Month: August 2021

Covid and Your Divorce: what now?

in Divorce

Be Patient

Divorce proceedings, including uncontested divorces (which are usually the quickest and least expensive way to get divorced) are taking an extended amount of time because of Covid. Courts are closing intermittently, staff is working in shifts or from home, judges are taking their time getting through civil matters when more pressing criminal matters are also occurring at the same time. 

Assemble a team

We have talked about this before but having a team is so important.  Having an attorney (which is likely why you’re here), a group of reliable friends, close family, a therapist or counselor (we can’t overstate how important this is) and a financial advisor.  All of these people will help you with what is sure to be an enormous change in your personal life especially during a global pandemic like Covid. 

Plan for the Unexpected during Covid

There’s a commercial that says, “Life comes at you fast.” That’s extremely true but more so after a divorce.  You’ll need to update things like medical directives, wills, life insurance and pension/retirement beneficiaries. These things are increasing important because of Covid. 

If you have a medical emergency where someone else will have to make decisions for you, you’ll need to work that out before the divorce is finalized, especially if you have minor children and/or your parents are deceased. You’ll need to appoint a new power of attorney for your affairs and your medical care so there’s no question about your wishes should the unthinkable happen. 

You’ll also want to remove your spouse from your will unless your divorce decree specifically leaves property to your spouse in the will.  While you don’t have to wait until the divorce is finalized, it’s usually best so everyone has time to work out the finer points of the decree. 

Changing beneficiaries is also important.  It doesn’t matter who you are married to, beneficiaries on life insurance policies and retirement accounts go to who they are designated to go to and it’s extremely difficult to undo that after someone passes. 

Of course if you have minor children that adds other considerations as well. You can likely hash that out in the divorce decree. 

Because of Covid, Work the numbers

One of the things you’ll need to look at is how you’re going to pay for your lifestyle now that you’re going to be all on your own.  If you’ve been working, you’ll need to ensure that your income will meet your needs since you’ll likely be dropping a source of income. If you haven’t, will the alimony and/or child support be enough or will you need to work as well?  Will you be able to afford the house, car, boat, motorcycle, etc. that you’ve been accustomed to.  If the answer to that is no, we can help, but that’s a different topic for a different day. 

In the end, divorce is hard on everyone, even if it’s uncontested.  It’s a major lifestyle change and we encourage everyone to take the necessary steps to come out better on the other side.  If you and your spouse have decided that your marriage has run its course but you want to end things in an amicable way, call me.  I’ve helped hundreds of people end their marriage with dignity and civility. 

Does my bankruptcy go in the newspaper?

in Bankruptcy

newspaper

THE VAST MAJORITY OF BANKRUPTCIES DO NOT GO IN A NEWSPAPER

One of the main concerns people have is whether or not people will know about their bankruptcy.  The long and short of it is, they COULD find out, but it won’t be in the paper or splattered all over the internet.  

While it’s true that bankruptcies were occasionally published in the distant past, (think 40-50 years ago) today bankruptcy is so common that newspapers can’t possibly devote that much space to outing those people who seek bankruptcy protection.  

In some jurisdictions, business bankruptcies are published but that’s generally to alert any creditors that may not get notification through the bankruptcy court.  There are so many personal bankruptcies that it would be both space and cost prohibitive to publish them.  

WHAT ABOUT INDEPENDENT CONTRACTORS?

Maybe you’re a 1099 employee. Uber drivers, multi-level marketing consultants (think Avon or Rodan and Fields), Realtors and truck drivers.  They also don’t get published in the newspaper.  If you’re worried that you might end up in the newspaper of that the town crier will be singing it out in front of the courthouse steps, come see us.  We’ll be happy to answer all your questions about the bankruptcy process and give you HONEST answers about what you will and won’t encounter.  

Maybe you are wondering about independent contractors like Uber or Lyft drivers, multi-level marketing consultants, realtors or some truck drivers?  They don’t get listed in the Star Tribune either.

HOW DO PEOPLE GET INFORMATION ON BANKRUPTCIES?

I know you probably ask this question because you’ll see it splattered all over the news when companies like GM or Chrysler or major celebrities like Donald Trump, Michael Vick or 50 Cent file bankruptcy.  One reason why you see it is…these are huge multinational corporations and celebrities who live lavish public lifestyles, not someone who’s just a little behind on their bills. 

As I stated in the opening paragraph, people COULD find out about your bankruptcy. The federal government has a website called Public Access to Court Electronic Records (PACER) which shows all federal court filings including bankruptcies.  Here is a link if you want to peruse the court filings (hot tip: it’s very boring).  

To search bankruptcies or any other federal court filing, you first have to have a username.  You can get one but it’s a little cumbersome.   Then you have to pay $.10 per page to access the court filings.  Additionally, a lot of people file federal court cases so a generic name search isn’t going to necessarily turn up your name. So unless they have your Social Security number (they probably don’t) it’s going to be hard to find your information.  

So, long story short, there’s a really good chance that no one will ever know you filed bankruptcy outside of your creditors and anyone you tell yourself.  If you have questions about the bankruptcy process, call me.  I’ve been doing this a long time and I’ve helped thousands of people get out of debt.

Is the Child Tax Credit Protected in Bankruptcy?

in Bankruptcy

WHAT IS THE 2021 CHILD TAX CREDIT?

Parents across the country should have received their first couple of payments from the child tax credit enacted by congress in early March.  Congress voted in March, 2021 to give parents up to $3,600 to help offset the cost of raising their children.  If you are curious about how much you’ll get or if you want to change where the money is sent, you’ll need to visit  this website.

THE 2021 CHILD TAX CREDIT IS PROTECTED IN BANKRUPTCY 

Kids are expensive, I know…I have two. The extra money helps us all out and gives us a lifeline during these difficult financial times. I know that my clients need this extra money to make ends meet.  Fortunately, filing bankruptcy allows you to KEEP YOUR MONEY.  11 U.S.C. Section 541(b)(11) exempts this money from the bankruptcy estate because it was created expressly for the COVID relief package.  

HOW DO TAX CREDITS AND TAX REFUNDS NORMALLY WORK IN BANKRUPTCY

While this credit as well as stimulus funds are protected in bankruptcy, you should talk to your attorney to see what other parts of your tax refunds are protected in bankruptcy.  In a Chapter 13, you can usually keep around $1,500 of your tax refund without question, sometimes more if extenuating circumstances arise.  In a Chapter 7, if you are owed a large refund at the time of filing the trustee can seek to recover those funds if they are outside the exemption, but going forward the trustee will have no further claim to your tax refunds.  Obviously it’s our job to strategize with you so you can keep more of your hard earned money.  

If you have questions about bankruptcy or want to explore the protections bankruptcy provides, we’re just a phone call or message away.