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Student loan debt is currently at an all-time high in the United States ($1.5 trillion), and it is creating excessive financial stress for married couples all over the country. In fact, a survey of divorced couples revealed that student loans were a factor in one-third of all failed marriages, and a total of 13 percent specifically blamed student loans for the end of their relationship. How are these debts divided when a couple pursues a divorce, and how can a seasoned divorce attorney help protect your financial well-being during the process? The following information explains.
How Student Loan Debt is Divided in an Illinois Divorce
Debts, like assets, are divided equitably in an Illinois divorce. What this essentially means is that the assets, income, and future earning potential of each party is considered when determining how the debt should be split. The one exception that may apply is if the debt was incurred prior to the start of the marriage; in this instance, it is typically considered pre-marital debt, and the owner of the loan is usually responsible for repaying it on their own.
Divorce can significantly impact the mental, emotional, and financial well-being of any child, but those who have special needs’ are at an especially high risk. When one takes into account that an estimated 10 percent of the population has a family member with special needs, and the risk of divorce is significantly higher for them when compared to the general population (an estimated 86 percent compared to 50 percent), the importance of proper divorce planning becomes clear. Learn more about how to approach the process in the following sections, and discover how a seasoned divorce lawyer can help to improve the overall outcome of your case.
Understanding What Could Be At Stake
Minor and adult children with significant disabilities often need a lot of support from their families, health care professionals, community, and government. Unfortunately, if their parents go through a divorce and the process is not approached carefully, it may render the child ineligible for many of these types of assistance. As a result, the physical, mental, or financial well-being of the child may be negatively impacted.
When it comes to divorce, parties often wonder when is the best time to file. Some make their decision based on circumstance (i.e they are fighting more frequently). Others base it on emotion (which some believe to be the driving factor behind the peak divorce times each year). While neither is necessarily “wrong,” they are not the best determining factor for determining when to file. Learn what determining factor may give you the best possible chance at a favorable outcome in your Illinois divorce, and discover how a seasoned attorney can help you prepare for the process.
Basing Your Decision on Financial Standing
The end of a marriage can be emotional and tumultuous, but basing your decision on emotional and circumstantial factors alone can leave you (and your spouse) at risk for financial devastation. Part of this can be attributed to the divorce process itself, which is financial, rather than emotional or fault-based. Having a one-income household or being in the dark about your financial situation can further exacerbate the problem. Thankfully, if you base your decision more on your financial standing and readiness, rather than other factors, you can mitigate many of the money-related risks that are commonly associated with a divorce.
Although a divorce does not have to affect your credit, it can. The possibility of reduced income, moving expenses, and actions or inactions of your spouse are all possible causes, but once the divorce is finalized, there is only one real solution: rebuilding your credit. Learn more about how to do this in the following sections. More importantly, learn how a seasoned divorce lawyer could reduce the chances that you will experience adverse credit issues during your divorce.
Make a Plan - Jointly and Independently
Perhaps one of the best ways to mitigate the risks of credit issues during and after your Illinois divorce is to sit down with your spouse, take an inventory of your finances and debts, and develop a plan. Discuss your options, such as:
Money is often one of the leading sources of contention during a divorce, and it is about to get worse, thanks to the new tax law regarding alimony payments. Set to take effect on January 1, 2019, this new law will eliminate the tax credit that paying parties used to receive at the end of the year. Learn what this could mean for your Illinois divorce, and discover how a seasoned divorce lawyer may be able to help you mitigate the potential risks and issues that could arise.
A Closer Look at the New Alimony Tax Law
In previous divorces, and those completed before January 1, 2019, alimony payers receive a tax credit at the end of each tax year. The receiving party is also required to report their alimony payments as income to the Internal Revenue Service (IRS). Both of these aspects of divorce will be changing at the beginning of next year. That means there will no longer be an incentive for paying alimony, and fewer parties will be willing to pay it. That can hinder the financial well-being of receiving parties, as well as the paying parties, perhaps even more so than many realize. It can also make for more contentious divorces, and that can increase the stress levels of all involved parties - especially any minor children that the couple may share.
Deciding whether to sell the family home is one of the biggest and most difficult decisions that a couple must make during an Illinois divorce. On the one hand, there may be memories attached to the home (which can be both a positive and a negative), and some parties may face challenges when trying to find a place of their own because they have been financially reliant upon their spouse. On the other hand, parties must be practical about their situation, which requires them to examine the pros and cons of either selling their home or keeping it.
Taking the First Steps
Before making any decisions, parties are encouraged to first determine the house’s value through an appraisal. Then determine what the home will cost the party who keeps it (be sure to include HOA fees, insurance, and upkeep in your assessment). Once armed with this information, parties can then decide whether keeping the home is a financially sound decision, or if it may end up being too cost-prohibitive for them. (Note that financial advisors discourage consumers from spending more than 25 percent of their total income on their home.)
Money can be one of the leading sources of contention when a couple goes through a divorce, but statistics also indicate that it is also one of the biggest stressors in a marriage. In fact, there are five bad money habits that can almost predict whether a couple will call it quits. Learn what they are, and discover how a seasoned divorce lawyer can help protect your assets if you are planning to pursue an Illinois divorce.
Hiding Money in Your Marriage
Everyone enjoys having a little spending money of their own, but if you are not telling your spouse a bank account, savings account, or cash, you could be in some serious trouble. Not only does this hiding of money create resentment and break trust within your marriage, it may also be perceived as intentional financial abuse or asset hiding in your divorce. As a result, you could stand to lose far more than you were trying to hide.
Hiding Debt from Your Spouse
Couples do not usually enter a marriage with the intention of someday divorcing, but statistics indicate that just a little under half of them do. It is that high rate of divorce (and the potential losses that may ensue because of one) that is causing many millennials to take preventative steps. One of the most crucial is the drafting of a prenuptial agreement. Unfortunately, these documents cannot cover every aspect of your marriage, and there is always the risk that one (or all) of the terms will not hold up in court. Learn how to “bulletproof” your prenuptial agreement, and discover how a seasoned family law attorney can assist you with the process.
Starting Your Marriage with Transparency
Honesty and transparency are the cornerstones of a healthy marriage, and a prenuptial agreement can help you incorporate these qualities into your marriage, early on. Of course, you can attempt to hide or inflate your wealth in a prenup, but it is never wise - and not just because it is dishonest or deceptive. By not disclosing any wealth you have, or by intentionally inflating it, you can completely void your prenuptial agreement. As a result, your document may not be honored in court, and you may lose even more of your assets through penalties from the court. Avoid this prenuptial agreement mistake by ensuring you are honest about all the assets you have and expect to earn in the future, and always be transparent with your spouse about losses and gains that occur over the course of your marriage. Also, ensure you avoid any inadvertent mistakes by talking to a lawyer about your assets prior to the creation of your prenup.
While a Guardian Ad Litem may not be necessary in every divorce case, they are sometimes needed to ensure that the best interests of children are preserved during proceedings. Should you request one, and how do you deal with it if your spouse or the courts have brought on into your Illinois divorce case? The following information explains, and it provides information on how a seasoned divorce lawyer can assist with the process.
What is a Guardian Ad Litem?
Guardian Ad Litems are court-appointed unbiased third parties that look out for children in legal proceedings, such as divorce. They do not take sides. Instead, they interview all involved parties along with other individuals in the child’s life (i.e. teachers, grandparents, etc.). They then make a recommendation to the court, based on the evidence they have found. Mostly, they are looking for signs of abuse or neglect that could potentially endanger the child, and they make recommendations to protect the child from such issues.
Divorce can spark feelings of grief, even in people who are fully prepared to end their marriage. Sadly, it is often those who initiate divorce who are not prepared for the emotional pain that often accompanies the process, and that can place them at a significant disadvantage during the legal proceedings of their case. Avoid this issue by learning how you can cope with grief during your Illinois divorce, and discover how a seasoned divorce attorney can help to ease the process.
Understanding Why Grief Occurs
Even when you are the initiator in a divorce, grief may occur. Sometimes it is because parties feel like the end of their marriage as a failure. Other times, it is because there are children involved, and seeing them in pain can be emotionally painful. Still, there are situations in which no obvious reason can be found. Instead, the parties may simply feel this overwhelming sense of guilt, sadness, or remorse over the way things ended. Perhaps it is because the party did not want their marriage to end, but they had to come to terms with the fact that it was no longer healthy or productive, or maybe they grew out of the relationship but still care deeply for their spouse. Whatever the case, the grief must be dealt with in a healthy way. Otherwise, the party may end up saying and doing things that are out of character or that could sabotage their proceedings.
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