Divorce Without Dishonor

If you are in the throes of divorce, it’s important to protect your credit. Your finances can take a real hit during divorce; and women usually suffer more than men, writes Katherine McKee for FirstWivesWorld.com (read our previous post for a review of the website). “Without a solid credit history in your own name, you won’t be able to qualify for re-financing the marital home. And you’re also likely to end up with high-interest credit cards and auto loans,” she warns.

Follow these tips to protect your credit rating during and after divorce:

• Pay off joint debts. Until they’re paid, you’re both responsible. If they can’t be paid, freeze the account so neither of you can increase the debt.
• Get a credit card in your own name, then cancel joint credit cards. Make sure you remove your name as a user on your spouse’s cards to prevent their credit issues from also being reported under your name.
• Pay off car loans and retitle each vehicle in only one name.
• If you have trouble paying monthly bills due to illness or job loss, talk to your creditors and work out a payment arrangement. Unpaid debt will be reported and can lower your credit score.

For more tips, click here to read the whole article.

You’re probably still paying Christmas bills, and tax time is already rolling around. Money — and how to save it — is on everyone’s mind. Divorce is expensive and protracted litigation can increase costs exponentially, leaving you and your spouse with staggering legal bills to contend with as you as you each struggle to begin a new phase of life. While collaborative divorce is not necessarily cheap — a lot depends on the complexity of the issues and the number of meetings required to resolve them — it does allow you to exert better control over your divorce costs.

By choosing collaborative divorce, you and your spouse make a commitment to spending your resources on your family and not on a contentious legal battle. You make a conscious decision to place the needs and support of your children above petty — and legally expensive — battling with your spouse.

Most often, children whose parents divorce face a future with significantly less financial security that children from intact marriages. It simply costs more to maintain two households than one. Funds for school trips, enriching activities, and college are often limited or non-existent. Collaborative divorce allows you and your spouse to design a child support arrangement that meets the needs of your specific family. You do not have to contend with arbitrarily imposed court requirements, but can work together to provide your children with maximum financial stability.

Divorce and financial stress seem to go hand-in-hand. Despite new laws enacted in 2005 that tightened the requirements for bankruptcy, many people still see it as an easy way out of crushing financial debt. Unfortunately, some spouses also believe bankruptcy will allow them to escape their spousal or child support obligations during and/or after divorce.

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act closed most of the loopholes that used to affect the unfair discharge of family obligations. Debtors seeking protection under bankruptcy laws must now meet a means test tied to income and debt which limits their filing choices. (Click here for a rundown on the various types of bankruptcy and how the process works.) Today, it is extremely difficult for debtors to evade their spousal and family responsibilities. Under the 2005 act, domestic support obligations cannot be discharged and must be considered a first priority claim.

There are still opportunities for abuse, however; and the prudent person will seek legal counsel if their spouse or ex files for bankruptcy. For example, secured debt receives precedence in bankruptcy proceedings, after which there may not be enough money left to fully pay non-secured debts, even first priority claims. And while a bankruptcy stay (period of time during which creditors cannot act against the debtor) no longer applies to support, domestic violence and custody matters, it does delay the distribution of property and assets.

Despite protections provided under the new 2005 act, if your spouse or ex files for bankruptcy, you should seek legal counsel to protect your rights as a creditor. You should obtain copies of your spouse’s bankruptcy schedules which disclose income, property, etc. Your attorney may need to file adversary complaints or proofs of claims to protect your interests. Under one bankruptcy plan, a debtor can still escape paying accumulated support arrears. If bankruptcy proceedings impact your divorce, it is important to consult an attorney to protect your interests and those of your children.

Marlene Browne, author of Boomer’s Guide to Divorce and The Divorce Process: Empowerment Through Knowledge has written an interesting article on the changes in bankruptcy law. To read the article on Forbes.com, click here.

Mary Whisner at shlep, the legal self-help blog, points to an article on "The Many Costs of Conflict"

What do you make of a new book on divorce for women by attorney Sherri Donovan: Hit Him Where It Hurts: The Take-No-Prisoners Guide to Divorce–Alimony, Custody, Child Support, and More.

Mary Whisner at shlep, the legal self-help blog, points to an article on "The Many Costs of Conflict" by dispute resolution consultant Stewart Levine, which describes the heavy financial, emotional, and other tolls that conflict exacts.

According to Levine, these include:

Direct Cost: Fees of lawyers and other professionals

Productivity Cost: Value of lost time. The opportunity cost of what those involved would otherwise be producing.

Continuity Cost: Loss of ongoing relationships including the "community" they embody

Emotional Cost: The pain of focusing on and being held hostage by your emotions
It made me wonder what shlep and Levine would make of a new book on divorce for women by attorney Sherri Donovan: Hit Him Where It Hurts: The Take-No-Prisoners Guide to Divorce–Alimony, Custody, Child Support, and More.

The pugilistic theme doesn’t end with the title: the book jacket is adorned with a photo of a blood-red boxing glove. Chapters include "Are You Ready to Rumble?", "Divorce Ain’t for Sissies", "Sizing Up Your Opponent", "Conditioning for the Fight of Your Life", and "Psyching Up for the Fight".

It should leave us all asking what kind of casualties result when divorce is framed as either prizefight or combat.