Tag Archives: finances

Misrepresenting Financial Status During a Divorce Can Be Disastrous

financial, DuPage County divorce attorneysWhen we think of divorce, many of us initially only consider the personal and romantic relationship which is coming to an end. However, divorce is not only the end of a romantic partnership, but also a financial relationship. Finances are usually merged when two people get married and move in together. Divorcing couples who cannot agree on how to split their accumulated assets will have that decision made for them by the court system.

Hiding Assets or Lying About Finances Will Only Drag Out Your Divorce

In order to make decisions about things like child support, spousal maintenance and property division, courts use each divorcing party’s self-reported financial information. For example, when a judge needs to decide how much spousal maintenance a person must pay to their ex, he or she will consider things such as each person’s income and future employability. Sometimes, in order to game the system, a spouse will lie about how much money they make or what their debts are. Doing this can significantly delay and complicate the divorce process. In order for a divorce to go smoothly, both spouses must be willing to be honest regarding their finances.

Ways a Spouse May Attempt to Defraud

It can be more difficult than you might imagine to spot someone lying about their finances during a divorce. Some married couples are very secretive about their assets and property, so a spouse suspicious of the other may not even know where to look to find clues of deception. There are many different tactics a person can use to misrepresent their financial status. A divorcing spouse attempting to deceive the court regarding their assets may

  • Hide antiques, jewelry, fine art, or other valuables at someone else’s house;
  • Take out cash from bank account(s) and put it in an unknown deposit box;
  • Make unusually large purchases;
  • Sign deeds to real estate over to another person;
  • Exaggerate debts;
  • Falsify self-owned business ledgers;
  • Underreport employee benefits such as retirement accounts or stock options;
  • Pay the Internal Revenue Service (IRS) more than they are due; and
  • Make copious cash withdrawals on credit or debit cards.

Negative Consequences for Those Who Hide Assets

If a person gets caught lying about his or her finances during a divorce, they are at the mercy of the judge assigned to their case. A judge may order a deceitful spouse to pay penalties, or sanctions in order to compensate for his or her wrongdoing. Furthermore, the judge may force the lying spouse to relinquish remaining assets to his or her spouse or pay more in spousal maintenance. A person who continually lies or attempts to deceive the court during a divorce case can be charged with contempt and even arrested.

Considering Divorce? Let Us Help

If you are planning to divorce your spouse or you have further questions about hidden assets, reach out to the experienced Wheaton divorce attorneys at the Andrew Cores Family Law Group. To schedule a free, confidential consultation call 630-871-1002 today.

 

Sources:

http://info.legalzoom.com/penalty-hiding-assets-divorce-25071.html

https://www.forbes.com/sites/jefflanders/2012/11/14/what-are-the-consequences-of-hiding-assets-during-divorce/

Marital Debt and Bankruptcy

bankruptcy, Wheaton divorce attorneysIf you or your spouse ends up in the unenviable position of having to file for both bankruptcy and divorce, it is imperative that you both understand the laws surrounding marital debts and bankruptcy. Many couples make assumptions and then react strongly when their carefully constructed asset division proposal collapses on itself. By educating yourself, you and your spouse can work to avoid such a fate.

Bankruptcy First?

One of the biggest questions regarding asset division, but especially marital debt, is whether to file for bankruptcy before divorce or vice versa. The general rule is that it depends on each spouse’s individual finances, and which type of bankruptcy would be filed. However, in most cases, filing beforehand tends to streamline the divorce process, while filing afterward or concurrently can cause a divorce to drag on. This is especially true if you or your spouse would be filing a Chapter 7 bankruptcy, either jointly or individually. In a Chapter 7, all debts are eliminated or written off, as opposed to in other types of bankruptcy where restructuring is more common.

If one files for Chapter 7 bankruptcy before divorce, a significant amount of debt will likely be off the table, which means it does not have to be taken into account during property division in the divorce. This can cut down on time spent, and correspondingly, on attorney fees. However, some do choose to file for divorce first, either out of a misguided belief that they can then get out of paying spousal support, or because they want to safeguard a specific asset. This can have decidedly mixed outcomes.

Beware of Creditors

Perhaps the most egregious mistake that many couples make is believing that their divorce decree is binding on every actor that may have business with their marriage. The divorce decree does not bind your creditors. If your spouse is assigned responsibility for a debt, but defaults or files for bankruptcy (Chapter 7 or 13), that creditor may attempt to collect from you, regardless of whether or not your divorce decree absolved you of the responsibility to pay. Bankruptcy law requires that once a debtor has filed for bankruptcy, all creditors must cease all communication with that person. It says nothing about ceasing communication with a spouse or other co-signer.

Be advised, however, that barring certain very rare exceptions, bankruptcy law does not allow you to shake some creditors, if you are in the position to be on the proverbial hook: your spouse and/or children. 11 USC § 523 states specifically that spousal maintenance and child support are explicitly not dischargeable in bankruptcy unless it is absolutely impossible for the debtor to both pay and support themselves in a semi-decent style, and this is extremely difficult to prove. While bankruptcy will wipe out some of your marital debt, it will not clear the slate completely.

Need Help Understanding Bankruptcy & Divorce?

If you have been unfortunate enough to have to confront both bankruptcy and divorce at the same time, you need a knowledgeable attorney who will fight for you. Our passionate DuPage County divorce attorneys can help advise you as to the best path for you, your family and your finances. Contact our offices today to set up a free initial consultation.

 

Source:

http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics

Financial Restraining Orders in Illinois Divorce Cases

restraining order, Wheaton divorce attorneyIf you and your spouse are going through a contentious divorce or one with significant assets and you are concerned about how your spouse may deal with finances and marital assets throughout the process, you may want to learn more about financial restraining orders in Illinois. One of our experienced family law attorneys can go over your finances with you and help you determine whether filing for a financial restraining order would be in your best interest.

Why File for a Financial Restraining Order?

Divorce proceedings can be costly, stressful and emotionally-charged. When spouses are angry and worried about finances, they sometimes act out financially or attempt to punish the other spouse by overspending or blocking access to bank accounts and other funds. A financial restraining order can prevent your spouse from locking you out of your accounts, or blowing through the marital savings during your divorce proceedings.

What Factors Do the Courts Consider when Granting a Financial Restraining Order?

Courts do not automatically grant a financial restraining order just because one spouse requests it. Rather, the court looks at a number of factors in deciding whether the financial restraining order is necessary and appropriate, and for how long the order should stay active.

Some of the factors the courts will likely consider include whether the couple has a marital history of:

  • Financial abuse;
  • Changing banking passwords;
  • Seeking to remove a spouse from a financial account;
  • Changing beneficiaries on policies;
  • Overspending;
  • Opening new accounts;
  • Closing accounts;
  • Draining accounts;
  • Selling, transferring or “encumbering” marital assets;
  • Giving away marital property as gifts;
  • Hiding assets from one spouse;
  • Lying about or concealing income;
  • Controlling finances without spousal input;
  • Refusing child or spousal support;
  • Not complying with existing court orders; and/or
  • Destroying marital assets.

How Long Will a Financial Restraining Order Remain in Place?

Depending on your individual circumstances, the judge may initially order a temporary financial restraining order to cover only the beginning of your divorce proceedings. As your divorce moves along, the judge may be willing to extend the order until your divorce is finalized, or even further.

Your attorney will be able to collect and present evidence to the judge to establish whether you need to have your temporary financial restraining order extended.

Consult an Experienced Illinois Family Law Attorney

No matter how contentious your divorce or the amount and type of marital assets you possess, one of the understanding DuPage County family law attorneys at our law firm can help you protect yourself during this difficult time. Call 630-871-1002 for a free consultation today.

 

Source:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000