Category Archives: divorce finances

Filing for Bankruptcy When Getting DivorcedSpouses share their debts during a marriage. When they decide to divorce, those debts are split between the two sides, with each spouse taking responsibility for paying a portion of the debt. However, creditors hold divorced spouses equally liable for their marital debts, regardless of the terms of the divorce settlement. If one divorced spouse fails to pay his or her share of the debt, the creditor will go after both spouses. A couple facing overwhelming debt can file for bankruptcy to either discharge the debt or create a repayment plan. Bankruptcy may allow a divorcing couple to reduce or eliminate the shared debt that will tie them together after their marriage has ended. Couples should consider filing for bankruptcy before they divorce.

Types of Bankruptcy

People most commonly file for either chapter 7 or chapter 13 bankruptcy. The differences between the two may determine which type a divorcing couple prefers and when they want to file:

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Spouse May Be Hiding Income in Own BusinessOne challenge in negotiating a financial settlement in a divorce can be trying to figure out your spouse’s true worth, as compared to what he or she claims. Understating your income and assets gives you an unfair advantage when determining the division of marital property, child support payments and spousal maintenance. In particular, people who are self-employed or own a business are capable of artificially deflating their personal worth. Spouses may think they are savvy when they find ways to understate the value of their businesses or themselves. However, the other spouse would see it as dishonest and manipulative. You must be aware of the ways people can take advantage of their self-employment during a divorce.

Manipulating Finances

When people are self-employed or run a business, their personal and professional assets and expenses often mix. As their own boss, they have the ability to:

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Controlling Your Finances After DivorceGetting a divorce can lift the emotional burden of being in a stressful marriage. However, single life has its own stresses, not the least of which is the financial adjustment. Your household income may be decreased, or you may be responsible for monthly support payments to your former spouse. Expenses you once shared with your spouse are now your individual responsibility. It can be a harsh adjustment if your former spouse was in charge of keeping track of your finances. You can take steps during and after your divorce to help yourself deal with your new financial independence.

Divorce Settlement

When negotiating the terms of your divorce, support payments and the division of property can give you some financial security. Child and spousal support, in particular, can benefit you for years:

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You Can Continue on Your Spouse's Health Insurance After DivorceHealth insurance is one of the most important and costly services often shared between spouses. When you get divorced, you will be responsible for procuring your own health insurance if you were on your former spouse’s plan. If your employer allows it, you may be able to immediately sign up with your own employee health plan. But what if you do not have that option? There are a couple of insurance choices you should consider.

Insurance Continuation

Normally, continuing coverage on your previous health insurance plan is available through COBRA insurance. Premiums under this plan can cost up to 102 percent of the group rate.

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Illinois divorce attorney, Illinois divorce lawsIn a marriage, all assets and debts accrued while the couple is married are considered to be marital property. This includes any debt following purchases made primarily or solely for one partner's benefit, such as a new vehicle or a college education for one of the spouses. The only exception to this rule is if the couple has a prenuptial agreement in place that designates one partner as the sole owner of a specific asset or debt or if one partner receives an asset through inheritance or a gift. In these latter scenarios, the asset or debt is singly-held property and treated the same way as an asset or debt or she held when he or she entered the marriage. When your property is divided during your divorce, it is divided according to the doctrine of equitable distribution. This means that your assets and debts are assigned to you and your partner according to your needs and contributions to the marriage.

How the Court May Divide Your Debt

Because the court needs to divide your debt equitably, it will most likely try to balance each partner's debt with the amount of assets they receive. For example, if you are given a larger share of your marital investment portfolio, you may also be given a larger share of your marital debt. Multiple factors are considered when determining the best way to divide a couple's debt, such as each partner's income and how it will impact his or her ability to maintain a comfortable standard of living.

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Goostree Law Group

Goostree Law Group

 555 S. Randall Road, Suite 200
St. Charles, IL 60174

 630-584-4800

 400 S. County Farm Road, Suite 300
Wheaton, IL 60187

 630-407-1777

Our Illinois divorce attorneys represent clients in Kane County, DuPage County, Kendall County and DeKalb County, including Geneva, Batavia, St.Charles, Wayne, Wasco, Elburn, Virgil, Lily Lake, Aurora, North Aurora, Elgin, South Elgin, Bartlett, Crystal Lake, Gilberts, Millcreek, Maple Park, Kaneville, LaFox, Yorkville, Oswego, Plano, Sugar Grove, Big Rock, Bristol, Newark, DeKalb, Sycamore, Naperville, Wheaton, West Chicago, Winfield, Warrenville, Downers Grove, Lombard, Oak Brook, Streamwood, Hoffman Estates, Barrington, South Barrington, Lake Barrington, Schaumburg, Big Grove, Boulder Hill, Bristol, Joliet, Kendall, Lisbon, Minooka, Montgomery, Plainfield, Sandwich, Yorkville and many other cities.

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