Category Archives: Divorce Finances

What Are the Benefits of Filing for Bankruptcy Before Divorce?

Wheaton divorce attorney for bankruptcyIn many cases, finances can be a leading factor in the choice to get a divorce. Married couples might be faced with difficult financial challenges, such as the expenses related to serious health problems or the loss of income resulting from unemployment. If a marriage was already unsteady, or even if it was seemingly going well, disagreements over finances can often be the catalyst for the breakdown of the relationship. Depending on your financial situation as a married couple, you might be considering both divorce and bankruptcy. Since both of these are major life events and significant legal decisions, careful thought must be given to them, and the appropriate time must be chosen to proceed with each.

Reasons to File for Bankruptcy Before Divorce

If you and your spouse are on the same page about your finances, and you share the majority of the debt, filing a joint bankruptcy before beginning the divorce process might be the right move for you. Here are some reasons why you may choose this option:

  • Affordability—The cost of a joint bankruptcy filing and an individual bankruptcy filing are the same. If you two decide to file for bankruptcy separately when you are divorced, the process will be twice as expensive.

  • Paving the Way for a Smoother Divorce—There is a lot of overlap between bankruptcy and divorce proceedings, primarily because they both require an in-depth review of finances. If you plan on filing for Chapter 7 bankruptcy, which can usually be finished in six months or less, this may allow you to resolve the majority of your debt-related issues, making the division of property much simpler.

  • The Possibility of Second Chances—Once you and your spouse receive the debt relief you need, you may realize that debt-related stress was one of the primary causes of marital discord. In that sense, by filing for bankruptcy first, you might be giving your marriage a second chance by granting yourselves extra time, including moments without the stress of crushing debt.

What About Bankruptcy After Divorce?

Overall, there are not as many benefits to filing for bankruptcy after you have completed your divorce. In general, when bankruptcy is filed after a divorce, it is in response to financial issues that occur as a result of the divorce itself. If one spouse is put at a financial disadvantage due to the divorce settlement, they may struggle to meet their needs while making any required support payment and addressing ongoing debts. In these cases, bankruptcy may be necessary to allow a person to discharge debts and receive a fresh start.

Can I File for Bankruptcy During Divorce?

In many cases, if one spouse files for bankruptcy during a divorce proceeding, they are looking to delay the divorce. This is because a bankruptcy causes an automatic stay of all state proceedings, including divorce, essentially freezing any developments on those cases until the bankruptcy is resolved. During your divorce, it is best to communicate with your spouse about your finances and make sure a potential bankruptcy filing will not cause problems during the divorce process.

The Limitations of Bankruptcy

Fortunately, bankruptcy does not put many of the most important terms agreed to through a divorce decree in jeopardy. In particular, obligations to pay child support or spousal maintenance cannot be discharged through bankruptcy. In addition, bankruptcy cannot discharge most tax bills, student loan debt, and some fees resulting from criminal penalties.

Contact a Wheaton, IL Divorce Lawyer

If you and your spouse are facing financial difficulties that are putting stress on your marriage, consider reaching out to a DuPage County bankruptcy and divorce attorney who has the experience and background to provide you with sound advice. Call the Andrew Cores Family Law Group Divorce at 630-871-1002 for a free consultation to discuss your options.

Sources:

https://cdn.ymaws.com/www.dcba.org/resource/resmgr/bankruptcy/1.24.19_bankruptcy_law_hando.pdf

https://www.womansdivorce.com/divorce-and-bankruptcy.html

How to Look for Hidden Assets During Your Illinois Divorce

DuPage County property division attorney for hidden assetsSometimes, by the time people get divorced, they do not even recognize each other anymore. Over the years, a sense of mistrust might have festered. Misgivings about your spouse and his or her motivations often contribute to the decision to file for divorce. As the divorce drives you two even further apart, it becomes easier and easier to keep things from each other. This is when hidden assets become an even greater possibility. If you suspect your spouse might be hiding assets from you and your attorneys, what should you do? There are a few things that require further investigation from you and your lawyers to make sure no asset is left buried.

What to Do During the Hunt for Hidden Assets

Financial fraud during divorce is much easier to commit than it is to expose. There is quite a bit of detective work that goes into finding those hidden assets, bringing them to light, and enabling them to be divided along with other marital property during a divorce. Here are some ways you and your lawyer might be able to hunt for hidden assets:

  • Take an Inventory—Collect all of the financial documentation for both you and your spouse. Be very thorough and organized in your collection of this paperwork. You need to have a strong baseline to judge your financial picture against that of your spouse. If you notice specific inconsistencies, then you know where to look first for possible hidden assets.

  • Study Tax Returns—Tax returns can reveal a great deal about a spouse’s financial history. By comparing tax returns from year to year, you and your attorney will be able to more easily decipher the data and discover hidden assets. For instance, there could be some itemized deductions (on Schedule A); interest and dividends (on Schedule B); business profits or losses (on Schedule C); capital gains and losses (on Schedule D); or supplemental income and losses (on Schedule E) that can indicate what might be missing from the finances your spouse is reporting.

  • Review Mortgage Documentation—When you apply for a mortgage, you must report all of your finances. The underwriters put you through a comprehensive and stringent auditing process that provides a clear and in-depth picture of your finances. They cannot give you and your spouse that mortgage without such detailed due diligence. That is why those papers are so important to your search for hidden assets. There might be assets or properties reported there that were not reported during the divorce.

  • Conduct a Physical Search—Both actual property and paper trails leading to certain assets might be found in physical locations where you and your spouse keep important items. Consider conducting a search of safes, safe deposit boxes, and other typical “hiding spots” for important possessions.

How Will Your Lawyer Help with the Hunt?

In addition to helping you with all of the aforementioned ways to find hidden assets, your lawyer can also do the following:

  • Engage in Aggressive Research—Many lawyers are accustomed to searching for—and locating—hidden assets during divorces. They know exactly where to look and how to optimize their research.

  • Enlist the Help of Industry Experts—Your lawyer may work with a forensic accountant who will review your and your spouse’s tax returns for any inconsistencies. They will investigate your respective financial histories to make sure every last cent is accounted for. If they cannot locate something, they will attempt to find it and arrange for it to be included in your divorce case.

  • Subpoenas—When you, your lawyer, or financial experts need additional support for your findings, or when you suspect further financial culpability on the part of your spouse, your lawyer has the right to subpoena banks and other similar institutions for supplemental records.

Contact a Wheaton, IL Asset Division Lawyer

The hunt for hidden assets can be long and involved. That is why you need a skilled DuPage County divorce attorney on your side to make sure you leave no financial documents buried. With the assistance of Andrew Cores Family Law Group, you will be able to track down all those hidden assets that you have a hunch about. Call 630-871-1002 for a free consultation.

Sources:

https://www.huffpost.com/entry/financial-fraud-and-divor_b_8210922

https://www.forbes.com/sites/catherineschnaubelt/2019/03/08/finding-hidden-assets-in-a-divorce/#6d1f0a1e6fd1