Category Archives: Divorce Finances
How debt is divided in an Illinois divorce.
Debt can be a touchy topic, especially when the discussion turns to making payments. Some people adopt an “out of sight, out of mind” perspective when debt is concerned; however this is a dangerous mindset to encourage. That is perhaps especially true when it comes to spouses. It is essential to understand how the law in Illinois works when determining who is responsible for credit card debt in the state. You might find yourself liable even if you weren’t the individual who initially took out the loan or credit card.
The Family Expense Act
Almost every family experiences some crisis at some point. For many, that means that they might find themselves in dire need of money and scramble to find sources. This naturally leads to things like loans or credit cards being obtained to help keep the family as secure as possible in the midst of a crisis. Taking care of our family tends to trump everything else, regardless of whether taking a credit card or loan out is the best option at the time.
In the state of Illinois, it is possible for spouses to be held accountable for each other’s debts. If the debt was taken out to benefit the family, then it doesn’t necessarily matter which spouse signs the contract. All that matters is that the debt existed and was acquired during the marriage. If you divorce your spouse before that debt is resolved, you could find yourself responsible for making payments. This isn’t true in every case, however, and there are some guidelines you should keep in mind.
What counts as a “family expense”?
Mentioned briefly above, the Family Expense Act makes spouses jointly responsible for debts that are taken out during a marriage to sustain or otherwise help the family. That means that the expense has to be something that applies to the family in general. In general, these debts also must be used to specific expenses, not just money loans that are taken out with no real reason behind them. Some expenses included in this act include:
• Medical Bills
• Clothing
• Certain Types of Jewelry
• Funeral Bills
• Rent
• Carpeting
• Domestic Servant Wages
As you can see, the expenses above all have a purpose that helps sustain the family, with the possible exceptions being certain kinds of jewelry. If you end up in debt due to trying to pay rent, pay medical bills, or buy clothing – for work or your children, for example – that debt might be considered a family expense. Even work clothes often qualify under this act since adhering to a dress code is often a vital part of keeping a job, and that job sustains the family.
What can I do if I’m being held responsible for my spouse’s debts?
If you are being held responsible for debts that you didn’t take out and that you don’t believe should qualify as a family expense, your best bet is to reach out to an experienced family law attorney in Illinois as quickly as possible. They can help better decide whether the debt in question qualifies under the Family Expense Act and who should be legally responsible for paying it.
For more information about who is responsible for paying the debt in Illinois, reach out to the experts at Abear Law Offices today!
Business Valuation and Divorce
Divorce is an overwhelming time even when the process is as simple and straightforward as possible. When one of the spouses in question owns a business, divorce can become an incredibly complicated affair. Remember that marital property is split during divorce proceedings, and your business might be considered an asset that belongs to the marriage – and, as a result, divided along with everything else. Business valuation, then, is often an important part of the separation process.
The real question, of course, is how exactly a business’s worth is determined. There a few different things to keep in mind when it comes to this particular process.
Structure Matters
What structure is your business? There are a variety of different options, and each operates in a slightly different way:
• LLC: Also known as a Limited Liability Company, this kind of business is owned by members that can include corporations, individuals, foreign entities, and even other LLCs.
• Sole Proprietorship: This kind of business is owned by a single individual and is not incorporated.
• Partnership: A partnership refers to a business owned by multiple individuals who all dedicate their labor, skill, property, or money to the business and expect a portion of its losses and profits as a result.
• Corporation: This kind of business is owned by shareholders and its profit is distributed to these shareholders.
Determining the type of business you own is the first step in estimating its value. An experienced attorney can be incredibly helpful when it comes to this process, and might be able to help you ensure a fair and painless valuation.
Selling the Business
Once you understand the type of business in question, you can begin to figure out its value. One of the easiest ways to do this is by selling the business and then dividing the profits. This is a good option for individuals who are hoping to completely sever financial ties with their ex. It is most likely not a good option for individuals who want the divorce process to be a quick one, however, as selling a business can take quite a bit of time.
If you are hoping to avoid selling the business, as an aside, you can also opt to dissolve the business or buy out your spouse. The first option is another way to cut financial ties like credit or debt that is attached to the business. The second is, of course, the option to go for if you are hoping to keep the business.
Track Down Assets
Another important step in valuing your business is ensuring that you have located all of the relevant assets. This is a particularly difficult step, especially if you believe that some of those assets might be hidden. It is important that you reach out to an experienced attorney who has the skills necessary to carefully analyze your business holdings and determine likely “hiding” spots.
If you are contemplating a divorce and need help valuing your business, reach out to the professional team at Abear Law Offices! Our passionate team is ready to assess your case and start building a winning legal strategy today.
Divorce and Taxes: What You Should Know
Divorce is not an easy process to undertake. It’s one that impacts nearly every facet of your life, in fact, and that is perhaps most true when it comes to finances. In any divorce case there tend to be significant financial issues that can arise. These might take a variety of forms, including disputes regarding things like spousal support to the division of your marital property. As the dissolution of your marriage continues forward, then, it should come as no surprise that you might encounter significant financial struggles. Some of the most common of these are related to taxes and how you should file them as a result of your divorce.
Thanks to a new tax law set to go into effect on December 31st, 2018, divorcing couples could see some dramatic changes to the way they file taxes as well as spousal maintenance in the coming year. Let’s look at the change and how it stands to impact you.
Income Tax Returns
One of the main tax concerns that arises because of divorce is filing income tax. Married couples who file jointly are often eligible for tax deductions and breaks that are simply not available to single individuals. That means that, just as you must adjust to filing your tax return as an unmarried individual once more, you should also look at what deductions or tax breaks you have been receiving while married that you can no longer count upon now that you are divorced. Some of these might include:
- Child Tax Credit
- Mortgage Write-Offs
Spousal Maintenance and the New Tax Law
In addition to the issues described above with income tax returns, the new tax law will also impact the way in which spousal payments can be deducted. Before the change, it was possible for the spouse paying support to deduct the amount from their income on their tax return while the individual receiving the support had to include the money they received as income on their own tax return. Under the new tax law set to go into effect on December 31st, 2018, however, this process changes. Spouses paying support will no longer be able to count the payments as deductions and the individuals receiving them will no longer have to count them as income.
As you can see, the new tax law stands to significantly impact many individuals currently making and receiving spousal support payments. Some might find this change to be beneficial, however many individuals will find themselves confused and put out by the news.
At Abear Law Offices, we understand how you feel. We can work with you to help ensure you not only file your taxes correctly under this new law, but also that you are treated fairly throughout the divorce process itself. For more information, contact us today and speak to one of our experienced staff members!
Thanksgiving and Divorce
Thanksgiving is just days away and many families are planning their festivities with extended family. Yet while these celebrations may be gleefully anticipated for some, recently divorced couples and those experiencing irreconcilable differences may not feel the same.
High Asset Divorce Also Has Its Issues
There are times when divorce is a necessary step couples must take in order to promote a better life between both parties. However, if a couple’s divorce includes high assets or no assets at all, the process can be financially and emotionally straining.
Marital Property and Illinois Divorce
A divorce can be one of the most unpleasant experiences in a family’s life, especially when much time has been put into the relationship and in trying to give the best quality of life possible to everyone involved.
Property and Divorce
When going through a divorce, each spouse may have certain assets that he or she desires to keep—the marital home, family gifts, a boat, bank accounts, pensions, etc. Therefore, when it comes time to divide these assets, there may be tension. Hence, when dividing property and assets, each spouse needs to have a thorough understanding of the process.
Unwed Parents and Child Support Obligations
Having a child can be one the happiest moments in a couple’s life, with the child being everything that the couple could ever imagine. However, not all childbirth occasions are happy or joyous, especially when a child’s parents are no longer together. In fact, having a child can make for a huge burden, emotionally and financially.
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Taxes and Divorce – What Every Disadvantaged Spouse Should Know
Couples often assume that a finalized divorce is the end of their separation journey, but nothing could be further from the truth. Steps must still be taken to complete the unraveling of finances, and there are still some areas in one’s life that can be impacted by a divorce. For example, a divorce can affect a person’s federal income taxes. Learn more about taxes and divorce for disadvantaged spouses, and how some of the decisions you make now may impact you when you file your taxes next time.
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Should You Settle Your High Net Worth Divorce Case?
Divorcing couples who have a high net worth often expect a long, drawn-out, contentious battle. Thankfully, divorce does not have to be this way. In fact, many couples find they can resolve matters outside of court, with less stress and cost. The key is knowing if and when you should settle. Perhaps even more important is knowing when not to settle your divorce case. The following information explains further.
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