Hidden Consequences to a Division of Debts in Divorce

By Donald A. Hayes, Attorney at Law

 


Hidden Consequences to a Division of Debts in Divorce

Hidden Consequences to a Division of Debts in Divorce in California must be identified. When a debt or obligation is divided by the family la court and awarded to one of the spouses. Regardless of which spouse was assigned the debt by the property division judgment, the debtor spouse remains personally liable for his or her debts incurred before or during marriage. In satisfying those debts, creditors may reach the debtor spouse’s separate property, as well as his or her share of the community estate received in the property division. Continue reading

How does the Court Divide a Negative Asset in a Divorce Case?

By Donald A. Hayes, Attorney at Law

 


 

The downturn in the real estate market has created new legal issues concerning what the divorce court will do to divide distressed real estate. One type of distressed real state comes to mind: “upside down property” where the mortgage balances exceeds the fair market value.

The question becomes should a party requesting that he or she be awarded an upside down property in the division of community property receive a credit for the property’s negative equity, or only receive the property at zero value.

When the entire estate is positive, but the real property is upside down, the Court is required to make a mathematically equal division of the parties’ community property assets and liabilities pursuant of the mandates of FC §2550. Continue reading

Leveraging Retirement Plans in Divorce Cases

By Donald A. Hayes, Esq. Attorney at Law

 


 

The divorce court has a duty under Family Code §2550 to divide the assets and debts of the parties in an equitable manner. As a general rule, the trial court is vested with discretion in selecting a method to effect distribution of the community interest in pension or retirement plans. The court may divide the pension awarding the non-employee spouse a community interest to be paid at the time the employee spouse retires; or it may order the plan to be valued by an actuarial expert to determine its present which often can be quite a large amount. Which method is adopted will vary with the facts in each case and the matter is left to the sound discretion of the court to apply which method which would reach a reasonable result. Continue reading

Methods of Division of Community Property other Than by Judicial Intervention

By Donald A. Hayes, Esq. Attorney at Law


 

 

There are alternatives to having the court decide who gets what in a marriage dissolution. You can do it yourself and control the process without having the court do it for you. Here are just some of the methods that can be employed.

An “in kind division” is where each party takes one-half of fungible assets such as bank accounts, stock, IRA accounts, etc. Another method is where the parties agree to “trade off” certain assets for others. This method is usually done without regard to value whereby one party simply agrees to take certain items of property and the other agrees to take other items of property, a kind of horse trade. Continue reading

The Impact of Obamacare on Divorce

By Donald A. Hayes, Attorney at Law

 


 

Losing health insurance following divorce is a significant problem for women. Many women do not hold employment outside the home, or work for employers who do not provide insurance. It is a fact that many couples who would like to get divorced simply stay together because of fear they will lose their spouse’s health insurance coverage and may not be able to get their own either because they have pre-existing conditions or simply cannot afford it on their own. Typically those people sought a legal separation rather than a divorce so they could stay on the spouse’s coverage. It worked until the spouse carrying the insurance wanted to get remarried, then the problem re-emerged anew. Continue reading

What are the Ramifications of Cash Advances

By Donald A. Hayes, Attorney at Law


 

Section 523(a)(2)(C) of the Bankruptcy Code specifies that cash advances on credit cards aggregating more than $1,000 which are obtained within 60 days prior to the filing of bankruptcy are presumed to be nondischargeable. The creditor can file a complaint to determine dischargeability of that specific transaction in the bankruptcy case. The burden is then shifted to the debtor to produce evidence to rebut the presumption of nondischargeability. Ultimately the burden of persuasion is always upon the credit card company to establish that the debt should not be discharged. The law was enacted to prevent debtors from Aloading up@ or going on buying sprees in anticipation of bankruptcy. Continue reading

What Does > Means Testing = Actually Mean?

By Donald A. Hayes, Attorney at Law

 


 

For the third consecutive year, a record number of consumers have filed for bankruptcy protection during 1998. According to the Administrative Office of the U.S. Courts, nearly 1.4 million non business bankruptcies were filed in 1998. When compared to only 44,367 business bankruptcies, it works out to 31.5 consumer filings for every business filing. As usual the Central District of California was the busiest bankruptcy court in the country with 116,194 new filing during 1998. The number of new chapter 7 filings alone increased last year and for the first time set a record of more than 1 million new filings. Continue reading

What Happens to Secured and Unsecured Debts in Bankruptcy?

by Donald A. Hayes, Attorney at Law


 

When I receive a phone call from someone seeking information concerning the Bankruptcy process the conversation goes something like this. Have you ever filed before, are you in trouble with a home loan, income taxes, a lawsuit, a garnishment, or credit cards? Do you have any equity in your house, do you own any other real estate, and what are your assets? These basic questions tell me a lot about what type of bankruptcy I think you can benefit from most. A Chapter 7 bankruptcy will enable you to discharge all of your secured and unsecured debts with certain exceptions. Personal lines of credit, lawsuits and most all credit cards are unsecured debts which are dischargeable, unless they fall into one of the exceptions to the dischargeability rules.   Continue reading

What Property Can I Keep if I File Bankruptcy?

By Donald A. Hayes, Attorney at Law


 

A trustee who administers a Chapter 7 Bankruptcy case will seek to take possession of all non-exempt property, sell it and turn it into cash to pay dividends to all unsecured creditors. This sounds very threatening for those of you who are considering filing Chapter 7, however the truth of the matter is very very few chapter 7 cases ever result in a debtor losing any property. In my 20 years of practice, I have not ever handled a case where the debtor lost any of their property by filing Chapter 7. The reason for this is the fact that the Bankruptcy Code provides a well delineated set of exemptions which allows the debtor to exempt and to keep a wide range of property. Continue reading

Reaffirming Debt in Bankruptcy

By Donald A. Hayes, Attorney at Law


 

 

Your discharge in bankruptcy relieves you of the legal liability to pay debts that are discharged. You may decide that you voluntarily want to pay a debt that has been discharged and there is no prohibition against your doing this. However, you are not required to reaffirm any debt or sign any agreement regarding a debt that has been or will be discharged in your bankruptcy. If the debt is reaffirmed it must be signed by the debtor and his attorney, and approved by the court. Even though the discharge means you do not have to pay the debts that are discharged, in some cases a creditor will have a security interest in some property. This means that the creditor will be able to take it if you do not pay the debt. Continue reading