Tag Archives: financial concerns

How Divorce Can Impact Your Credit

DuPage County divorce lawyer credit scoreDivorce can cause a great deal of financial upheaval for a family. However, the divorce itself does not have a direct impact on your credit score. The divorce decree does not add or remove points from your existing number, but the financial outcome after the divorce can still play a significant role in what happens to your score. Here is what can go wrong and how to prevent damage to your score:

Responsibility for Joint Debts

Creditors want their money. They do not care if you got a divorce, nor do they care whether a judge proclaimed that one spouse is responsible for the balance on the joint credit card. If your name is on the account as a co-signer, an authorized user, or a joint account holder, you are also financially liable for these debts. The divorce decision does not negate the existing agreement you have with the lender.

Your Credit Score Is on the Line

If you share an account in any way with your ex, old or new, you are also legally responsible for the balance on that account. If the judge gives the responsibility to your ex, and he or she fails to make a payment, the negative marker will end up on your credit score, no matter how far in the past your divorce occurred. Your credit score may also be affected if your ex or someone else with access to a credit card runs up the balance on the account. Negative consequences affect all credit scores associated with an account, yours included.

Preventative Measures

A general rule of thumb is to close any joint accounts before the divorce process begins. Unfortunately, in some situations, a vindictive spouse may sabotage their former partner’s credit score by making large purchases with no intention of paying the balance. Closing accounts or removing a spouse from an account can help avoid this situation.

Other preventative measures you can take include maintaining an amicable relationship with your spouse throughout the divorce and working together with your ex to pay down credit card balances and ultimately close the accounts entirely. You may be able to work with lenders to pay the amount in full or settle for a lower total. You can also communicate with lenders to convert a joint account into an individual account. No matter your decision, it is best to clear up any loose ends as soon as possible, so you can begin rebuilding your credit once your divorce is finalized.

A DuPage County Family Law Attorney Can Help

If you are considering divorce and are worried about how the process will impact your credit score, the Wheaton divorce lawyers at Andrew Cores Family Law Group can answer your questions and address your concerns. Our experienced attorneys will walk you through the divorce process and advise you of how to protect your finances and your credit. Call us today at 630-871-1002 to schedule your free initial consultation.




Bankruptcy Could Affect Divorce Proceedings

bankruptcy, Wheaton divorce attorneysMany marriages fail due to financial stress. Even if there are other factors involved, if one or both spouses file for bankruptcy, that may complicate any pending divorce proceedings. The biggest impact, in many cases, stems from the fact that filing for bankruptcy in federal court automatically stays or suspends any pending judicial proceedings involving the debtor. This includes a divorce lawsuit that has already been filed in the Illinois courts.

Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy, a debtor must turn all of his or her assets over to a court-appointed trustee. The trustee then liquidates the assets, subject to certain exemptions, and uses the proceeds to pay back the creditors as much as possible. Any exempt or remaining assets are then returned to the debtor, who receives a discharge from the bankruptcy court.

But what happens to marital assets that are divided during a divorce? For example, in a recent Illinois bankruptcy case, a Chapter 7 trustee sought to “avoid” or undo a transfer of a husband’s share of his formal marital residence to his wife. The couple owned the house as “marital property,” which under Illinois law meant each spouse “has a species of common ownership” that “vests” once one spouse filed for divorce. Once the court divides the property and distributes it to one spouse, the other spouse’s legal interest is “extinguished.”

Judge Rejects Bankruptcy Trustee’s Efforts to Undo Divorce Settlement

In this case, the wife filed for divorce in October 2012. A few months later, the husband filed for Chapter 7 bankruptcy protection. This automatically stayed the divorce case for about two years. Once the bankruptcy court lifted its stay, the divorce court in Illinois proceeded to award sole ownership of the residence to the wife.

The Chapter 7 trustee challenged this order in bankruptcy court. The trustee argued the wife was required to file a formal lien on the property in order to enforce the divorce court’s judgment. The bankruptcy judge–and later a U.S. district court judge–rejected this argument.

As the district judge explained, federal law treats the bankruptcy trustee as the equivalent of a “bona fide purchaser” of real property. This is a formal way of saying that a hypothetical person who wanted to buy the husband’s 50 percent interest in the house has a legal right to notice of the wife’s contingent claim on that interest. The trustee argued the wife never provided that notice by filing a formal lien.

The judge, however, said that was unnecessary. The trustee already had “constructive” notice of the wife’s interest based on the fact the property was previously held as joint tenancy—which is a matter of public record—and the husband and wife had lived there together for many years. A “prudent buyer” would have inquired as to the wife’s ownership interest in the property, regardless of whether she filed a lien.

Are You Facing Bankruptcy and Divorce?

This is the sort of highly technical legal issue that may arise when bankruptcy mixes with divorce. Even under the best of financial circumstances, divorce is usually a messy operation. That is why you need an experienced DuPage County family law attorney at your side. Contact one our three convenient locations to speak with a lawyer today.




The Concept of Guardianship in Illinois

guardianship, DuPage County family law attorneyIn Illinois, a guardianship is created when when the court grants legal decision-making authority to an individual on behalf of another person who is incapable of or cannot reasonably make such decisions themselves. Persons subject to guardianships include minors, since they lack the legal authority to make such decisions, adults with severe mental or physical disabilities or impairment, elderly persons suffering from dementia or mental decline, and adults suffering from severe mental health conditions, among many others.

How Does Guardianship Differ from Parenting Rights and Responsibilities?

A guardianship can include the right to act as a parent and take on parental responsibilities for minor children, but it does not apply to the child’s natural parents, who may seek parenting time without establishing guardianship.

Typically, persons who seek guardianship of minor children include stepparents, grandparents, aunts and uncles, adult siblings, extended family or close friends of the family when a child’s parents have died, or are unable or unfit to continue serving as caregiver.

How Does the Court Decide Guardianship Cases?

Guardianship motions are decided on a case-by-case basis, and the court considers many relevant factors, including:

  • The fitness and motivations of the persons seeking guardianship;
  • The wishes of the person subject to potential guardianship;
  • Clear and convincing evidence as to the mental capacity of the potential ward;
  • The type and severity of the potential ward’s disabilities;
  • Whether the potential ward’s condition may continue to decline or fail to improve;
  • Testimony from physicians, psychologists, therapists, teachers, and other professionals familiar with the case; and
  • The previously expressed wishes of the child or children’s parents who have passed away.

What May Make Guardianship Necessary or Desirable?

Several common situations can prompt the need for establishing an official guardianship. In many instances, caregivers are already serving the role of guardian, without having established the legal relationship. Some situations that may make guardianship necessary or convenient include:

  • Enrolling a minor in school or an adult in an adult daycare program;
  • Making important medical decisions;
  • Having the legal authority to receive private information protected by law, such as medical or educational records;
  • Committing a loved one to psychiatric treatment, rehab program, residential facility or nursing home without their consent;
  • Receiving public assistance or benefits on behalf of the potential ward;
  • Obtaining parenting rights when a parent is unfit or has abandoned the child; and
  • Carrying out the wishes of parents who have named preferred guardians for their children in a will.

Consult an Experienced Guardianship Attorney in Illinois

Whatever your reasons for seeking to serve as a guardian of your loved one, your experienced DuPage County family law attorney can help protect your best interests, and those of your potential ward. Contact us for professional help today.