting the assets from creditors. If the existence of nonexempt property comes to play, the bankruptcy trustee would liquidate it to pay off the creditors (unsecured creditors included like ex spouses who lack collateral).

The author continues to say that while Chapter 7 is not a means to avoid a mortgage or shirk taxes secured by liens, it does provide a clean slate to the debtor and free their life from harassing consumer debt collectors.

What is involved in the process?

The first thing you need to do is provide all of your identification, such as your Social Security number, driver’s license, a copy of last year’s taxes and a detailed list of your living expenses. This includes clothing, food, utilities, medicine, transportation costs, etc. You also need a list of the creditors you owe money to with detailed dates and amounts. Once you provide your lawyer with these things and the filling has been made, an “automatic stay” will be granted that stops actions from being taken against you.

Moving forward

Although a Chapter 7 is fairly straightforward, having a good lawyer to oversee the process is of great importance to protecting you through the system. Do some research and find legal representation to help you on your way to a fresh start.

Divorce can be one of the most traumatic experiences a human being has to go through. Years of love, trust and intimacy all brushed aside in the name of animosity. Of course, some of us, a lucky few, are civil through these proceedings and the process can be mutually beneficial. Unfortunately, this is an all-too-rare example of divorce; as many of us let jealousy, anger or resentment cloud our judgement and let revenge prevent any hope of a peaceful and speedy conclusion.

There is one thing every couple should think long and hard about either before or during marriage as prenuptial or postnuptial agreements can singlehandedly prevent any unnecessary distress during a divorce. However, many who have been married for years, decades even, would probably not have had the opportunity to consider this option before marriage. In fact, in 2010 in the USA, only 3% of couples engaged in a prenuptial agreement, significantly higher than the 1% cited in 2002, however. The fact is, in the light of a romantic Valentine’s Day proposal and a whirlwind engagement, few consider proceedings post separation. It may not be the most romantic of gestures to get down on one knee, present a diamond encrusted engagement ring; then offer up a contract disseminating assets post separation and insist that your spouse- to-be sign on the dotted line.

Until Death do us Part:

It must be maintained, however, that marriage is a contract. The words uttered at the ceremony are a legal contract entered into willingly by both parties and it should (in certain respects at least) be treated as such.

Now, many couples will have bypassed the honeymoon period; having been married for decades. That’s not to say there is no lasting mutual love and respect in the relationship, but as all things eventually do the relationship has evolved. What is left is a life partnership where financial benefits and economic incentives become the order of the day. Therefore, it is imperative to protect these should anything happen!

Perhaps it’s time to consider a postnuptial agreement. Now, many are probably wondering what these are as you may be familiar with a prenup, but what is a postnup? Well to put it simply, a post nuptial agreement is a prenuptial agreement that is agreed upon, post-nuptially – after the marriage ceremony has occurred.

Perhaps you and your partner married when you were much younger. You were in your 20’s and maybe you had substantially less assets back then. Perhaps, since, you have bought a house, several cars, share investments or maybe even joint-own a business. However, the most important circumstances to consider are of course, when children are involved. Here, a postnuptial agreement will disseminate finances, organise visitation privileges and ensure a divorce will not corrupt the best interests of your children.

A fallacy that needs to be dispelled concerning postnuptial and prenuptial agreements is that they are, in principle a financial doctrine. A contract organised by the rich and famous to ensure entrepreneurial ‘gold-digger’s’ do not take advantage of older millionaires. This is, frankly, ridiculous. A postnuptial and prenuptial agreement can be used for a variety of beneficial purposes. For example, who gets the car, which party would be given what contents of any property, and how things may develop considering pets following separation. Even down to frequency of intimacy, adultery and expectations of behaviour can be documented. Fundamentally, whatever is important to people and their relationship can be discussed in a postnuptial agreement. Therefore it’s time the taboo concerning these generally un-romantic contracts was lifted and people began approaching marriage with more sense than the cloudy, romanticised, hyped-up preconceptions many couples fooli
shly begin with these days. Remember, between 40% and 60% of all marriages end in divorce, and the USA can proudly state the highest divorce rate in the world. Moreover, with divorce rates quadrupling in the last forty years and being two and a half times higher than they were twenty years ago it’s clear they are increasing. Also, consider this: in the USA the average marriage lasts around 11 years according to statistics released in 2010.

The conversation does not need to be an awkward one

The benefit of a postnup over a prenup is fundamentally that married couples, by grace of law, should be more stable than engaged couples or those participating in a simple relationship. Therefore, don’t be shy about confronting the elephant in the room. Present the assets each party has invested and discuss how things may be if things take a turn for the worse. A postnuptial agreement is not an admission of defeat, it’s not a sign of the end for you and your spouse and it is certainly not to be treated with any air of suspicion. It is a sensible, modern contract designed to satisfy the vested interested of each party.

Most couples, naturally, assume that never in a million years will divorce be the order of the day. Couples recently engaged or newly married should assume they will be together forever. However, a report released in 2010 stated that 15% of all divorced couples say they regret not drafting a prenup or a postnup, with a further 40% of divorcees stating they would insist on drafting one if they were to ever remarry. Therefore it is foolish not to consider these documents as a legitimate part of marriage as it could save you years of painful divorce proceedings and allow you to quickly start a new, happy life should the worst eventually happen.

Texas common law marriage is one of those issues that lay people think they understand, but very rarely is their understanding of the law on this issue correct. In this article I will outline exactly what Texas law requires in order for a couple to be common law married.

Requirement #1: Cohabitation

The Texas statute requires that the parties physically reside together. This is by far the easiest of the elements to prove. Rarely is there a dispute over whether a couple actually lived together.

Requirement #2: Agreement to Be Married

This element requires that the parties literally and explicitly agree with each other that they are married. This is not to be confused with discussions of a future time when they will get married. An engagement to be married is not the same thing as an agreement to be married. In the former you are planning to get married at some future date, while in the latter you are agreeing that you are presently married to each other. This is an important legal distinction and this element usually results in a swearing match between the parties, with one saying they had such an agreement and the other denying it.

Requirement #3: Holding Each Other Out as Married

The final element and the one on which most cases hinge is the element of “holding out” to others as a married couple. This can be something as simple as introducing the other person to a third-party as your spouse. Often cases come down to which witnesses the judge believes about this issue. A cleaner and more obvious way that holding out can occur is when a party lists the other person as a spouse on an insurance policy application or they file a joint tax return as a married couple.

So it is much more difficult to be common law married than many people think and requires significantly more than simply living together for some prescribed period of time.

Going through a divorce is an extremely difficult time for everybody involved, and it can be especially stressful and emotionally draining if you have children. If you’re getting a divorce you’re likely to be under a lot of pressure and going through a lot of difficult emotions yourself, and on top of this you’re likely to be worrying about how the divorce will affect your children. Although parental separation and divorce can have negative consequences for children, there is no research to indicate that children of divorce will always achieve less, or are less secure and happy than children of parents who have stayed together. Research indicates that the determining factor is how you support your child through divorce, so that it doesn’t have a long-term negative effect. Of course, there is no right or wrong in this kind of situation, and supporting your children or child on your own can be a very taxing task. This is why a number of charities exist to give both you guidance, and give your children help when going through parental break-up. This article will give a brief overview of a few charities out there.

How does Divorce affect Children?

According to the Joseph Rowntree Foundation short term distress at the time of separation is extremely likely, but this does not have to last and the majority of children do not experience long-term adverse effects. This being said, children who have separated parents are at higher risk of:

• Being in poverty and poor housing
• Being poorer when older
• Developing behavioural problems
• Performing less well at school
• Needing medical advice
• Developing depression and substance abuse
• Becoming sexually active, pregnant or a parent at a young age

What Can You Do?

Children’s charities emphasise the importance of good communication and continued frequent contact between children and parents in the short term experience of divorce. Explanations of why things are happening and where the other parent is going can reassure children both young and old that the parents aren’t ‘abandoning’ children in any sense, and that they still love them.

Support from certain organisations may also be appropriate, as well as keeping your child’s school informed of the situation and being aware of the kind of support they are offering. In the short term, children are likely to experience lowered self-esteem, unhappiness and potentially behavioural problems and problems with friendships. It’s your job to keep an eye out for these things and keep good communication up between you and your child.

Who can Help?

There are a number of charities out there designed specifically to help parents and children during separation.

KidsOut

KidsOut is a charity found in 1999 which has a real focus on bringing fun and happiness into children’s lives through activities. They run a number of different programmes to allow disadvantaged kids to tell their stories, learn new hobbies, or simply have a well deserved day out of fun.

Home-Start

Home-Start is a charity which seeks to support both parents and children in difficult situations in order to ensure children’s welfare. Home-Start can send support workers into people’s homes to encourage better parenting and a happier family life.

Gingerbread

Gingerbread is a charity for single parents which aims to build a society in which single-parent families are “valued and treated equally and fairly”. They have a wealth of advice available to newly single parents.

These are just a handful of the charities out there that are available to help both you and your children as you go through divorce. What’s most frequently recommended is to seek help and support if you feel that you’re not coping. This support could be anything from getting hold of some guidance leaflets to inviting a support worker into your home. However you go about it, the main thing is to be honest, open and communicate well with your children to ensure their future health and happiness.

Going through a divorce can be a difficult time for everyone involved, not just the couple who are suffering. Friends of the couple find it difficult to provide support and care, especially if they are friends with both people in the couple. The couple’s parents may find it difficult to offer advice if they have not been in that situation before. However, when a couple gets divorced the people who can suffer the most are the couple’s children. There is a lot of potential for conflict in the family and, if not handled well, the children can suffer.

In some environments where couples are going through a divorce, children may be subject to lots of arguing and shouting at all hours of the day. While it is easy for the couple to get caught up in their own anger and misery, they must remember that they have children who should not be subject to what they are feeling.

Going through a divorce can even have an impact on older children who live at home. If a child is aged 15 or upwards, a parent may think that they have someone to confide in about their problems. This can turn a child against one of their parents if they only hear one side of the story. Alternatively, the child may feel alienated by both parents as they still love both of them equally but are being pulled in opposite, negative directions.

If a couple is going through a divorce there are many things they can do to keep their children out of it. By working with a family mediation service, the couple can sit down together and talk about their problems and how they are going to work through them to find a resolution. They should also talk about who will care for the children after the divorce and work out a system that benefits everyone involved. If a couple has children who are older they may feel that they should be involved in the mediation service as well to determine what is best for them, but in some cases this is not always appropriate.

Family law firms are available to provide many kinds of support, from mediation services to divorce lawyers. With the help of professionals, a divorce can be dealt with quickly and have the minimum negative impact on everyone involved. The cost of a mediation service is a small price to pay to protect children from such a negative environment.

If you are going through a divorce in Arizona with children, you may be at a loss of what to do. Children are often affected by divorce much differently than the parents who are divorcing. Although the children will probably feel an immense amount of pain, there are some things that parents can do to help them be able to cope with the pain of the entire situation.

One thing that you can do when dealing with a divorce is to learn what you should say to your children and how you should say it. One thing to always remember is to tell your children the truth. While the children probably don’t need to know all the details of the “why” of the divorce, they do need to know the real reason for the divorce. For example, if you don’t get along anymore due to infidelity, they probably only need to know that you are not getting along anymore. Something else that you might want to be sure your children understand is that both parents still love them. They need to know that the divorce isn’t between the children and the parents, and that both parents will still support, love, and care for the children, just like before. When talking about divorce children, parents should try to stay as united as possible. While there might be some underlying pain and unanswered questions, the children need to know that both parents want what is best for them. The divorcing parents will probably need to come up with a plan or agreement dealing with the children, and the children should know about it so that they have something solid to hold on to. While you might feel that your spouse mistreated you, they are still the children’s parent and you should always be respectful when you talk about your spouse with your children.

Another thing that you can do when dealing with divorce that involves children is to try to create as stable an environment as possible. Children are typically pretty flexible, but with their entire world being torn apart, they will need something to hold on to. Creating some regular routines at each parent’s house is a good idea to help the children feel comfortable and safe.

Many people focus all of their time on the children when they are going through a divorce in Arizona with children. While it is important to take care of your children, you cannot always properly do that if you don’t take care of yourself first. Your kids can learn a lot when they see you taking care of yourself so that you can take care of them as well. Not only will they learn to take care of themselves as well, but they will probably have a happier, more content parent to deal with.

In 2011, researchers found that over two thirds of people do not make a will. They do not appoint their assets to anyone, leaving the government to manage their affairs. If someone has not made a will it can often cause huge arguments in a family over who is entitled to what, especially if there is a lot of money and property to be divided between several people. Making a will can be a very simple process so it is surprising that each year there are still hundreds of thousands of people who must decide what happens to an estate when someone has died, particularly if they have died unexpectedly.

A person should always make sure they appoint a lasting power of attorney in case they suffer an accident or fall ill so there is someone they trust making decisions for them instead of potentially relying on a stranger to do the right thing. If a person has not made a lasting power of attorney and that person loses their memory or becomes seriously ill, there will not be an appointed person to make decisions for them.

If a will has not been made then the probate office will appoint a representative to be an executor. The probate registry rules state that a person’s spouse should be appointed as the personal representative if they are able and willing to do so. If they are not able to, then the job will fall to the children of the deceased person. The children will be in charge of dividing the assets and paying off any debts that the deceased has left behind. In the event that neither the spouse nor the children are able or willing to be in charge, another relative or close friend will be appointed by the probate office to handle the affairs of the deceased person.

By making a will, a person can decide what they want to do with their assets and who they want to be in charge of them. They can decide who should get what and do what they think is fair for everyone. Although responsibility is likely to fall to someone close to them even if they have not made a will, the process is made much simpler for their spouse or children if they have already created a will and they can simply follow the instructions instead of worrying about the right thing to do.

Servicemembers Civil Relief Act

Under the provisions of the federal Servicemembers Civil Relief Act, a court can delay legal proceedings for as long as a service member is on active duty and for up to 60 days thereafter. This includes a divorce.

Service and Jurisdiction

Even getting a divorce on filed and moving forward can be a bit tricky if one party is in the military. An active duty spouse, like any other spouse, must be personally served with the divorce documents in order for the state court to have jurisdiction over him or her. A spouse serving overseas and/or deployed will be nearly impossible to serve. They can voluntarily accept service but if they do not, you may have to wait until they return stateside to start the divorce process.

Residency and Filing Requirements

Military members and their spouses will generally have three options for where to file for divorce:

• State where the spouse filing resides
• State where the military member is stationed
• State where the military member claims legal residency

Property Distribution (including Pensions)

Division of marital assets and debts typically depends on whether the jurisdiction applies community property or equitable distribution theories, and whether there was a prenuptial agreement. Division of retirement accounts and benefits is handled in the same manner and is usually divided by use of a Qualified Domestic Relations Order (QDRO). A military pension, however, is handled differently and is governed by the Uniformed Services Former Spousal Protection Act. The USFSPA authorizes direct payment of a portion of a military retirees pay to the former spouse and extends some base privileges to certain former spouses.

The military pension can still be considered separate property or partially separate (non-marital) property, depending on the date of marriage, date of accrual and state law. Up to 50% of a service member’s retired pay may be awarded to the other party in a divorce. State law  (and the court) will determine the exact division of the retired pay. The award must be couched in terms of percentages as opposed to specific dollar figures.

USFSPA permits a former spouse to receive his or her percentage of the retired pay directly from the finance center, based on the number of years married concurrent with military service. The computation of the total amount of retired pay attributable to a service member is made based on his or her rank at the time of retirement, not at the time of divorce.

Former Spouse’s Military Benefits

Under the USFSPA, a former military spouse may be eligible for full military medical, commissary and exchange privileges after a divorce. In order to qualify for said benefits, the marriage must have lasted at least 20 years; the service member spouse must have served at least 20 years of service creditable for retired pay and there was at least a 20 year overlap of the marriage and the military service (i.e., if a 45 year old soldier retires after 20 years of service and then marries, his wife would not be eligible for these benefits if they later divorce at age 65).

And if the spouse remarries, eligibility for these benefits of a former military spouse is terminated. The benefits are, however, revived if the subsequent marriage ends in divorce.

Child Support and Spousal Support

Determination of spousal support and child support in a case involving military pay can also be a bit more complicated than the norm. In addition to salary, any support calculation must take into account military allowances for quarters, rations, COLA and specialty pay.

All military members have a duty to provide support for their children, as well as their spouses, so the military quite simply allows wages to be garnished in order to ensure the payment of proper support.

Each branch of the military has its own rules which specify or suggest certain amounts for spousal support and child support. It is only the court of civil law that can grant the divorce and establish a legally enforceable support order.

Any military or non-military spouse contemplating divorce or other family court action is best-advised to seek assistance from a divorce attorney with experience handling military cases.

Tip: When considering how to divide the marital assets and debts during a divorce, you need to know which of your assets and debts are considered marital and which are considered separate (regardless of whether your state follows community property laws or equitable distribution laws). This is important because marital assets are subject to division; separate assets are not.

Separate Property vs. Commingled Assets

Because inheritances are treated as separate property belonging to the person who received the inheritance, those assets may not be divided between the parties in a divorce. If the funds are commingled with other marital assets, however, such that they become virtually indistinguishable from marital assets, the family court will likely NOT consider the inheritance amount to be separate, non-marital property.

For example, if the inheritance is deposited into any joint account along with other joint funds or if it is used to purchase or make improvements to the marital home, it will probably lose its separate property status and will be subject to equal or equitable division upon divorce. Similarly, if one spouse inherits a piece of real estate and marital funds are invested to improve the property, it may be considered marital property.

Inheritance Received Prior to Marriage

The same is true of an inheritance acquired prior to the marriage. It will be considered separate property unless and until it is commingled with joint assets during the marriage (either by adding marital funds to the inheritance account or by using the funds as described above).

If inherited assets are kept separate but appreciate in value during the marriage, the non-inheriting spouse may have a legitimate claim to a share of the increased value (but not to the principal).

Many spouses-to-be with substantial inheritances will choose to execute a prenuptial agreement to make all issues regarding pre-marital, separate property perfectly clear prior to the marriage.

Inheritance Impact on Support

One other way in which an inheritance can impact a divorce is in the support arena. If a spouse has a large enough inheritance that pays regular distributions or dividends, those amounts can be considered income for purposes of determining spousal support and child support.

Future Inheritance

We often hear questions regarding the expectation of inheritances after a divorce. If one spouse expects to receive a substantial inheritance in the not-so-distant future, it can often be difficult for the other spouse to swallow an equal division of marital property. However, speculation as to future inheritance is just that – speculation. The bequeathing party might not pass away for many years. The inheriting spouse might die before the bequeathing party. The will can be changed; the trust can be changed.

The court will not consider the spectre of future income via inheritance when establishing support orders (and dividing property in an equitable distribution state) because of the indefinite nature of the financial situation.

The IRS does not allow for a single exemption to be “split” between the two parties in the same year. You can take turns claiming the exemption by swapping out years but one custodial parent will have to sign IRS Form 8332, releasing their claim on the exemption for any year the other custodial parent claims the exemption (and vice versa). Or if there are two children, for example, each parent could claim a different child. Mom can claim one and dad can claim one. (As the children reach the age of majority and/or emancipation, the parties can agree to begin alternating the exemption as outlined above.)

In general, the IRS allows the parents to agree who can take the exemption when both parents meet the qualification requirements, such as in the case of joint physical custody. If the parents cannot agree and the child lived with both parents the same amount of time, then the IRS will grant the exemption to the spouse with the higher adjusted gross income (AGI) and disallow the claim on the other parent’s return. If the parents cannot agree and the child lived with one parent even slightly longer than the other, then the IRS will grant the exemption to that parent and disallow the claim on the other parent’s return.

It should also be noted that other credits such as the child tax credit, earned income and deductions for child care expenses can only be taken by the parent claiming the child as an exemption – these cannot be divided between the parents.

It is unusual for a court to order joint physical custody unless the parties are in agreement, so it is not something that a court will resolve on its own. The income tax exemption is generally something that is covered in a settlement agreement when the parents resolve any custody issues.