Ocala Divorce Lawyer Blog

If you are divorcing in Florida in this current economic climate, like many, your house may be "upside down" on the equity to loan ratio or have what we are calling, "negative equity." That has happened one of two ways: either you bought between '05 and '07 when the housing market was at its highest or you took equity out of the home through a "home equity line of credit," and now the house is worth substantially less.

But what happens to that house and the negative equity in divorce? Generally, if your spouse has decided to keep the marital home, it could cause problems for you. Unless your spouse is able to re-finance that home, your name remains on the loan/mortgage for that home- even if you sign a Quit Claim deed. The Quit Claim deed only relinquishes legal title to the home, it does not relieve you from the financial obligation. Just because the home is now hers/his, does not release you from your original liability of the original mortgage you both took out as a married couple. Unless your spouse can qualify for a new mortgage, by way of a refinance, on his/her own, you will still be liable to the lender for the original mortgage on a home you do not own, if your spouse cannot or will not pay the obligation. In other words your good credit may be at the mercy of your ex. The next problem is that He/she may not qualify, so you have all the legal obligation to the bank without the legal position of owning the property.

Lastly, there may even be some equity in the house, but in order for you to get your portion of the equity, your spouse might not be able to refinance because the Bank's just aren't lending much anymore, because of the credit crunch. We have had some client's that just pay the other spouse their share of the equity of the house over a long period of time.

It used to be that divorcing couples would fight over which one of them keeps the marital home. Now couples are fighting over which one of them is going to take the marital home. Many of my clients are just letting the house go back to the bank. There is absolutely no benefit for them financially in keeping a home that is worth much, much less than is owed. However, from the lender's standpoint, nothing has changed because both partners are responsible for the mortgage. The only other alternative is a short sale to a third party. Should that occur the deficiency belongs to both of you.

If you are thinking about divorce in North Central Florida, please call us to talk your case. Visit our website or call the office to schedule your low-cost consultation. We employ a client based approach, which means that we are selective in the cases we take so that we can be available to our clients. We spend time with you to thoroughly understand the facts of your case, so that we can provide you with a comprehensive and realistic legal evaluation. Our process begins with a half-hour low-cost consultation, all of which is credited back to your account if we accept your case.

I have many potential clients coming in asking about discharging debt in Bankruptcy and wanting to know if it's better to file Bankruptcy before or after the divorce. While I do not practice in the area of Bankruptcy, I will share what I have learned over the last few years from those attorneys with whom I work to practice in this field of law. I can reassure you, that over the past 3 years as the economy has headed downward, the rate of filing for Bankruptcy has headed skyward!

If you, as a prospective client, think you're headed for divorce and have a lot of debt between you and your spouse, it might make sense to file for bankruptcy before starting the divorce process. Filing bankruptcy first can simplify the divorce by clearing out some of your debt. This makes the Equitable Distribution aspect of the divorce much easier and quicker. It is fairly easy to negotiate how the remaining debts should be divided, and protect you from your soon-to-be-ex's bankruptcy filing down the road.

One important thing you might want to consider is filing a joint bankruptcy before the divorce. Not only will this make the final division of any remaining debts even easier, but filing a joint bankruptcy is cheaper than filing two separate ones. In either event, bankruptcies and divorces have serious impacts on each other, especially with respect to your property and personal finances.

How Will The Bankruptcy Effect My Divorce?

When one or both spouses file bankruptcy, all the property, that is, property that was bought or acquired during the course of the marriage, becomes a part of the bankruptcy estate and is available to pay debts. The bankruptcy estate is simply all of your property that you and your spouse own at the time the bankruptcy is filed.

When you or your spouse file a bankruptcy, an "automatic stay" is immediately entered by the court and prevents creditors from collecting on most debts. But the automatic stay doesn't prevent you from asking a Domestic Relations Court to order your spouse to pay child support or alimony.

Once a bankruptcy court decides property is "exempt," that is, it is not part of the bankruptcy estate and so it is not available to be sold to pay debts, but a divorce court can then divide that property. Property exemptions are defined not only by federal law (the "Bankruptcy Code"), but also by the laws of the state in which the bankruptcy is filed.

How Is My Marital Settlement Agreement Effected by Bankruptcy?

Negotiating a marital settlement in the midst of bankruptcy is complicated. Debts related to a marital settlement are presumed to be "non-dischargeable" in bankruptcy, meaning that the person who files bankruptcy can't have those debts wiped out and must still be responsible for them.

So if you think your soon-to-be-spouse is contemplating bankruptcy after your divorce is final, you'll want to word your Marital Settlement Agreement in such a way that your soon-to-be-ex's obligation looks and acts as much as possible like a support obligation instead of a "property settlement." That is so simply because support obligations are more difficult to have discharged.

For many bankruptcies filed on or after October 17, 2005 (when the Bankruptcy Laws were significantly changed), any obligation between former spouses can't be discharged in bankruptcy. So, a spouse with an alimony and/or child support obligation can't have that obligation discharged in bankruptcy if the bankruptcy petition was filed on or after October 17, 2005.

Can An Indemnity Clause Help If My Ex-Spouse Tries To Discharge the Debt?

Many lawyer who practice in the area of divorce lawyer are adding yet another layer of protection for their clients by adding an "Indemnification Clause," based on the possibility that the former spouse may file for bankruptcy after the divorce. This "hold harmless" or "indemnity" clause written into the divorce agreements, require your spouse to pay certain debts or repay you if a creditor makes you pay the debt. While this indemnity clause doesn't provide total protect, it does make it less likely to get that particular debt discharged by the bankruptcy court. At that point, you can go to bankruptcy court and ask the judge to enforce the indemnity agreement. While an indemnity agreement won't guarantee you'll get paid, it's one more factor for the bankruptcy judge to consider.

Contact An Attorney

Going through a divorce and bankruptcy at the same time is confusing and complicated. If you find yourself in this position it is best to consult with a lawyer as soon as possible. To talk to us about your case, please visit our website or call the office to schedule your initial consultation. We employ a client based approach, which means that we are selective in the cases we take so that we can be available to our clients. We spend time with you to thoroughly understand the facts of your case, so that we can provide you with a comprehensive and realistic legal evaluation. Our process begins with a half-hour low-cost consultation, all of which is credited back to your account if we accept your case.

If you are interested in pursuing an Uncontested Divorce, please call the Law Office of Anne E. Raduns, PA to find out how we can help. Even with an Uncontested Divorce, there are risks involved if you decide to do it yourself. We can help you with the process quickly and inexpensively.

To talk to us about your case, please visit our website or call the office to schedule your initial consultation. We employ a client based approach, which means that we are selective in the cases we take so that we can be available to our clients. We spend time with you to thoroughly understand the facts of your case, so that we can provide you with a comprehensive and realistic legal evaluation. Our process begins with a half-hour low-cost consultation, all of which is credited back to your account if we accept your case.

As a divorce attorney, I suppose this is probably the third most common question I get from clients or prospective clients (right behind "how much will this divorce cost" and "how long will this divorce take"), which simply stated is, "do I have to take the credit card debt of my spouse if I didn't run up the bill." The answer to that question generally results in the spouse who did not run up the bills feeling "duped" and the divorce process being "unfair."

Under Florida Statute 61.075, marital debts and liabilities will be equitably between spouses during a divorce. This means that generally any debt or liability acquired during the marriage will be divided between the divorcing spouses, regardless of whose name is on the debt or liability. This means credit cards too. It's important to remember, however, that the Statute requires the division of debts/liabilities be equitable, not necessarily equal. For the court to determine what is an equitable distribution of marital debt, it can consider many statutory factors, including: each person's contribution to the marriage, any contributions one party has made to other person's education or career, whether either party has intentionally depleted or destroyed marital assets and other equitable factors. As an aside, this process generally does not include "pre-marital debt." So if one spouse can show that the debt (or a portion of the debt) existed before the marriage, then it may not be treated as a marital debt for the purposes of equitable distribution.

However, I must point out that credit card companies to not have to and generally won't agree to abide by a Divorce Decree or Final Judgment of Dissolution of Marriage. So while you and your spouse have agreed to divide up the debt a particular way or the Court has ordered it divided a particular way, the credit card company is not obligated to follow that agreement or Order. Instead, the credit company will hold whomever is listed on the account responsible for the debt. This may be problematic if say the Husband has agreed to take a credit card debit listed in the Wife's name. He may fail to pay it and the credit card company will still demand payment from the Wife, regardless of the court order.

But what about credit card debt when one spouse didn't know a thing about? This is the most heartbreaking answer: if it was acquired during the marriage, regardless if you knew about it or not, or it was it your name or not, it is still a marital debt that it going to be divided. I had a client whose Wife had charged up about $30,000 of debt he knew nothing about. He generally handed her his paycheck and let her handle the martial bills and finances. When she filed for divorce, it was only then did he find out about the debt. She had not engaged in any "martial waste," as in spending money on a paramour or anything. So, even though the didn't know about the debt, he was still required to take on half of it. Not knowing about the debt does not relieve the other spouse from being responsible for it. This is a caveat emptor - KNOW, LEARN, BE INVOLVED in what is happening with your finances! Don't let someone else just manage the household finances unchecked.

If you are thinking about Divorce, an experienced divorce lawyer can help you protect yourself as much as possible from the financial hazards involved in credit card debt. For more information on how we can help you, or to talk to us about your case, please visit our website or call the office to schedule your initial consultation. We employ a client based approach, which means that we are selective in the cases we take so that we can be available to our clients. We spend time with you to thoroughly understand the facts of your case, so that we can provide you with a comprehensive and realistic legal evaluation. Our process begins with a half-hour low-cost consultation, all of which is credited back to your account if we accept your case.

Positive. Life-enhancing. Enlightening. Compassionate. These words are seldom associated with divorce. Words that typically come to mind are: Painful. Agonizing. Resentful. Bitter. Ugly. The average divorce takes two years with a median cost of $30,000. Yet the true cost of divorce is more than time or money, it is the legacy of the decisions made during the process, says Chicago Judge Michele Lowrance. It doesn't matter how long a couple has been married, whether there are kids or no kids, the painful impact of divorce often leads to bad choices that can forever alter a family's life, she adds.

Couples overburdened with emotion choose litigation as the best way to protect their interests. "By letting the court determine far more than just their future financial, and custody decisions, the divorcing parties abdicates the power they have over their own life and choices," the judge says. "Without fail, both parties end up regretting the decision to litigate almost immediately and for years to come. Nobody starts a marriage hoping it will end in divorce, but that doesn't mean that divorce needs to be the defining moment of their life."

Judge Lowrance has learned that there's a better way to handle divorce. So she came up with a plan to turn the negatives of divorce into positives. She explains the program in her new book, The Good Karma Divorce: Avoid Litigation, Turn Negative Emotions into Positive Actions, and Get On with the Rest of Your Life.

Continue reading "Florida Divorce Advice: The "Good Karma Divorce" from Judge Lowrance" »

A very common question that I often hear from my divorcing clients is, "Is my Spouse entitled to half of my 401K Plan, Pension Funds, or Retirement Account?"

There seems to be much confusion as to this area of divorce. Equitable Distribution in Florida allow for the division of property and assets acquired during marriage to be divided when the parties divorce. It comes as quite a surprise to my clients to learn that their soon-to-be former spouse is entitled to a portion up to one-half of any pension or retirement savings that was accrued during the marriage. In Florida, pension and retirement funds that accrue during the marriage are treated as marital property and are generally split equally between the parties. However, like with any rule, there are exceptions and modifications that may allow a client protect all or part of his/her retirement savings.

Florida Statute 61.076 Distribution of Retirement Plans Upon Dissolution of Marriage governs how the court should distribute these assets. The Statute holds that all vested and non-vested benefits, rights, and funds that accrue during the marriage are marital assets subject to equitable distribution during a divorce. This Statute applies to a plethora of Retirement/Pension plans including: 401(k), Pension Plans, Individual Retirement Account (IRA), Annuity, Deferred Retirement Option Program right (DROP), Thrift Savings Plans, and CSRS/FERS (Retirement plans through the Federal Government) that is acquired or accrues during the course of the marriage. It even applies to accrued sick-time that has monetary value if it was acquired during the marriage.

If the court determines a pension or retirement fund is a marital asset, they will issue a Qualified Domestic Relations Order (QDRO) that directs the plan administrator to divide the fund according to the Final Judgment of Dissolution of Marriage. We do not do QDRO's at our office but can direct clients to attorneys that specialize in this field of law. Once the court has determined that the pension, plan or fund is to be divided, the non-employee spouse is usually entitled to the same rights under the plan as the employee spouse, such as cost-of-living adjustments and early withdrawal options.

There are a few choices when it comes to how the money is to be received by the recipient-spouse, either that spouse is eligible to receive his or her share of the ex-spouse's benefits when the ex-spouse is entitled to receive them. Or that recipient-spouse might want to have it reduced to "present value" and cash out the money out of the plan/fund along with having to pay the penalties.

But not all retirements accounts/plans are considered a martial asset. Consider this: if a spouse has not contributed to their retirement account since the day they were married, the account will not be considered a marital asset and will retain its "pre-marital status." This also holds true for contributions made to a retirement account both before the marriage occurred and after it dissolved are the separate property of that spouse who made the contributions and are not considered marital property. The problem arises when monies are either co-mingled or contributed during marriage.

When determining what portion, if any, of a retirement account is not a marital asset, the courts will consider the length of any marital separation and whether marital "labor" or earnings were use to acquire the benefits. If a spouse maintains that all or part of his or her retirement account should not be considered marital property, that spouse will have the burden of proving when the retirement benefits accrued.

On the other hand, if a spouse is retired and dependent on a retirement account for income, the funds may be considered income-stream instead of an asset. In this situation, the retirement account will be considered for the purposes of determining an alimony claim or for computing child support, but will not be divided as marital property.

Retirement accounts and pension plans are a fairly complicated area in Divorce. To learn more about the process and what you are entitled to during your divorce, please visit our website or call the office to schedule your initial consultation. We employ a client based approach, which means that we are selective in the cases we take so that we can be available to our clients. We spend time with you to thoroughly understand the facts of your case, so that we can provide you with a comprehensive and realistic legal evaluation. Our process begins with a half-hour low-cost consultation, all of which is credited back to your account if we accept your case.

This is an excellent article I would highly recommend reading for any woman contemplating divorce. Well written and easy to understand. I always tell my clients that they are in control of their cases because they are the ones that have to live with the decisions they make. Think clearly and rationally about your case. It's a chance to make a new life for yourself. But the choices are still yours.

Five Things Every Married Woman Needs to Hear About Divorce
Kiri Blakeley

Divorce is never easy, but following these guidelines can make it more manageable in the long run.

Not many people enter marriage thinking it will lead to divorce. While accurate divorce rates are difficult to calculate and often unreliable, many social scientists conclude that up to 40% of marriages are terminated. The chances are fairly high that you or someone you know will get divorced.

"It can be the worst thing you've ever gone though in your life," says Brette Sember, a former divorce lawyer and author of a series of divorce books, including The Complete Divorce Handbook (Sterling, 2009). "You're hurt, sad, frustrated, scared and can't think clearly."

Regrettably, it is also one of the most important times to keep your wits about you, as the decisions you make during this time can affect you for the rest of your life. While divorce laws vary from state to state, here are some basic, but vitally important, guidelines to keep in mind.

Keep Your Business Head
A divorce can be an emotionally wrenching time. The first thing you might want to do is burn your husband's belongings, slash his tires, grab the kids and the stock portfolio and make a run for it. Don't do any of it! Remember that everything you do from here on out will be taken into account by a judge ready to decide your fate.

"Setting the lawn mower on fire is destroying marital assets," says Sember. "The judge will not be happy with you. Don't burn his baseball cards, don't e-mail threats to the new girlfriend."

Sember recommends doing everything you can to think rationally during this time: See a therapist, join a divorce support group and rely on close friends. She adds: "When you are angry, you can make impulsive decisions that are not good for you in the long run, like saying, 'Fine, keep the house!' Divorce is a business negotiation, and you've got to get your business head on." As long as you are not in danger, it's better to stay in the house so you can continue to gather financial and other information.

Grow Up and Take Control
Unfortunately, many women, even powerful professionals, are still in the dark about household finances. "Even the women who could be in charge of lots of money at work just step away from being financially responsible in their personal lives," says Margery Rubin, divorce coach and author of What Your Divorce Lawyer May Not Tell You (Simon & Schuster, 2009). "It's that 'Daddy will take care of me,' type of thing. I call it the 'Little Girl' syndrome."

But when you are divorcing 'Daddy,' it's time to grow up. You need to dig deep into the finances--copy your husband's tax return or your shared tax returns. Many women, say lawyers, still just sign on the dotted line, or have their husband sign, without taking a good look at the information. Compile all the credit card statements, banks accounts, bills and a list of out-of-pocket expenses so you can make a budget and know what you're entitled to ask for financially.

"Literally, take the whole filing cabinet to Kinko's and photocopy everything," says Chicago divorce lawyer Beth Fawver McCormack, who also recommends "dumpster diving" for information that was thrown in the trash and putting keyboard sweeping software on shared home computers to find out about hidden bank accounts, businesses or other information. (If it is not a shared computer, but one used solely by your husband, seek counsel first.)

If you plan on charging that joint marital assets were squandered on a mistress, drugs or gambling, you can most likely get some of that money back, but you need proof of what was spent. More reason to dig through the trash, credit card bills and shared computer. By the way, if you find out about an affair and then resume a relationship with your husband--go on vacation or even have marital relations--you can no longer hold the affair against him in court. So if it's over, make sure it's over!

Hire a Lawyer Who'll Work With You
This may seem like an obvious one, but women often go from letting a man at home dictate their lives to letting a lawyer do the same, says Rubin. "You need to educate yourself about your rights, so you can direct the lawyer. The lawyer is going to walk away, he'll be paid and you'll never see him again. Meanwhile, you have to live with his decisions forever."

Rubin shares how, during her divorce 15 years ago, her lawyer routinely made decisions without consulting her, and even went so far as to tell her that she didn't "need" a car when she requested one of the family automobiles. "I should have known from the beginning that he was talking down to me," she says. "The way your lawyer talks to you is a big deal."

It's better to fire a lawyer you feel uncomfortable with sooner rather than later, says Rubin, because after a while, he or she will be too entrenched in your case. "If you are always being forced into a corner and constantly giving in to the other side, that is a bad sign."

Face Today's Tough Economy
The economic downturn has made divorce more complex than ever. Because a couple's largest asset is often their home, and most homes have lost some if not all of their value, selling a home and splitting the sale 50-50 is less attractive than ever. The situation is so bad, says Nancy Chemtob, a New York City divorce lawyer with celebrity and billionaire clients, that many couples are putting off divorce until their financial situation improves. This way, homes and stock options don't have to be sold and split with neither party making a dime.

"They might agree to stay together until the fair market value of the house is X amount of dollars," says Chemtob. However, since 2008 tax returns are used for a divorce filed in 2009, some parties might decide to take their chances and "cash out" of the marriage before things get even worse. One may hope for a lower than usual valuation on assets, so that they can buy out the other party at a discount.

Consider Legal Alternatives
Divorce can be acrimonious, but for those couples that are amicably going their separate ways, or maybe just want to avoid the trauma of a courtroom, something called Collaborative Law, a fairly new process offered as an option in most states, may be the way to go. "At the end of the day, it can be a better outcome because both parties arrive at a solution, rather than leaving it to someone in a black robe," says McCormack, who says about 10% of her clients decide to use the collaborative method. It can also be much less expensive and less taxing on children.

While each party is represented by attorneys who are certified in collaborative law, each must also sign a contract committing to stay out of court. If the process falls apart and the parties decide to take it to court after all, they need to start from scratch and hire new lawyers. "You don't put away the law, but you become a team dedicated to deciding what is best for the future of you both," she continues. More information can be found on collablaw.com.

Other people might choose to use a mediator, a somewhat different approach. Here, an independent third party trained in mediation is retained to help each party reach an agreement. Lawyers can be consulted during the mediation process, but usually aren't (to save money). However, each party must individually consult a lawyer before the mediation agreement is signed. Mediators (you can locate one near you on Mediate.com) can recommend "mediation-friendly" lawyers. Depending on how complex the divorce is, one can have anywhere from a few to a dozen mediation sessions. Divorce coach Margery Rubin warns that mediation will not be successful unless both parties are communicative and trust each other.

If you are thinking about divorce and want more information, please visit our website or call the office to schedule your initial consultation. We employ a client based approach, which means that we are selective in the cases we take so that we can be available to our clients. We spend time with you to thoroughly understand the facts of your case, so that we can provide you with a comprehensive and realistic legal evaluation. Our process begins with a half-hour low-cost consultation, all of which is credited back to your account if we accept your case.