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Sunday, October 6, 2013

Preparing for your divorce consult

No one wants to make an appointment with a divorce attorney, just like no one wants to see flashing lights in their rear view mirror when they are rushing somewhere.  When these things happen, it’s best to be prepared so you can leave with the least amount of harm as possible.

After a divorce consultation, most clients tell me that they learned a lot, but at times the amount of information is overwhelming, along with the impact of a divorce on their family.  In order to have the best outcome to the appointment, I have a few tips as to what you may be expected to bring to the appointment, and what types of issues are discussed.
First and foremost, always bring a list of questions that you have with you to the appointment.  If you hear something you don’t like at the beginning of the appointment (like how your spouse has a great case for spousal support), your mind may go blank and prove rather useless for the rest of the meeting.  Feel free to take notes as to what the attorney said (hey, you have to watch us write down your life story, so you are welcome to write down our comments).  This will save you from having to call or email later and ask the same questions.

Most attorneys will have a detailed intake form, which has spaces for pretty much everything you can think of as far as assets, debts and your personal life.  Just like when you’re at the doctor’s office, you have to answer questions you probably don’t want to, but remember that everything said between you and your attorney is confidential.  You need to be honest – we can’t help you if we don’t know the whole story or are being lied to.
As far as assets, attorneys don’t need an inventory of every item in your house (not yet at least – sadly this does happen in some cases later on).  However, we need to know details about your residence and vehicles– do you own, rent (or lease), mortgage/loan company, whose name is the loan in, present balance, if there was a premarital interest, has there been an appraisal and what is the current value of vehicle.  Relative to your bank accounts, stocks, bonds, and retirement, information needed includes if the accounts are joint or individual, financial institutions they are held at, balances, loans against the accounts, beneficiary information, and if any of the monies were premarital in nature.  Life insurance policies can be whole (with cash value) and term (without cash value), and are also considered in your marital estate, and specifics on those items are typically asked.

Unfortunately, having assets usually means you have debt, so a complete picture of your credit card balances and outstanding loan details can help your attorney better assess how things may be divided up between the two of you.  If you are unfamiliar with the amount of debt in your name, running your credit report beforehand can be very beneficial.
Income and employment benefit information for each party, such as the cost of health insurance, are factors for child and spousal support, and are necessary to run accurate guideline recommendations.  Many people bring previously filed income taxes, which can be very helpful especially if the parties are self-employed or if their income varies significantly from year to year.

Of course you are asked questions about the kids if you have any, how you and your spouse cared for them (jointly or more one-sided), cost of daycare, and what you’d like to see for parenting time and custody.  Explanations as to options for custody and parenting time should be given as they are usually the source of many disagreements during the divorce.
Your attorney wants to help you, but keep in mind that he or she is not a miracle worker – try to go into the appointment with an open mind and realistic expectations.  Otherwise, the retainer fee won’t be the only thing you’re upset about.

Bankruptcy Blues

Divorce often leaves people in a financial bind, whether it’s going from a two income household down to one, or one spouse being forced to work after being a stay at home mom or dad.

At the start of a divorce, I typically advise clients to pull their credit reports – you can do so for free (yes, really, no gimmicks or anything) at, which allows you one free report per year from each of the three reporting agencies – Experian, TransUnion and Equifax.  This can lead to an unfortunate enlightening about the financial status of their marriage – often people have no idea that their credit card debt was so high, and the wife had no clue she was on the loan to the useless fishing boat he just had to have (who wants to stab worms and pull hooks out of slimy, scaly fish anyways?).
When divorcing parties have all debt and no assets, bankruptcy becomes high on the list of things to talk about with your attorney.  Bankruptcy law is a very specialized area and individuals should seek expertise counsel to advise them as to their particular situation.  At times it may be more advantageous for a person to file bankruptcy with their spouse instead of individually, or it could be better to wait until the divorce is finalized as opposed to doing so while the divorce is ongoing.  In some cases, a person may not even qualify to file bankruptcy, so the option may be completely off the table.  Your family law attorney likely knows several bankruptcy lawyers that can assist you in making the right decision.

If you do decide to file bankruptcy during your divorce proceedings, doing so will keep you married longer.  As part of the divorce, your marital assets and property are divided between the two of you, and that division is then set forth in your final judgment.  However, when either one of you file bankruptcy, an automatic stay is triggered which stalls the divorce action as a court cannot divide any property while the bankruptcy is ongoing.  Once the bankruptcy is complete, the divorce starts chugging along again and the property can be divided.  Parties must still stay on top of their divorce matter even if a bankruptcy is filed, because issues such as custody and parenting time can be addressed and potential settlements can be discussed as well, which will finalize the case much quicker once the bankruptcy proceedings are resolved.
Certain items cannot be discharged in bankruptcy, specifically support obligation debt and property settlement debt that is owed to one’s spouse, ex or child.  If a judgment includes a provision about property settlement, it is still nondischargeable but will not be as high up the totem pole as support obligations; therefore it’s important to distinguish between the two in a judgment.

It is not uncommon for one spouse to take control of the marital finances, leaving the other relatively in the dark about the parties’ savings, debts and expenses.  Divorce is not the best time to find out about these financial indiscretions, and it’s best to take an active role from the start – you don’t have to take over the dreaded obligation of balancing the checkbook, but look at all the bank statements and bills when they arrive (by mail or electronically).  After all, you’re already at an attorney’s office – at least try to save yourself from more disappointment.