Category Archives: Divorce Finances

How Bonuses, Commissions, and Stock Options Are Treated During DivorceThe income you earned before you filed for divorce is considered marital property, which is part of the division of property. Your income after your divorce is used to calculate child support and spousal maintenance but is otherwise yours to keep. The structure of your pay has little consequence on your divorce if you receive a straightforward salary or hourly wages. With other forms of compensation, the timing of your divorce could determine whether your spouse can claim a portion of that income:

  1. Bonuses: In most cases, a work bonus qualifies as marital property if you received it before you filed for divorce. You must make sure that your spouse does not double count the bonus by claiming it as marital property and including it as part of your income when calculating support. An exception may be a bonus with a clawback provision, which states that you must return the bonus if you are no longer with your employer before a set date. You could argue that you should not include the bonus in the division of property because you could lose it. If it is part of the division of property, you should include a section in your agreement stating that your spouse must repay their share of the bonus if you are forced to return it for reasons beyond your control.
  2. Commissions: Some employees receive a commission for work completed in place of or in addition to their salary. If you know that commission pay is coming, you can try to file for divorce in advance so that it is not marital property. However, your spouse may argue that the commission is marital property because you completed the work related to the commission while you were still married. If you cannot agree with your spouse, a divorce court will need to decide whether the commission is marital property.
  3. Stock Options: Illinois divorce law states that stock options that you receive during your marriage are assumed to be marital property, regardless of whether they are vested or if you know their actual value at the time of the divorce. A divorce agreement can set a provision that you will pay your spouse a share of these stocks when you exercise your option on them. Stock options are not marital property if they were a gift or part of an inheritance, which does not apply to stock options you received through work.

Contact a St. Charles Divorce Attorney

Much of your negotiating during divorce will focus on identifying your marital properties, determining their value, and dividing them between you and your spouse. A Kane County divorce lawyer at Goostree Law Group can ensure that your division of property is accurate and meets your needs. To schedule a free consultation, call 630-584-4800.

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Repairing and Building Your Credit After DivorceHaving good credit helps when you are responsible for supporting yourself after a divorce. It gives you the option of borrowing money to finance your immediate needs, such as purchasing a new home. Bad credit history or no credit history are obstacles to your financial stability but can be overcome with proper planning. Two of your goals during your divorce should be to protect or repair your credit and to work on building your individual credit.

Existing Credit

You need a current credit report to understand your financial situation, which you can purchase from a major credit bureau. Your current credit rating is likely based on:

  • Marital debts;
  • Business debts; and
  • Debts from before your marriage. 

Equitably dividing your marital debts is part of the divorce process. Marital debts are personal debts created during the marriage. With business debts, both spouses may be liable if they co-signed on the debt agreement or the business is not a limited liability company. Debts that predate a marriage are not shared during the divorce unless the spouse agreed to assume liability for the debt.

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Affording a New House as a Single ParentWhen parents divorce, at least one of them must find a new home for them to live with their children. In some cases, both parents are searching for a home if they sell their marital home. It can be difficult to purchase a house as a single parent. You must find a home that is within your price range but still meets your family’s needs. It may also be more difficult to receive a mortgage as a single parent. To purchase a home, you will need to plan ahead and use the resources available from your divorce agreement.

Assess Your Situation

Before hitting the housing market, you must identify what you need and what you can afford. Your needs may depend on how many children you have and their ages. Young children of the same gender may be fine with sharing a room, but older children need more privacy and space. Your housing expenses are a major component of your budget after divorce. Besides your job income and living expenses, you must consider divorce-related assets and expenses, such as:

It may be unwise to devote all of your available assets toward purchasing a home if you can find an acceptable home at a lower cost.

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Differentiating Between Individual and Marital Debts in DivorceDividing debts from your marriage can be one of the trickier parts of a divorce agreement. As an equitable division state, Illinois requires divorcees to split their debts in a way that is fair to both parties. Giving each spouse half of the debt may not be an equitable agreement, and a divorce court has the right to divide debt in a way that it deems to be equitable. For instance, a spouse with greater assets after the divorce may also receive a greater share of the debt. Divorcees also must consider whether a debt belongs to an individual or both parties.

Individual Debts

A debt belongs to an individual spouse if the creditor holds only that spouse liable for repaying the debt. You can usually identify an individual debt if:

  • It was created before you were married or after you were legally separated; or
  • The debt contract lists only one person’s name as the owner.

Student loans and individual credit cards are common sources of non-marital debt, as long as they follow the above criteria. You likely want to avoid agreeing to pay for a debt that you are not legally obligated to pay. If one spouse has significantly greater individual debt, he or she may receive a greater share of the marital properties to compensate.

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Divorcees Prefer Silence When Facing Financial ProblemsPeople who have filed for divorce are less likely to talk to others about their personal finances, according to a recent CNBC survey. Amongst the survey respondents who were divorced, 56 percent said that they rarely speak with family members about their money. Only 27 percent of all the survey respondents gave the same answer. There is nothing wrong with financial discretion when talking to family members. However, divorcees put themselves at risk if they do not talk to anyone about their financial troubles.

Reason for Silence

People dislike sharing their financial concerns with friends and family because they may be embarrassed about their situation. Unfortunately, divorce causes financial trouble for some people because:

  • They are primarily relying on their individual incomes to support themselves;
  • They lost some of their marital properties as part of the divorce;
  • They may have new expenses, including purchasing or renting their own homes; and
  • They may be required to pay child support and spousal maintenance.

It takes humility to admit that you need help despite worrying whether people will think less of you because you are struggling to pay bills and control your debt. Even if you are not in financial danger, you may be embarrassed to show that you cannot afford the same lifestyle as when you were married.

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Goostree Law Group

Goostree Law Group

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

 630-584-4800

 1770 Park Street, Suite 205
Naperville IL 60563

 630-364-4046

 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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