Tag Archives: bankruptcy

How Will an Economic Recession Affect Divorce Rates in Illinois?

DuPage County divorce attorney financial hardshipGovernor Pritzker has extended the Illinois Stay-at-Home Order through the end of May, and it could potentially last even longer. While some states are phasing into opening more parts of their economies, Illinois remains focused on the safety of its residents, only allowing essential workers to work outside of their homes. As the unemployment claims keep rolling in, it might be easy to feel like the country, or at least the state, is in the midst of an economic recession or depression. How might this new economic reality in Illinois affect divorce rates?

The Many Potential Effects of a Recession on Divorce Rates

Will an economic recession decrease or increase divorce rates? While a strong case could be made for either outcome, the truth is that this is a nuanced issue. In studying divorce rates before, during, and after the last major recession over the last 10 to 15 years, researchers have found that there is no clear, substantial, and overwhelming data that supports either outcome. In many cases, the likelihood of divorce is dependent upon each family’s living situation. For example, divorce rates might increase as a result of a recession because:

  • Foreclosures, bankruptcies, and other financial stressors have taken a tremendous toll on the marriage.

  • Unemployment, furloughs, or other job hardships have changed the dynamic of a family and relationship such that the marriage is less emotionally stable.

  • Spouses are uncertain of their economic futures—both together and in general.

  • A spouse may attempt to respond to the stress resulting from the recession with excessive engagement in bad habits, such as drinking or drug use, and this could convince the other spouse to move on.

  • A spouse might take out their stress about the recession on the other partner or other family members through verbal, physical, or sexual abuse, making divorce the only option for the other spouse’s safety.

Conversely, divorce rates might decrease due to a recession because:

  • Families have grown closer during those trying times, especially if many of them are home more often due to their evolving employment situation.

  • Economic insecurity from the recession and worries about the expenses that could result from a divorce may cause spouses to rationalize that staying together is the financially prudent decision.

  • Sons, daughters, and other family members, including extended family, might have moved in—or a married couple themselves might have moved in with other family members, lessening the burdens of a household facing financial and emotional hardship.

  • Couples may be more reluctant to marry due to the uncertainty of the times, and they may choose to cohabitate instead, which could prevent a future divorce.

Ultimately, the most telling observation from the majority of the data is that the timing of a divorce is key. For instance, during the recession over a decade ago, fewer and fewer people were getting divorced than prior to the recession, but immediately after economic recovery, divorce rates spiked.

Contact a DuPage County Divorce Lawyer

The many economic uncertainties in our world today may have had an effect on your marriage. If you think that divorce might be a good option for you, contact a Wheaton, IL divorce attorney at Andrew Cores Family Law Group by calling our office at 630-871-1002. We will provide you with a free consultation and help you understand your legal options as you prepare to end your marriage.

Sources:

https://www.pewsocialtrends.org/2012/05/02/divorce-and-the-great-recession/

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4444228/

https://www.psychologytoday.com/us/blog/singletons/202004/more-babies-or-more-divorces-after-covid-19

How Can I Avoid Bankruptcy After an Illinois Divorce?

Wheaton divorce and bankruptcy lawyerA recent survey found that 39% of people state that debt and other financial issues were a major factor that contributed to their divorce. It is no wonder that bankruptcy and divorce are so closely linked—not only can divorce itself often cost more money than many people expect, but the financial ramifications of the divorce are felt long after the proceedings are complete. From the division of marital debt to simply adjusting to living on a single income, life after divorce can get expensive. But that does not mean you have to file for bankruptcy. Here are some tips for keeping your finances in order after your marriage has ended:

6 Ways to Prevent Bankruptcy Following Divorce

While there are some things you can do to avoid bankruptcy that are common to just about any person, divorced or not, there are also some special things that you can do to protect yourself against bankruptcy when you are divorced. Some examples include:

  1. Increase Your Income—This is probably one of the very first tips a financial advisor will tell you if you are considering bankruptcy. Are there any ways for you to increase the money you make? The more money you have coming in, the less likely it will be that you will drown in debt. You may want to take on extra jobs (part time or otherwise), seek a promotion or a raise at work, rent out your house, sell your valuables, or borrow from family and friends if necessary.

  2. Decrease Your Spending—Another obvious option to avoid bankruptcy is to decrease your expenses. You can do this by drawing up a budget and sticking to it. Focus on the necessities in your budget and be realistic in terms of what you can afford. If you already have a budget, revise the budget and do your best to eliminate anything you do not need.

  3. Readjust to Being Without a Partner—A common problem that divorced people face is making the appropriate adjustments to their lifestyles. When you were married, you and your spouse pooled your finances and resources. You were probably able to afford more discretionary spending in your lives because you had two incomes and shared expenses, such as those associated with your house or apartment. Now that you are single again, you might want to reconsider how you will live your life. This could include relocating to somewhere cheaper, holding off on buying a new car, spending fewer nights on the town, or cooking meals at home rather than eating out.

  4. Remarry—You can always get back into the dating scene and find a new partner. This can help restore the sense of financial security and comfort you had before your divorce. However, you should keep in mind that if you rush into a new relationship before you are ready, you might end up divorced yet again.

  5. Restructure Your Mortgage and/or Renegotiate Your Debts—Divorced people, married couples, and single people alike can stave off bankruptcy by restructuring their mortgages or negotiating their debts. Overall, most financial institutions are interested in negotiating with you, because they would rather get more money from you now than receiving nothing from you later if you file for bankruptcy.

  6. Hire the Right Divorce Attorney from the Start—Here is the best advice we can give to you if you really want to avoid bankruptcy after divorce: seek legal representation from the right attorney at the beginning of the divorce process. If you find the right attorney, you can ensure that the terms of the divorce will be to your benefit, including making sure spousal support or child support payments will meet your needs and maintaining ownership of valuable assets during the division of property.

Contact a DuPage County Divorce Lawyer

Divorce is a big enough life event in itself, and you will not want bankruptcy to complicate things even further. Hire the right Wheaton family law attorney from the start of your divorce. If you enlist the help of the knowledgeable team at Andrew Cores Law Group, you will receive valuable, affordable legal counsel, ensuring that you will be awarded the optimum financial benefits from your divorce agreement. Call us at 630-871-1002 for a free consultation.

Sources:

https://finance.yahoo.com/news/debt-com-survey-divorced-americans-134500285.html

https://money.usnews.com/money/blogs/my-money/2012/05/16/5-ways-to-avoid-filing-for-bankruptcy

https://globalnews.ca/news/3377381/heartbroken-and-bankrupt-why-divorce-can-destroy-your-finances/

When Divorce and Bankruptcy Meet

bankruptcy, Wheaton divorce lawyersSometimes, things simply go bad. It is thankfully rare, but it is not unheard of that someone would have to file for bankruptcy and divorce at the same time. If this happens to you, you may question whether or not to file for both at the same time, or if not, which matter to pursue first. Illinois divorce laws and bankruptcy laws make the answer to that question fairly clear.

Which to File First?

Illinois divorce law and bankruptcy law essentially make filing both petitions at the same time impossible. When you file for bankruptcy, you generally hand over your assets to the care of a bankruptcy trustee for sale or disposition as necessary to pay off your creditors. Once you have commenced a bankruptcy filing, you may not make unilateral decisions about your property. Technically it is no longer yours. Thus, there is nothing for a family court judge to divide.

Though you are not generally able to file both bankruptcy and divorce petitions at the same time, the question of which order you ought to file them in is up to the individual. In most situations, it is recommended to file for bankruptcy before divorce, especially if you get along well with your spouse. The reasons are straightforward in that if you file for divorce first, property division will almost certainly give you new assets, which will then almost certainly be sold to pay your existing debts. Therefor, filing for divorce before a bankruptcy filing can put you at a significant disadvantage.

The Advantages of Bankruptcy First

There are several reasons why filing bankruptcy before divorce is the best course of action. Illinois does allow married couples to claim two sets of exemptions if they file jointly, which means that double the amount of property can be kept out of the hands of the bankruptcy trustee. It is also possible to discharge joint debts in this manner if you have many of them.

An important thing to be aware of in this regard is that filing for Chapter 7 bankruptcy does have income limits. In Illinois, your monthly income must be below the median amount for your household size, or you must be able to pass the means test. If you are unable to do so, it may be in your best interests to file for divorce first, because then you and your former spouse should be able to qualify individually. If you intend to file for Chapter 13, however, you would both be responsible for the repayment plan.

If you do file for bankruptcy before divorce, be advised that you should also have a good enough relationship with your spouse to discuss support issues beforehand. If you have no income, or you will not have access to certain amounts of income, it does not make sense for a judge to require that you pay support based on that income.

A Legal Professional Can Help

If you are in a situation where bankruptcy and divorce are both on your horizon, an experienced divorce attorney can make all the difference. The compassionate Wheaton divorce attorneys at our law firm are well versed in the complexities of Illinois divorce law, and we will put that knowledge to work for you. Contact us today to discuss your options.

 

Sources:

https://www.law.cornell.edu/uscode/text/11/704

http://www.illinoisbankruptcy.com/exemptions.html

https://www.legalconsumer.com/bankruptcy/means-test/state.php?st=IL