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Bankruptcy During Divorce: How They Interact

If you need to file for divorce, you might be understandably hesitant to see what the future holds for you. Regardless, you have it under control and you can get through it. Or maybe you need to file for bankruptcy? It is an intimidating process that can be rife with complications but, once again, it is nothing you can’t handle. But what happens if you are going through a divorce and need to file for bankruptcy? Now things are getting trickier.

How to Reduce Your Filing Costs

Many people who were in a financially stable position are actually driven towards bankruptcy as a result of divorcing. Others are already in financial straits before divorce is brought up. In either situation, going through bankruptcy before finalizing your divorce could potentially save some money.

If your soon-to-be ex-spouse files for bankruptcy with you, it can count as a joint bankruptcy filing. This will essentially save you 50% on bankruptcy filing fees because it is just one process, rather than two separate ones. Deciding to stick together one last time to complete a joint filing can also make debt division and property distribution much easier since everything that could be collected by creditors in your bankruptcy will already be gone and not pending division. On a more positive note, a joint filing often doubles the exemptions granted to the bankruptcy petition, allowing you to keep more of your property than if the both of you filed separately.

Fast & Slow Bankruptcies

You must also consider which form of bankruptcy you are going to use to resolve your debt issues. If you are filing for Chapter 7, sometimes called liquidation bankruptcy, it could be over within the year, so you could file for bankruptcy first, complete it, and then divorce without dragging things out for an extended period of time. On the other hand, Chapter 13 bankruptcy always relies on a debt restructuring plan that is paced out over three to five years. If you are planning on divorcing and need to use Chapter 13, the divorce should come first, or else youwill be waiting a couple years at least.

Passing the Means Test Due to Divorce

Chapter 7 bankruptcy is a powerful tool that can wipe out huge portions of debt entirely. In order to make certain the people who really need it are the ones who use it, a means test is required for eligibility. Petitioners who make more than the average household in their state, based on annual incomes and earnings, will fail the means test and cannot use Chapter 7 bankruptcy.

How does divorce relate to the means test? If you aren’t divorced and file a joint bankruptcy, your combined incomes may cause you to climb over the statewide average, and you may fail the means test. If you finish your divorce first, you can file separate bankruptcies and only your income will be measured; feasibly, this could cause you to drop under the average and pass the means test, enabling Chapter 7 bankruptcy.

Sort Through the Complications with Confidence

In all the many ways that divorcing can affect bankruptcy, and vice versa, the common theme is intricacy. You will need to know what you are doing, where your end goal remains, and how it is going to affect your family. Let Holstrom, Block & Parke, APLC and our Southern California divorce attorneys be the ones to help you make sense of the complexities and make the decisions that benefit you most.

300+ years of combined legal experience can be on your side – contact us today.

Divorce / Financial Help

How to Make a Prenuptial Agreement in California

Premarital agreements – sometimes called prenuptial agreements – are supposed to help married couples avoid unnecessary conflict if they ever decide to divorce. Planning out what will happen with marital assets and responsibilities ahead of time should, in theory, save time and money. However, just bringing up the idea of premarital agreements can spark heated debates and arguments that lead to serious family law disputes.

In order to try to prevent these preemptive conflicts, California adopted its own set of prenuptial agreement laws and rules based on the Uniform Premarital Agreement Act. This legal act paints a clear picture of what is and what is not allowed for a premarital agreement to be acceptable in court.

Main components of the Uniform Premarital Agreement Act are:

  1. Full disclosure: Marital assets and separate property cannot be properly divided or protected if they are not fully understood. Each spouse needs to make full disclosure of their finances, property, debt, and any other piece of property that could be pertinent in the divorce process. Hidden assets will inevitably be discovered, and the spouse that tries to hide them may lose credibility for doing so.
  2. Financial advisors: Although not necessary, in some cases involving significant amounts of finances or assets, each spouse will be advised to consult a financial advisor while drafting their prenuptial agreement. This will act as an additional safeguard against unfair or unbalanced divisions, as well as reducing the risk of inadvertently hiding an asset.
  3. No duress: Any evidence of emotional or mental duress, or even physical intimidation, cannot be present when a premarital agreement is signed. People who are under stress to may not be able to make sound decisions, even if explanations and evidence are laid out clearly in front of them. If such duress exists, the signing must be postponed pending further review.
  4. Premarital: It may seem self-explanatory but a prenuptial agreement needs to occur before the marriage becomes official. This clause is meant to clearly differentiate premarital agreements from postnuptial ones.

Retain Separate Counsel to Protect Your Best Interests

California’s own draft of The Uniform Premarital Agreement Act requires that both spouses use separate counsel when creating a prenuptial in order for many of the common provisions to be considered enforceable. With a family attorney of your own guiding you through the process of drafting the agreement, you can rest easy knowing that you won’t be making any major oversights or mistakes. As with any legal process, having a friend in the court or conference room can be a boon.

You can contact Holstrom, Block & Parke, APLC and our divorce attorneys in Southern California if you need to make a premarital agreement. We will bring more than 300 years of combined family law experience to your case, working diligently to always protect your best interests.

Divorce / General

Can a Couple Use the Same Lawyer for a Divorce?

Going through a divorce is going to cause some ripples in your life and probably some troubles and frustrations. If you want to do everything you can to eliminate as many obstacles as possible, can you and your soon-to-be ex-spouse agree to use one divorce attorney for each of your legal counsel? In most cases, the answer is no.

Oppositions & Conflicts of Interest

Even if your divorce is uncontested, meaning you and your spouse agree on all the important terms and conditions, you are still both technically on opposing sides of the courtroom. Any attorney that represents one of you will not be permitted to also represent the other because this would create a conflict of interest. Imagine how absurd it would be for both the defense and prosecution to be handled by just one lawyer; family law courts would see the same absurdity in a case where two spouses shared one attorney. Basically, if there is a possibility of a serious conflict of interests, any decisions or agreements made could be subject to undue influence, and the court can’t accept it.

Divorcing with Neutrality

You cannot go into court both sharing one attorney, but what if you don’t rely on the courtroom to settle your disagreements? If you decide to use mediation and come up with a divorce agreement in a conference room instead of a courtroom, you are looking at an entirely different legal situation than before. During mediation, you can use one attorney, but that lawyer isn’t representing you or your ex-spouse. Instead, the family lawyer overseeing your mediation acts as a neutral party that helps each but fights for neither.

The responsibilities of an attorney-mediator include:

  • Explaining the nuances of family law
  • Ensure all paperwork is completed accurately
  • Checking finances for full disclosure
  • Discuss potential points of contention
  • Ease tensions and encourage collaboration
  • Draft final divorce settlement agreements

Remember that an attorney-mediator is working in total confidentiality and not technically for either spouse. If you want them to testify in court later for you, there is nothing that says they have to. In fact, most won’t and the court won’t want them to because that would create a new conflict of interest.

If you think that mediation might be the solution you are looking for in your divorce process, contact Holstrom, Block & Parke, APLC. Our divorce lawyers represent clients all throughout Southern California and bring 300+ years of total family law expertise to each case we handle. We look forward to helping you.

Divorce

Protecting Your Business Assets in a Divorce

Decades of hard work can go into the creation of a successful business and when a divorce puts your assets at risk, it can create a significant threat to your livelihood. Even if a company was founded before a marriage, your spouse may have legal grounds to claim that your business should be counted as community property. California’s laws regarding the division of property state that each spouse must receive an equal share of marital assets. If you do not take legal preparations, your business could take a substantial hit. Below, our blog outlines several strategies that you can use to safeguard your business interests in the event of a divorce.

  • Prenuptial and postnuptial agreements: If your business was created before a marriage, protect it by naming it as separate property in a prenuptial agreement. Similarly, you can protect a business that was created after a marriage through the use of a postnuptial agreement. “Postnups” have the greatest chance of success when written well before a divorce is ever on the horizon. These agreements can state early on what portion of a business if any a spouse may be able to claim upon divorce.
  • Give up other assets: The laws in California dictate that the total value of assets received by divorcing spouses must be equal. As the owner of a company, you may be able to retain control of your business if your spouse receives equal compensation through other assets. You may consider sacrificing your claim to any sizable investment, retirement, or insurance accounts in exchange for your business assets.
  • Separate business and personal finances: While assets that were acquired or created before a marriage are typically considered separate property, investing marital assets into an otherwise separate business, which is regarded as commingling assets, can cause complications. separate business (this is called co-mingling assets) can introduce complications. For example, if a business owner were to use shared income to purchase company supplies, a spouse can claim that part of the business has undergone transmutation by becoming community property. Maintaining complete and accurate records of all business-related transactions can help to substantiate your claims in the courtroom.

Help for Business Owners Working through Divorce

When it comes to protecting your business interests in a divorce, it pays to take legal action as soon as possible. If you are currently working through or anticipating the end of a marriage, do not waste any time in contacting Holstrom, Block & Parke, APLC.

Our Southern California divorce attorneys have substantial experience representing clients in high-asset divorce and understand the unique problems you may face as a business owner.

Call (855) 939-9111 and schedule a free phone consultation to get more than 300 years of collective experience in your corner.

After Divorce / Divorce / Money, Property & Support

Custody Of Special Needs Children

What If My Child Has Special Needs?

Going through a child custody fight is a battle in and of itself. That battle is only intensified when the child has physical impairments, cognitive deficits or other challenges. A special needs child may require additional financial support, and meeting the child’s various needs can be a significant burden for parents.

There are many issues with a special needs child that are just not a factor in a typical custody battle. Access to any special medical care or child care resources must be taken into consideration, as well as the functionality of the child. Another point that will need to be considered is time. Managing a child with special needs can be very demanding and will require more time and resources from parents. The court will need to weigh all of these issues before determining custody.

Our Riverside Family Law attorneys at Holstrom, Block & Parke are experienced with child custody matters involving special needs children. Whether you are the primary caregiver looking for help to meet your child’s needs, or the non-custodial parent trying to avoid overwhelming child support, we can help. Call us at (855) 747-6225 or send us an email.

What Are The Challenges Of Custody With A Special Needs Child?

There are several unique challenges that apply to a custody matter involving a special needs child. Each child’s special needs deserve special consideration when developing a parenting plan that is in that child’s best interests. While legal custody relates to a child’s education, healthcare, and decisions of that nature; a more detailed plan must be formed in order to account for any special education or services needed by your child.

Joint physical custody may be difficult for special needs children who thrive on routine. Picking them up and changing their environment every few days or weeks can sometimes do more damage than good. Many times, the parent who is not granted physical custody can be hit will extreme child support payments, since raising a child with special needs generally involves more costs than raising a “typical” child.

Our attorneys are familiar with all these issues. We can help make sure that all your child’s needs are met after divorce, from quality time with both parents, to making sure that financial needs are met. Call our Riverside office today at (855) 747-6225 or send us an email online.

Child Custody / Divorce

Divorce Finance: Staying Ahead of The Game

If you’re like Amy Koko, author of Ex Wife New Life, the end of your divorce may have caused some serious financial confusion. There are attorneys who, unfortunately, don’t assist their clients and prepare them for their financial future properly.

If that’s you, do you remember what it was like trying to adjust your life to your new financial situation? (We know some people don’t need to adjust at all, but that isn’t always the case.) You may have had to cut back on your groceries, your gym membership, clothes for your children, etc. It can be a serious challenge that you may not have been prepared for.

Koko states that for women (or men) living on alimony, there are two things they’ll need to understand. The obvious is the financial planning element: knowing your situation and adjusting your spending accordingly. The other less obvious barrier is coming to terms with the fact that you still financially depend on someone you’re no longer married to and probably don’t love anymore.

All financial plans and settlements are different, and it’s important to have a firm understanding of your finances as they are currently and as they’ll be in the future. Divorce is confusing enough, and you don’t need money to be another form of confusion.

Remember: alimony is taxable! Some women, like Amy Koko, find this out the hard way. If your ex was doing your taxes throughout the marriage, it might be quite overwhelming to try to tackle them yourself now that you’re divorced or separated. We usually recommend working with a financial advisor at least the first year on your own to make sure you’re on track.

Koko also provides an interesting outlook on being financially dependent as a divorcee. She states that if a company employed you and financially and you were dependent upon that company for 30 years, you’d have no problem leaving with a great financial package (i.e.- retirement). That’s how you can look at alimony: you earned it.

Divorce / Financial Help

Divorce FOR The Kids

“I stayed with him for our kids” is an expression we’ve all heard. Most people can agree that a family with two parents is the ideal situation, but does that principle stick for a family with two parents who are only together for their children?

Nancy Pina recently wrote on YourTango that divorce might actually be a terrific thing FOR your children. She gives three reasons that we’ve listed below:

  1. You’re creating a negative “norm.” A relationship without love that is lasting “for the kids” is setting a poor example and standard for your children. They will naturally grow up believing that an unhappy marriage may be inevitable. Instead, divorcing sets the standard that they should be in love to be married. And it will ensure they don’t take the marriage vows until they’re as confident as they can be that the love the have will last a lifetime.
  2. Staying in an unhappy marriage will break you. Trying to “act” in love/happy in front of your child is more emotionally exhausting that one can imagine. It takes a great deal of energy to try to sustain the façade that you’ve created surrounding the most important people in your kids’ lives. Living in an unhappy marriage and having to hide that publicly will undoubtedly create emotional turmoil within, and you may take that out on your kids. In a way, you’re “blaming” them internally and making them the “reason” you have to stay in your marriage. That’s not true and it’s unfair to put that blame on them.
  3. Staying in a loveless marriage will make it difficult to show your kids proper love. To pour out on other people the affection and emotion they deserve, you need to be filled up emotionally in return. Acting as if your spouse loves you and visa versa is not only exhausting, but you won’t be satisfied emotionally. Divorcing may be the only answer to find inner peace and another shot at love.
Child Custody / Divorce

Dying Before the Divorce is Final

The purpose of this week’s article is to reveal the potential problems that can arise, without the proper planning, when one spouse dies during the divorce process. Yes, death is a difficult topic to address, especially when coupled with divorce. But, the hard truth is that ignoring it does not make it go away. In fact, it’s likely that so many of this article’s readers are often confronted with the following recurring, nagging thought: “Tomorrow, yes tomorrow, I’ll put my will together.” Sadly, many people never get around to having their will drafted. And, as a result, the distribution of their estate may be averse to their unwritten wishes. In simpler words: Your coin collection, 69’ Camaro, and 5 acres of land in Arizona may not go to your son. In fact, if you are in the middle of a divorce, and you die without a will reflecting your current wishes, your soon-to-be ex-spouse could likely acquire the gifts you wanted to give to others.

It’s important to look at a few things here to set the groundwork. First, generally, a divorce in California takes six months and day for the couple to be “legally” divorced. So, after one spouse files a petition with the court to initiate the divorce, the spouses are now involved in a “dissolution proceeding.” This means that during these six months, and very often longer, the spouses are seeking assistance from the court. This assistance includes such things as temporary spousal support payments, temporary child support payments, and even requesting that the other spouse pay for attorney fees. All these mini-trials along the way occur before the divorce becomes final.

So, the salient question is—“What happens if I die after the divorce proceeding has begun but before the divorce is final?” Ready for this? Generally, it’s the same as dying like you are still happily married. This truth should be a great motivator for people to confront the reality of death and the increased hardship it can cause during divorce without the proper planning.

First, if you don’t have a will, or you had your will drafted before the divorce proceeding, visiting an attorney’s office to help you draft a new will is an important step to help ensure that your property, like your 69’ Camaro that you purchased before the marriage, will be given to your brother, not your soon-to-be ex-spouse.

Next, if you and your soon-to-be ex-spouse own a home together, it is likely that you and your spouse took title to the home as either community property with right of survivorship or as joint tenants. If so, it’s important to know the effects of holding title like this. Generally, and to keep this simple, it’s easy if you picture ownership as each spouse owning his/her own 50% of the house. And, if the spouses hold title in one of the two forms mentioned above, then when one spouse dies, the other spouse will take the other half of the house, thus becoming 100% owner. (Of course, there are a few papers to file with the court, but these filings are a topic for another article).

So, if you die before the divorce is final, generally, (without discussing the complexity of bifurcation issues), your soon-to-be ex-spouse may take your 50% of the home. Go figure. Usually not what people expect when seeking a divorce. So, it’s crucial to discuss with your attorney the possibility of changing your 50% interest in the home to tenants in common, which is another way to hold title to a home. This could prevent your soon-to-be ex-spouse from getting your 50% interest in the home as a result of your death.

In short, working with your divorce attorney as well as an estate planning attorney can protect many of your interests during the divorce. And, because these issues are complex, your attorney can help provide the proper guidance, like, in addition to helping you draft a new will, counsel you about how to deal with your 401(k) and IRA beneficiaries during the divorce proceedings. To proceed without an attorney in these complex areas can result in troublesome situations to say the least. So, during this stressful time of divorce, thinking about death as well may be the last thing you want to add. But, before you get too deep into this alone, please know that an experienced family law attorney, especially one whose firm also practices estate planning, is a phone call away to help guide you through this difficult time of dissolving the marriage.

Divorce

Finding Yourself - Life after Divorce

Moving on with your life after your divorce is a challenge. It forces life event changes – whether you like it or not. You have gone through a major loss and the healing process may take some time. However, there IS life after divorce. Life after divorce is a process of moving on and finding yourself. It could be filled with the unknown but it could also have excitement. At this very moment, you may think your world is coming to an end – you are lonely, depressed, angry and just about ready to give up. You may even feel overwhelmed with issues and other arrangements set by the judge such as money, children, downsizing your family home, and who you are ‘in the now’. Hold on. Things will turn around and you, one day, will feel great – even– better than great. Once you get through the divorce process – the legal, financial and emotional aspects involved – things will get better.

Below are some helpful hints to help you feel encouraged – not discouraged:

  • Find a friend to talk to – share your feelings about what is happening
  • Write your feelings on paper – talk about your day
  • Hit the delete button on revenge – there is no place for revenge, especially when you need to concentrate on the future
  • Focus on your job – it’ll take your mind off divorce
  • Do stuff you wouldn’t do before – broaden your horizons – take a dance class or vacation
  • Be social – don’t stare at the four walls or the television screen

Even though you are no longer part of a couple, you are still a complete person. Take the time to find that new person and make yourself your number one priority.

Don’t Get Caught Off Guard

Life after a divorce is separation is going to be different. Different can be good, different can be bad… but either way it’s change and it can be hard to deal with. Lee Sears at DivorcedMoms recently wrote a post of the most surprising things post-divorce that she wasn’t expecting. We thought this information could be helpful so you’re not caught off guard by some of the life-altering changes:

  • You can do more than you think. You might feel like your ex handled finances, house repairs, cooking, etc. and that you’re helpless, but you’re anything but that. You can learn if you try, and when push comes to shove you’ll make yourself do it. There are always YouTube tutorials!
  • Friends aren’t forever. As much as we all wish they were, you’ll lose friends during the divorce process. Some for good reason, and many for not… it will happen. Don’t let it get you down. Think of it as an easy way to weed out the people who aren’t friends you want anyway.
  • Good men have boundaries. Men worth your time will tell you right away if they’re married. They do this as a sign of respect to their wives and because they know you’re single. If they don’t say, they may be a cheater… or they’re single and good luck.

If you are dealing with a divorce case or want another look to a finalized divorce case consider the law offices of Holstrom, Block & Parke, we offer the experience and understanding needed with such sensitive matters. Because this is a life changing experience we know the last thing you want is to be stressed, we have the resources you need to help you and your family cope and be able to live happily under the new circumstances. We will fight to protect you’re interest we know that the outcome is very important and it will reflect years to come in your life.

We are proud of our reputation for providing personalized service to every client. Our attorneys treat you like a person, not a case number. We understand that you are facing serious legal issues and it is our job to help you resolve them in the most efficient and beneficial manner possible.

After Divorce / Divorce / General

How Can Women Increase Their Income After Divorce

Divorce affects everyone differently. For the lucky few, divorce is a relatively pleasant experience. Some individuals are able to amicably wrap up their relationship and move on. For others, divorce can be a tedious and stressful process. Individuals can get to such an unhealthy point in their relationship that they want to fight over every asset and issue surrounding the divorce, almost as if for sport.

Regardless of the type of divorce you are going through, there is often some stress related to the unknown because imagining life after divorce is impossible. On top of worrying about issues such as your future living situation and the effect that divorce may have on your children, there is almost always stress surrounding finances.

A lot of stress regarding finances can be overcome by increasing your income. Some of us are stay at home moms and some of us work either part-time or full-time; but even for those of us that work full-time, our family’s total income has likely decreased because we no longer have our ex-spouse’s income coming in. But how can we, as women, increase our income?

First, sit down and write out what marketable skills you have. It is important to actually write down what skills you have so that you can create a plan for yourself moving forward. Even if you did not work during the marriage, it is still likely that you have marketable skills. For example, a stay at home mom that helped volunteer as a team mom or helped coach her daughter’s soccer team has plenty of marketable skills. That individual has experience working with children, has the ability to coordinate events, has experience dealing with unruly parents, and has the ability to both lead and be a team player. These skills will transfer into a plethora of job opportunities that are not necessarily limited to the realm of sports. While applying for a job at a sports complex or getting paid to coach are some of the more obvious options, these marketable skills will also transfer well into other fields such as an event planner, babysitter, or customer service representative.

Second, look at your schedule and write down the realistic hours that you have available to work. It may be the case that you only have a couple hours on the weekends when your ex-spouse has parenting time. Or, it may be the case that you have to work from home. Regardless of how little “extra” time you have to work, any extra work you do will lead to an increase in your income and a decrease in your stress.

Third, start actively looking for a job. If you do not look for a job, be certain that a job opportunity is not going to just fall into your lap. Remember that creating a new opportunity for yourself will also help you to move on. This job will be something “new” that doesn’t have anything to do with your ex. This is a healthy way to start paving the road to creating a new life after divorce.

After Divorce / Divorce / Financial Help

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