If you are planning to get a divorce or you are already involved in the divorce process, it is important to protect your credit from potential damage by your spouse. For example, if you have joint accounts, your spouse may be able to damage your credit even if he or she is ordered by the court to assume sole responsibility for the account.
What happens if a court orders one of the parties to be solely responsible for a joint credit account and that party defaults? The creditor is going to come after the other party, even though the court has ordered the first party to pay. How can this be? The contract clause of the United States Constitution prevents courts from interfering with contractual obligations. Credit is a contractual obligation between the creditor and the debtor (you). If you have a joint account with your spouse, and your spouse defaults on a court-ordered credit obligation, the creditor will look to you to pay, and your credit rating will suffer. A bankruptcy court is the only court that can affect your contractual relationship with a creditor.
Since you may be stuck paying for a joint debt, it makes sense to try to avoid placing yourself at such risk. If you are planning for a divorce, get all your joint credit accounts changed into separate accounts, you will need your spouse’s permission to do this. If you are already involved in the divorce process, eliminate as much of the joint debt as you can.
The same is true for joint bank accounts. If your spouse overdraws on a joint account, guess who the bank will expect to pay the overage – you!
Once you are divorced, you will be a single person. You will want to be able to the only person responsible for your credit rating. It pays to take the necessary steps to put yourself in control.
Good luck to you as you leave the marriage zone, and remember to get rid of those joint accounts!
Friday, August 1, 2008
The Basics of Property Division in Divorce
In Colorado marital property is divided in a divorce or legal separation by means of “Equitable Distribution”. “Equitable” does not necessarily mean “Equal”, but for most purposes, and absent unusual circumstances, it is useful to assume that marital property will be divided 50/50 between the parties.
The question then becomes what is the “marital property” to be divided. Marital property is all property acquired during the marriage such as the parties’ earnings and things acquired with such earnings. However, inheritances and certain gifts acquired during the marriage are not considered marital.
“Separate property” is property acquired prior to the marriage, or inheritance or certain gifts acquired during the marriage. The Court has no power to divide separate property. However, any appreciation of separate property during the marriage is marital.
Here is a simple example. A married couple save some earnings during the marriage and buy a house. The parties pay the mortgage with the husband’s earnings. The wife receives an inheritance during the marriage and is careful to maintain this bequest in a separate mutual fund account in her name only. The equity in the house is marital, as is any appreciation included in that equity. The amount of the bequest to the wife is her separate property, but any appreciation of the account is marital.
In most instances, determining what is marital and what is separate property is not difficult. However, the analysis can become complicated in some situations, especially regarding changes to title to real property during the marriage. If you own separate real property titled in your name only but change the title to joint tenants during the marriage (a common occurrence), you may have gifted one half the value of the property to your spouse. For example, Mary owns a condo in her name only, but changes the title to joint tenants after she marries John. John may now be entitled to one-half the value of the condo.
How you title marital property is not critical. For example, the parties buy a car during the marriage with money earned during the marriage, but place the title in the husband’s name only. The car is still marital property.
Even when determining what is marital and what is separate is relatively easy, calculating the proper shares can be difficult. This is true for retirement accounts and pensions earned both prior to and during the marriage. Special Court orders may have to be drafted to accurately divide such assests.
Property division law in a divorce is the same as other law. You must remember that: you may not understand the law; you may not like it; and you may not think its fair; but It’s the Law!
The question then becomes what is the “marital property” to be divided. Marital property is all property acquired during the marriage such as the parties’ earnings and things acquired with such earnings. However, inheritances and certain gifts acquired during the marriage are not considered marital.
“Separate property” is property acquired prior to the marriage, or inheritance or certain gifts acquired during the marriage. The Court has no power to divide separate property. However, any appreciation of separate property during the marriage is marital.
Here is a simple example. A married couple save some earnings during the marriage and buy a house. The parties pay the mortgage with the husband’s earnings. The wife receives an inheritance during the marriage and is careful to maintain this bequest in a separate mutual fund account in her name only. The equity in the house is marital, as is any appreciation included in that equity. The amount of the bequest to the wife is her separate property, but any appreciation of the account is marital.
In most instances, determining what is marital and what is separate property is not difficult. However, the analysis can become complicated in some situations, especially regarding changes to title to real property during the marriage. If you own separate real property titled in your name only but change the title to joint tenants during the marriage (a common occurrence), you may have gifted one half the value of the property to your spouse. For example, Mary owns a condo in her name only, but changes the title to joint tenants after she marries John. John may now be entitled to one-half the value of the condo.
How you title marital property is not critical. For example, the parties buy a car during the marriage with money earned during the marriage, but place the title in the husband’s name only. The car is still marital property.
Even when determining what is marital and what is separate is relatively easy, calculating the proper shares can be difficult. This is true for retirement accounts and pensions earned both prior to and during the marriage. Special Court orders may have to be drafted to accurately divide such assests.
Property division law in a divorce is the same as other law. You must remember that: you may not understand the law; you may not like it; and you may not think its fair; but It’s the Law!
Friday, July 18, 2008
No-Fault Divorce
Did you know that Colorado is a “no-fault” divorce state? All this means is that, in order to get a divorce in Colorado, you do not have to prove that anyone was at fault or that anyone did anything to damage the marriage. To get the divorce, one spouse has to be able to say that the marriage is “irretrievably broken”. There are three reasons for having no-fault divorce: to promote the amicable settlement of disputes that have arisen between the parties to a marriage; to lessen the potential harm to the spouses and their children that can be caused by the legal system in obtaining the divorce; and streamline the legal system for dealing with the realities of marriage and obtaining a divorce.
Because Colorado is a no-fault divorce state, it does not mean that fault does not have any role to play in a divorce case. For example, a couple may wind up getting a divorce because of the infidelity of one of the spouses. That spouse’s infidelity is not going to impact the proceeding in a no-fault jurisdiction like Colorado. However, if the unfaithful spouse had the bad taste and judgement to spend marital funds in the pursuit of his/her extramarital affair, such funds would have to be accounted for in the divorce case. This means that the unfaithful spouse would have to pay for expenditures out of his/her share of the proceeds of the marriage.
Another example of bad behavior (fault) that can play a role in a divorce case is domestic violence. Domestic violence will be taken into account with regard to matters such as child custody that involves the fitness of the parent. So keep in mind that “no-fault” in the marriage zone simplifies the process of getting a divorce. It does not mean that bad behavior will have no impact on the case. As a purely practical matter, a divorced person should be able to view exactly where the fault was that caused the demise of his/her marriage.
Friday, July 11, 2008
The Marriage Zone: Mediation
Mediation plays an important role in most family law cases. If you and your spouse cannot agree on all the issues in your case, the court will require that you attend a mediation before you can have the court decide the issues in your case after a hearing. It is important to know what mediation is and what it can do for you.
Mediation is a process involving an objected third-party who attempts to help the parties reach a voluntary resolution of their issues. The mediator’s only agenda is to try to settle the case. Mediation is not arbitration. Arbitration is a process that involves an objective third-party who actually decides the issues between the parties.
It must be emphasized that mediation is a voluntary process. While the court may order you to attend a mediation, it is up to you whether or not you are willing to reach a settlement or partial settlement at the mediation. Mediation works. This is why the courts require it before they are willing to hear your case. You may wonder why a mediator is ever required if both parties are represented by attorneys. The mediator can still be invaluable in providing a different perspective. Sometimes, a party needs to hear the hard facts from someone other that his/her attorney. There is also a hybrid process called mediation/arbitration (med/arb). A med/arb starts out exactly like a mediation. However, if the parties can’t reach a complete settlement as to all their issues at the end of the mediation, the mediator switches gears and becomes an arbitrator and makes a decision as to any remaining issues. The med/arb model is becoming more popular. A med/arb will typically involve significantly less litigation costs than a regular hearing before a judge.
In the “Marriage Zone”, mediation is your friend. In a family law case, both parties are usually more satisfied with a settlement that they have mutually arrived at compared with a ruling imposed by a court.
Thursday, July 3, 2008
Divorce in Colorado -How Long Does It Take?
When I speak to someone for the first time who is interested in getting a divorce or a legal separation, one of the first questions they ask is: How long will it take? The theoretical shortest amount of time it will take to get your divorce or legal separation is 91 days from the time your case is filed with the Court. Colorado Legislature has passed a law that requires the judges to wait 90 days after the case is filed before they can issue your divorce decree or decree of legal separation. There are no exceptions to this rule. There is no way around this rule. It is human nature that after someone makes the difficult decision that he or she wants to get a divorce or a legal separation, he or she then wants the desired results to occur as soon as possible.
I do not know the exact reason for the 90 day waiting period. However, I can speculate that the Legislature felt it was wise to provide a waiting period to prevent people from making hasty decisions regarding such serious arrangements as a marriage.
How long your case will take depends upon you and your spouse. If you and your spouse cooperate and agree as to all the financial and parenting aspects of the case, your case may only take 91 days until the decree is entered. The more assets and debt that you have and the more complicated your financial arrangements are, the likelihood is that your case will take longer to resolve, because assembling all the information and getting all the expert input is likely to take longer than 90 days.It is important to remember that anything that you and your spouse don’t agree on, the judge will ultimately have to decide at a hearing. Judges are very busy, and getting time for a hearing will usually place you well past the 90 day waiting period. Absent unusual circumstances, your divorce or legal separation, however complicated, should not take more than a year to complete.
If you want your case completed as soon as possible after the 90 day waiting period has expired, you need to be organized, and be willing to cooperate with the other party. It's the Law - there is just no getting around the 90 day waiting period.
Tuesday, June 24, 2008
It’s the Law! Divorce and Legal Separation
In Colorado, folks who are married and decide to no longer be together have three choices: separation, legal separation, and divorce.
In a simple separation, the parties go their separate ways with or without a written separation agreement. They are still married. They can’t get married again until they are divorced. They are still subject to the laws of marital property. Absent a well-crafted separation agreement, any income they receive during the separation will be considered marital property and will be split accordingly in any subsequent court action for divorce or legal separation. There are exceptions to this rule that are beyond the scope of this article. The assumption that “whatever is yours is yours” if you get it during a simple separation, could be disastrous.
A “legal separation” involves a court proceeding and a court order. In fact, a legal separation involves almost the same legal principles and paperwork as a divorce. Division of property, maintenance (alimony), child support, and parenting time (visitation) will be addressed in the Court’s order. Six months after the judge enters the order of legal separation, either party may file a motion requesting that the legal separation be turned into a divorce. The motion will be automatically granted. If neither party wants a divorce, the legal separation can proceed indefinitely. If you have a legal separation, you are still married. You can’t get married again until you are divorced.
There can be some benefit to a legal separation as opposed to a divorce. For example, a spouse may be able to stay covered on the other spouse’s health insurance policy. If you are legally separated, the marital property laws no longer affect you. The income you receive during a legal separation really is yours.
Divorce (dissolution of marriage) is the most popular choice when folks part ways. The couple’s financial issues and parenting issues are resolved, the parties are free to remarry, and the parties are no longer affected by the marital property laws.
Remember, you may not understand the law, you may not like it, and you may not think its fair, but it’s the law!
Friday, June 20, 2008
Anatomy of a Divorce Case 2
This article continues the overview of a typical divorce case. The case has been filed, and the respondent has been served with the summons and a copy of the petition. A response to the petition has been filed, and an initial status conference has been held.
The parties have 40 days after the filing of the petition to prepare and exchange financial information such as financial affidavits, pay stubs, and tax returns.
The parties may request a temporary orders hearing. Temporary orders may be necessary if the parties cannot agree on how to handle matters pending the resolution (final orders) of the case. The Court may require the parties to try to settle their temporary differences before it will grant a temporary orders hearing. Most cases do not require a temporary orders hearing.
If the parties are in total agreement on all matters, the case can now proceed to final orders. However, the Court must wait 90 days from the filing of the petition and service on the respondent before it can issue final orders.
If the parties are not in total agreement, the Court will require the parties to mediate their dispute before the Court will hold a trial to settle any differences. Mediation is a process where a trained third party attempts to help the parties settle their differences. It is a voluntary process. The mediator does not make decisions for the parties. The parties make their own decisions.
Most cases settle. The parties reach an agreement on all the issues. Whatever the parties cannot agree on, the Court will decide at the trial (the final orders hearing). The final orders hearing is held by the Court without a jury. However, all the rules of court regarding trials apply (rules of evidence, etc.).
Before the Court will issue the final orders, whether the parties have settled or a trial was held, the parties must have filed financial affidavits and a certificate stating that the parties have provided mandatory disclosure of their finances. If children are involved, the parties must have attended the parenting class and provided the court with a proposed parenting plan.
The procedure you must follow to get a divorce is the same as other law. You must remember that: you may not understand the law; you may not like it; and you may not think its fair; but it’s the law!
The parties have 40 days after the filing of the petition to prepare and exchange financial information such as financial affidavits, pay stubs, and tax returns.
The parties may request a temporary orders hearing. Temporary orders may be necessary if the parties cannot agree on how to handle matters pending the resolution (final orders) of the case. The Court may require the parties to try to settle their temporary differences before it will grant a temporary orders hearing. Most cases do not require a temporary orders hearing.
If the parties are in total agreement on all matters, the case can now proceed to final orders. However, the Court must wait 90 days from the filing of the petition and service on the respondent before it can issue final orders.
If the parties are not in total agreement, the Court will require the parties to mediate their dispute before the Court will hold a trial to settle any differences. Mediation is a process where a trained third party attempts to help the parties settle their differences. It is a voluntary process. The mediator does not make decisions for the parties. The parties make their own decisions.
Most cases settle. The parties reach an agreement on all the issues. Whatever the parties cannot agree on, the Court will decide at the trial (the final orders hearing). The final orders hearing is held by the Court without a jury. However, all the rules of court regarding trials apply (rules of evidence, etc.).
Before the Court will issue the final orders, whether the parties have settled or a trial was held, the parties must have filed financial affidavits and a certificate stating that the parties have provided mandatory disclosure of their finances. If children are involved, the parties must have attended the parenting class and provided the court with a proposed parenting plan.
The procedure you must follow to get a divorce is the same as other law. You must remember that: you may not understand the law; you may not like it; and you may not think its fair; but it’s the law!
Subscribe to:
Posts (Atom)
