After Divorce: Should I Refinance my Home?

Despite divorce rates falling steadily over the past few decades, it remains a strong possibility than a once happily married couple might decide to split up. When divorcing, one of the most confusing and contentious issues a couple faces (aside from custody battles) is often the matter of deciding what to do with the family home.

While the most advisable course of action may vary somewhat with each situation, it’s always vital to make any discussions about the mortgage front and center. Your home is likely your biggest shared asset, and your decisions about the mortgage will impact both of you for many years to come.

If your ex will be the party taking possession of the marital home, remember you will be liable for your shared mortgage until the home is sold, the mortgage is paid off in full, or your ex refinances to remove your name entirely.

You see, removing your name from the title of the home does not absolve you of legal responsibility for the mortgage! This is a common misconception that has resulted in financial harm for countless divorced homeowners. As long as your name remains on the mortgage, your credit is at risk for substantial, long-lasting harm.

If you’re the party remaining in the home, you’ll probably be required to buy out your spouse’s share of the home’s equity. Refinancing your home will allow you to take out a cash portion of that equity to use as you wish—including paying off your spouse so they no longer have any claim to your home.

For example, let’s say that Amy and James purchased a $450,000 home together while they were married. Their outstanding mortgage balance now, at the time of their divorce, is $300,000. The remaining $150,000 is their shared equity in the home. If their divorce terms state that Amy and James are splitting their assets 50/50, Amy would have to come up with $75,000 to buy James out of the home.

Unless Amy has a suitcase full of cash lying around (or a healthy retirement fund), she’s going to want to refinance the home in her own name with a cash-out agreement, then use cash from the home’s equity to pay James what he’s owed. Afterward, she can transfer the home into her name alone.

If you’re like Amy and you want to buy out your former spouse, your first step toward taking sole ownership of the property is to figure out the exact amount of your share of your home’s equity. Here’s how to do it:

  1. Find out the home’s current value.
  2. Subtract your outstanding mortgage balance from this number.
  3. Calculate your percentage of the remaining equity based on the terms of your divorce agreement.

In order to determine your mortgage balance, ask your lender for a “payoff” total. This figure, once balanced against any equity lines of credit, second mortgage, or outstanding debts against the property, is your balance.

Now, your portion of the equity depends on the terms you’re able to negotiate in your divorce settlement. This usually hinges on factors like whether the two of you purchased your home together, whether the home has been paid for equally since it was purchased, and whether or not the home is covered by a prenup.

Of course, paying off your ex and securing sole ownership isn’t the only good reason to refinance after a divorce. You might choose to dip into your home’s equity to give yourself a cash cushion as you navigate the first 6 – 12 months of financial independence, or you might be better served by using some of these funds to pay off high-interest credit cards. Your circumstances will dictate the wisest use of these funds, so do consider your overall financial situation while you make this decision.

If your mortgage was first secured before 2008 and you haven’t refinanced recently, you stand a good chance of being able to lock down a lower mortgage payment. Interest rates are significantly lower than they were before the recession, even taking into account the spike in rates over the past few years.

When considering the overall trend toward higher interest rates, this is probably a good opportunity for you to exchange an adjustable-rate mortgage for a lower, fixed-rate mortgage. While the initial low cost of an ARM is appealing, the inherent uncertainty may not be the best option for you in the years to come. Consider the cash flow you can expect post-divorce, and calculate whether or not you could adapt to a higher interest rate if rates continue to climb for the next decade.

Although divorce is stressful at best and often utterly heartbreaking, it’s also an opportunity to take control of your finances and position yourself for a healthy, fresh start. Take care of yourself throughout this process, and try to keep your emotions at bay while you are making these crucial decisions.

Properly tending to your post-divorce financial well-being will require you to be savvy, focused, and optimistic in the face of adversity. Taking the time to educate yourself on how your mortgage functions as the cornerstone of your financial security will serve to empower you to use your mortgage to serve your own financial goals.

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Will I Lose my Alimony if my Ex Files for Bankruptcy?

When it comes to the complexities that come with divorce, most divorced couples find that one of the most stressful aspects is – you guessed it – money. Both parties will feel the effects of their divorce in the two places it hurts most – the heart and the wallet.

Regardless of how intertwined you and your (soon to be ex) partner kept your finances when you were married, going from living on two incomes to scraping by on one is never easy. This is especially true if you are the spouse who makes less money, was a stay-at-home parent, or have been otherwise dependent on your partner financially.

If your marriage resulted in children and they’ll be living with you after the divorce, you’ll be able to benefit from child support payments from the non-custodial parent.

Children or not, you may also benefit from alimony in order to help you maintain the quality of life you enjoyed while married.

In theory, the concepts of child support and alimony can help a newly single parent stay out of debt and continue paying all of the bills on time. The reality, of course, is that not every person will come through with the payments – for a number of potential reasons. A big question on many splitting couples’ minds is:

What Happens if my Ex Files for Bankruptcy?

Prior to 2005, filing for bankruptcy in New Jersey could help lower the amount of child or alimony support an ex-spouse had to pay each month. Luckily, amendments made in 2005 to the Bankruptcy Code set stricter enforcements into place to protect individuals who are entitled to domestic support obligations.

In Section 523, the U.S. Bankruptcy Code delineates that “domestic support obligations” are not dischargeable when an individual files for bankruptcy. In addition to alimony, “domestic support obligations” also include child support and money owed to the petitioner’s former spouse, child, legal guardian, or the government.

The spouse entitled to receive support may understandably be quite nervous if the other party files for bankruptcy after their divorce. Because of the 2005 amendments, the receiving spouse doesn’t even have to file a claim with the Bankruptcy Court.

What About the Automatic Stay?

As soon an individual files for bankruptcy, all creditors are obligated to stop collecting debt money. This is known as an automatic stay. The collection of alimony or child support does not fall under the enforcement of an automatic stay; rather, it is held in higher priority under the Bankruptcy Code. In other words, before any other debts from creditors are considered, alimony and child support need to be paid.

There is no difference between Chapter 7 and Chapter 13 bankruptcy when it comes to alimony. Individuals who file for either chapter are still required to pay (in full) any alimony and/or child support obligations.

Are There any Exceptions?

There are two very specific situations in which “alimony” can be discharged in bankruptcy.

  1. Sometimes, a divorce decree states that one spouse has a monetary obligation to be paid to a spouse, and it is mis-labeled as “Alimony.” If it is determined that the obligation is not actually alimony, then it can be discharged. For example, the divorce decree may state that “Husband shall be responsible for $10,000 of a debt accrued during the marriage (often credit card debt).” At times, items like this can be labeled incorrectly as alimony, when in fact, it is completely separate from alimony. Once this monetary obligation has been legally determined as “non-alimony,” it then becomes dischargeable.
  2. The second exception occurs if an individual has a monetary obligation to a third party. For example, Bob and Mary Jones divorce, and Bob is required to pay Mary $1000.00 per month. Bob decides not to pay the alimony, so Mary assigns her father the responsibility of collecting the alimony. Mary still needs the money and her father distributes it to her, but there is no record of that. Now that Mary’s father is responsible for collecting the alimony, if Bob files for bankruptcy, the order to pay alimony can be discharged since it was assigned to a third party.

Help with a New Jersey Bankruptcy

If your ex does file for bankruptcy, they may be granted forgiveness of other debts like credit card debt, or past utility bills.


TO BE CLEAR: It is not possible for your ex to file for bankruptcy in order to get out of paying domestic support. They can file for bankruptcy, but they cannot discharge child support OR alimony.


 

Paying alimony or being entitled to receive alimony while filing for bankruptcy can be a sticky situation for all of those who are involved. Rifts between family members can occur, and they normally don’t end well.

If you are the person filing for bankruptcy, work with an experienced NJ bankruptcy attorney rather than trying to go it alone to ensure that all of your obligations are being met. In the end, it will be well worth your investment of time and money.

Estate Planning Challenges: What Happens When Your Ex-Spouse Dies?

Getting married for a second or third time can bring a lot of joy, but it can also present new challenges, especially regarding how your estate plan financially affects current and former family members from your past marriages.

An important part of estate planning is understanding under whose ownership certain assets and property are currently held, as well as how they will be allocated in the future. Updating all of your account titles and designations, such as beneficiary designations on retirement accounts and insurance policies, is a must after a marriage, whether it be marriage number one or marriage number five.

Be sure to put all of your intentions in writing, so that there are no questions about what assets are to be distributed to children from your current vs. previous marriages. For example: if you want your current family to inherit your house, you’ll need to change the names on the legal documents associated with your home. If real property is not transferred correctly, your family may become homeless or experience unintended hardship after you or your spouse dies.

Alimony is a legal obligation for one person to financially support an ex-spouse after divorce in order to maintain the lifestyle that was experienced during the marriage. As part of a divorce agreement, a judge can order for alimony to be awarded, but it must be in accordance with any state laws. When an ex-spouse dies, a financially difficult situation can arise if you rely solely on alimony for income. In an unfortunate situation like this, it is typical that your alimony payments will discontinue unless your divorce decree specifically states otherwise. You may, however, be able to file a claim with the court against the estate of your ex-spouse to receive any unpaid alimony.

The estate of your ex-spouse will go through the probate process when he or she passes away. The administrator that is appointed to oversee the estate will pay any remaining debts and allocate assets to the beneficiaries. If your ex-spouse was indebted to you for past alimony or other monies, you will become a known creditor to their estate and can therefore submit a claim for said funds that are owed to you.

Although it makes perfect sense, the concept that alimony does not typically continue once an ex-spouse passes often isn’t given much thought until the time comes. You may very well need to discover new ways to supplement your income once alimony payments cease, so it is best to be prepared for this.  Many couples, especially those who have children together, elect to include each other in their respective life insurance policies as the beneficiaries. This will ensure that the surviving ex-spouse and any children from the marriage will be cared for adequately.

If you are considering tying the knot for a subsequent time, there are many important aspects of estate planning and beneficiaries that you should have a solid understanding of. This will eliminate or lessen the amount of confusion as to what assets stay with or go to each person when an ex-spouse dies. Along with forming an estate plan can come discomfort, but having a plan in place can bring peace and comfort. To learn more about estate planning if you’re preparing to wed again, reach out to our office with any questions or to initiate a free one-hour consultation.

Divorce Doesn’t Have to Ruin Your Credit Score!

While the act of separating and/or getting divorced from your spouse won’t affect your credit score on its own, it is likely to cause indirect damage to your finances. So, while there won’t be a giant mark on your credit report that says “GOT DIVORCED, automatic 100 point deduction,” your score can and will begin to drop after a divorce if you aren’t hyper-aware of the potential damage.

In order to take proactive steps to maintain a good or excellent credit score during and after a divorce, you first have to know what you’re up against. Some of the biggest factors that cause divorcees financial strife include:

  • Suddenly dropping from two incomes to one income
  • Joint debt that goes unpaid by your soon-to-be ex-spouse
  • Shared bank accounts that can be drained by either party
  • Spiteful actions of one spouse, like running up a joint credit card balance
  • Lack of an independent financial identity and/or credit history
  • Divorce expenses
  • Child support and/or alimony

Even if the split is something that will ultimately make you happier, the process of getting to that end goal is undoubtedly going to be stressful. It is much easier to miss a bill payment or make other financial errors when you are stressed to the max.

Why is My Credit Score so Important After Divorce?

Losing a few credit score points shouldn’t make or break anyone, right? In many situations, this may be true. However, for those people who are going through a divorce, maintaining a solid credit score is IMPERATIVE.

You may need to buy or rent, initiate utility services for, and completely furnish a new home. In order to do so, your credit must be fair to good at minimum (ideally in the upper 600s or above).

Additionally, many divorcees seek higher-paying jobs in order to make up for the second income that was lost in the split. These days, it is common practice for employers to check the credit history of all potential hires before extending a job offer. If your score tanks during or after your divorce, it may prove difficult to make even a lateral employment move.

What Can I Do to Maintain a Good Credit Score After my Divorce?

As soon as you know that divorce is in the cards, your first move should be getting a current credit report from each reporting agency. This will allow you to know precisely what debts and recurring payments are officially your responsibility as opposed to your spouse’s.

“Knowledge is power, but only wisdom is liberty.” ~ Will Durant

After you have current credit reports in hand, it’s important that you take smart action based on the information contained in your report(s). For example, you may not have realized that your spouse listed you as an ‘authorized user’ on a credit card. If the card’s balance gets maxed out due to extra expenses during your divorce and your ex-spouse stops making payments, you could be held responsible for the balance. In addition to removing yourself from any joint accounts, you should:

  • Create an amended budget using your adjusted spending limit.
  • Make it a priority to make all of your payments on time.
  • Closely monitor any accounts that you’re unable to separate immediately.
  • Get educated on the topic of good financial habits.
  • Seek the help of a financial advisor or NJ credit repair attorney, if needed.

 

 

 

 

My Ex Is Using My Credit Cards after Our Divorce!

Unfortunately, divorce almost always brings with it some degree of contention. Regardless of what the former couple disagrees about, it usually comes down to a “he said, she said” type of dispute.

Sometimes, however, there is legal recourse for post-divorce behavior that simply crosses the line. Take, for example, a woman who, upon setting out to clean up her credit report and boost her score, discovered that her former husband had been using her credit cards quite liberally well after they split up.

While, yes, there can be a bit of ambiguity when it comes to using shared cards in the time period after a married couple decides to part but before the Final Judgement of Divorce has been entered, the law speaks loud and clear after the divorce is final.

Any use of your ex-husband or ex-wife’s credit cards (that are in his or her name only) after you divorce is specifically disallowed. In fact, it’s against the law and reeks of identity theft.

Do some married couples use each other’s credit cards while they’re married? They do – even if the credit card in question is not a shared card and only officially “belongs” to one party. This is legal if the non-card-holder is named as an authorized user on the account.

Example: Husband goes out of town for the weekend and leaves his credit card for his wife to use for shopping. As long as she is an authorized user on his account, this is perfectly legal. However, she must sign her own name on any receipts as opposed to forging her husband’s signature.

Even if you’re currently happily married, it is generally considered unwise for you to utilize your spouse’s credit card (that is in his or her name only) if you aren’t listed as a user of the credit card. Some couples do it anyway because most merchants assume that the cardholder gave permission to the spouse to use their card. Simply calling your credit card company and adding your spouse as an authorized user is easy to do and can eliminate any potential problems.

After you are officially divorced from your spouse and are holding the Final Judgement of Divorce in your hands, there should be exactly zero further use of the other party’s credit card. This is true even if you were listed as an authorized user while you were married. Should your spouse forget to remove your name from their authorized users list, this does not in any way mean that you may continue using your ex’s credit after divorce.

An ex-spouse utilizing your credit card falls under the category of a criminal offense: identity theft. It is no different than a complete stranger stealing and using your credit card(s). If this has happened to you, the next step you should take is filing a police report and sending a copy of the police report to the credit reporting agencies. Working with a credit repair specialist will help you get the debt removed from your card and you may even be successful in making your ex pay for the charges.

NJ Mortgage Help for Single Parents

Going through a separation and divorce is never easy, but the complication level increases when you add children to the mix. Establishing a stable family life for your kids is something every good parent strives to do, and divorce can throw a wrench into even the best laid plans.

Supporting the expenses required as a newly single parent is a daunting task as you attempt to maintain as much constancy and normalcy for your children as possible. To that end, the marital/family home is most often where divorced parents elect for their children to remain living.

With that being said, finances don’t always stretch far enough for one parent on their own to pay the mortgage on that family home, along with all other monthly expenses. If both parents are able to pitch in financially to keep the children and one parent in the home, the chances of losing the home are lower. However, the threat of foreclosure for recently divorced single parents is real, and although frightening, it is not something that will go away if you ignore it.

If you are a single parent fighting to keep the home your children have thus far grown up in, you may be overwhelmed by the responsibility of making that monthly mortgage payment on your own. Missed payments are common after significant life events like job loss, illness, death, and, you guessed it – divorce.

The bank will never throw me out since I have young children, right?

Unfortunately, too many people simply give banks and lenders a lot more credit than they deserve. Your bank does not care if you have children, an elderly parent, three sick dogs and a chronic illness – their bottom line is money. You may think, “But there are people working at that bank; surely there is someone there with enough empathy to see that I am struggling.”

While that may be true – of course there are kind people working in banks and lending institutions – they must follow the instructions they are given by their superiors. A mortgage loan that is not being paid on time or at all WILL be sent into foreclosure by the lender. The question is not “If” but “When.”

How can I keep the bank from foreclosing? I just need a little more time!

The best move you can make if you’re in a similar situation is to take action before your home is foreclosed upon by your lender. You may qualify for a loan modification or refinancing. A New Jersey foreclosure and bankruptcy attorney should be the next person you call. Not many attorneys specialize in both areas, so it is important that you work to find a certified NJ attorney who has the experience you need.

Why do I need a bankruptcy attorney? I’m not broke and I want to keep my home.

An experienced NJ attorney who handles both foreclosure defense and bankruptcy matters will be able to stall your foreclosure by using the Automatic Stay. This tactic can only be utilized if the debtor files for bankruptcy.

Even if filing for bankruptcy was not on your top ten list of things to accomplish in life, it is a means to an end that has helped a multitude of people in your exact situation before.

 

Image: “Mother’s Moment” by Leonid Mamchenkov – licensed under CC 2.0

Estate Planning for Blended Families

As of 2016, blended families outnumbered traditional families in the United States. In fact, the very definition of what constitutes a family has expanded so exponentially that we may wonder what a “traditional” family even looks like anymore. For our purposes in this article, a blended family is one wherein at least one spouse has previously been married. We will also focus on those spouses who bring children of their own to a new marriage.

Blended families are increasing in number due to several factors. Higher divorce rates mean there are more opportunities for single parents to remarry someone who may potentially also be a single parent. Although rising divorce rates may seem like a bad thing, the good news is that less people are staying in unhappy marriages – choosing instead to strive for happiness, which ultimately should have a positive effect on any children in the family.

With the expanded definition of what makes up a family in today’s society, any number of homes contain a new mixture of children – both hers, his, and “theirs.” Additionally, more and more divorces are amicable, with ex-spouses remaining friendly in order to co-parent. With the addition of a step-parent into the equation, the ex-spouse may wonder if their biological child(ren) will continue to be provided for in the other parent’s will.

Estate planning becomes more challenging with the addition of more family members, regardless of how happy everyone is at the time of the wedding. The hard truth about estate planning for blended (or “step”) families is that planning for the well-being of two sets of children can easily escalate into an argument between the new spouses.

It’s critical to remind clients who have recently become part of a blended family to make sure that they make the necessary changes to the beneficiaries listed on their insurance policies and retirement accounts. No matter what a will says, the named beneficiary will take precedence over the will. Failure to remove a former spouse as beneficiary can prove quickly disastrous to a new marriage. Arguments aside, if you pass away while your ex-spouse is still named as beneficiary on your retirement account(s), guess who’s going to get all of that money?

In order to ensure that you’re not missing any crucial components of a solid estate plan after you’ve grown into a blended family, you’ll need to work with a New Jersey attorney who has significant experience working with complex estate plans. Your attorney will be able to advise you on:

  • Reciprocal wills (and how they can be problematic for blended families)
  • Non-reciprocal wills
  • Life insurance in addition to a will to provide for everyone in question
  • Testamentary trusts
  • QTIP trusts
  • Pre-marital agreements
  • Health care power of attorney
  • Living wills
  • Support obligations
  • Real property

The ultimate goal when working to set up an estate plan as a blended family is open communication between everyone involved. By maintaining open conversations about the details of your estate plan, no one will be left with an unexpected outcome.

 

Image: “Mike & Carla’s Wedding” by Jason Meredith – licensed under CC by 2.0

Financial Consequences of a NJ Divorce from Bed and Board

New Jersey couples who want to separate but not completely divorce have the option of choosing a legal process called divorce from bed and board. This is New Jersey’s version of a legal separation.

Why not just sever all ties and get divorced?

While there are many reasons why a married couple may not be ready to commit to a final divorce (irony noted), for the purpose of our finance-focused blog, we’re going to, as usual, hone in on MONEY.

Most spouses who are interested in a bed and board divorce are generally still amiable and see the benefit of working together to end their marriage in the best financial way possible for both parties.

Health Insurance Benefits

Probably the biggest money-saving reason to consider a divorce from bed and board is so that the dependent spouse can retain health insurance benefits even after the couple separates. Oftentimes, married couples have one insurance policy through one spouse’s employer. A bed and board divorce is especially applicable in cases wherein one spouse was a stay-at-home-parent or was otherwise unemployed in the capacity that would allow them to acquire health insurance of their own.

Private health insurance coverage is expensive. Divorcing couples in New Jersey in which the dependent spouse needs access to healthcare on a regular basis (ie. those dealing with a chronic illness) can choose the limited (b&b) divorce option, allowing the dependent spouse to remain covered under their working spouse’s policy until such time that he or she is able to obtain independent coverage.

Tax benefits

New Jersey homeowners who are joint owners due to marriage may be unsure how they want to divide the marital home. Moving from one household into two is, as you can imagine, enormously expensive.

Some married couples who no longer wish to be married recognize that it is wise for them to temporarily continue owning property together. This may mean that both spouses remain living in the marital home until both parties have a better hold on their independent personal finances. Additionally, continuing joint ownership of the marital home helps couples avoid property tax repercussions because the IRS views a divorce from bed and board as identical to a legal separation.

Retaining joint home ownership also gives couples who want it the time they need to transfer the title from both spouses to one spouse. This is because there are generally no time limits on property transfers between spouses who are divorced from bed and board in New Jersey.

Survivor benefits

A limited divorce from bed and board allows survivor benefits on many pension plans to remain unchanged. This is also true of many federal and social security retirement benefits. This can be very important for older couples who are nearing retirement age as well as younger couples who have children.

Although it is true that a divorce from bed and board offers many financial advantages, it is important to work with a family law attorney who has experience in this arena. It is crucial to be sure of the language in your specific benefit package(s) before making any decisions. If your personal finances are keeping you from getting the final divorce you want and need in order to move on and be happy, you may also want to consider filing for NJ bankruptcy.

 

 

Image: “Marriage Rings” by Robert Cheaib is licensed under CC by 2.0

Why Does Divorce Often Lead to Bankruptcy?

Money problems are frequently at least one of the factors that can lead a couple toward divorce. Often, spouses tend to blame one another for the financial struggles that have cropped up in their marriage. This can lead to a lot of fighting and distress that starts to form a wall between husband and wife. When the wall grows so high that it seems insurmountable, divorce can seem like the best (or only) resolution.

We’re not here to debate whether or not you and your spouse should or should not split up. That is totally your business, and we recognize that it is only our business to get your financial status back to where it used to be.

Regardless of the reason(s) for the demise of your marriage, the act of getting divorced itself often leads to bankruptcy of one or both spouses. If you’re counting on your divorce to wash all of your money troubles away, you’ve got a harsh reality to face. Some of the major reasons so many divorced couples end up bankrupt include:

Going from two incomes to one: Most couples who are married or committed long-term without being legally married tend to pool their incomes together in order to support their lifestyle. After a split, your spouse’s income vanishes, and you’re left to fend for yourself with only the money you make. Many times, this means attempting to continue making the same lifestyle choices with much less money. What happens is that the money runs out QUICKLY.

Legal fees: This is a factor in divorce that you actually have a lot of control over. Those couples who refuse to come together in order to create a settlement that works for both parties are only hurting themselves by racking up a ton of lawyer hours that simply aren’t necessary. As a matter of fact, you don’t even need TWO attorneys to get divorced! If you and your spouse can agree that you want to split amicably – using one attorney will save you thousands of dollars. The less in-fighting there is between the two of you, the lower your legal fees will be.

Alimony and/or child support: Naturally, you are legally required to pay both alimony and child support if you are so ordered by the court. We can only assume that you want to continue providing that financial support to your children. This means you may have to make sacrifices in some other areas of your life in order to cut down on spending. Those parents paying support who also have a plethora of other debts and high living expenses can get pushed over the edge into bankruptcy. IMPORTANT NOTE: Child support is NOT dischargeable in bankruptcy.

Bankruptcy of your (ex) spouse: As noted above, your ex cannot file for bankruptcy to get out of paying child support. This is not to say that they are prohibited from filing for bankruptcy; they just cannot discharge their child support obligation. If your ex-spouse files for bankruptcy, they may be granted a discharge (wipe out) of other debts, like credit cards, store cards, past due utility bills, late fees, and more. Since you were previously married, there’s a good chance that your name is included on some or many of the debts that are discharged, turning the creditors’ attention directly toward you.

Creditors don’t care about your private life. You got divorced, so sorry, too bad, is what they’ll say. “Your name is still on this account, and we don’t care if you’re single, married, or a neon green unicorn, we’d like our money please.” The bankruptcy of your former spouse can have a domino effect that ultimately causes you to file for bankruptcy as well.

If you’ve recently been through a divorce and are struggling with a similar situation, you have options. If you own your own home and don’t want to lose it, filing for bankruptcy is the perfect way to save it. Learn more at: http://www.veitengruberlaw.com/Bankruptcy-Law/.

Image credit: MCAD Library

Bankruptcy Law and Family Law: How They’re Connected

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Anyone who has been through a divorce knows that, second only to your love life, your finances are often the hardest hit area during a split. Many people continue to have financial difficulties long after their divorce is finalized, as well. Family lawyers who handle divorce cases know from experience that financial strife can be a huge contention between divorcing couples.

While your family law attorney will assist you in creating a Property Settlement Agreement that settles some of your money troubles (you may begin receiving child support or alimony payments after the divorce is finalized), oftentimes divorced couples will struggle with things like losing their family home to foreclosure, credit card debt, and potential bankruptcy.

As much as your divorce attorney may want to assist you with all of the above money matters, they have to focus their attention on everything within their own wheelhouse to ensure that you (and their other clients) achieve the desired outcome from your divorce. Their duties are many, and include drafting your PSA, attending court dates, negotiating and corresponding with counsel for your soon-to-be ex-spouse, handling domestic violence matters, and much more.

Frequently, family law attorneys find it very beneficial to work in tandem with an attorney who specializes in bankruptcy, real estate and/or debt relief. Because financial strain is a given in most divorces, it can be helpful for everyone involved to work as a team. Your divorce (family law) attorney will walk you through all of the steps of your divorce. With your permission, ideally he would then discuss your case with his tandem bankruptcy attorney, whom you would then work with to clean up your finances.

Of course, family law attorneys attend to matters other than divorce, like name changes, parenting time, grandparents’ rights, pre-nuptial agreements, child custody (unrelated to divorce), adoption, restraining orders, and domestic violence. Some of these matters can also be made easier by working with an attorney who specializes in finances. For example, the financial aspect of adoption matters can be quite intense. While your family law attorney will handle much of the adoption paperwork, he can refer you to a financial specialist like Veitengruber Law if you need more help organizing the necessary finances.

Every attorney has a lot on their plate every single day, regardless of their practice area(s). The best attorneys limit their focus to a limited number of practice areas so as not to get overwhelmed and spread too thin. If your family law attorney attempts to do it all himself, you may find that he’s too busy to set aside time to keep you updated on your case. On the other hand, a smart divorce lawyer will say, “Hey, while I’m working on negotiating your child visitation schedule, why don’t you go see George Veitengruber to start sorting out the fact that you can’t afford your mortgage payment?”

When attorneys work together, their clients always have a better result. Mutually beneficial relationships between experienced professionals give clients a well-rounded experience and optimal outcome. Veitengruber Law welcomes family lawyers in New Jersey (Monmouth, Ocean, Mercer, Burlington, Camden, and Gloucester Counties) to reach out to our firm if and when your clients need our services. We will gladly return the favor so that our mutual clients are well-cared for and happy with our services.

Image credit: Kamaljith KV