Author: Amanda Barrett

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The Rings, After the Divorce

There are a lot of decisions that have to be made when a couple decides to divorce.  There are marital debts and the division of assets that must be discussed and negotiated.  What do we do with the wedding videos, pictures and other momentos? Do I hold on to the dress? Who gets the dog and who gets the cat?  I want the sofa and you want the bed. One of the things that often gets overlooked is what to do with the rings. The wedding rings hold a great deal of symbolism and quite possibly, monetary value.  

There are lots of options for dealing with now unwanted wedding rings and lots of questions as well.  Does the woman automatically hand her wedding rings back to her soon to be ex considering that he gave it to them.  Do exes keep the rings to give to their children one day when they get married? Do they go down to the nearest pawn shop or jewelry store and ry to get as much monetary value from them as possible.  Honestly, there’s no one right answer. What works for you may not be what someone else does and you have to make your own decision based on your personal feelings.

All things considered, what are my options?

The feelings you have about your wedding rings are very personal.  Some people may look back and remember, “the good times” in the relationship.  Some people, especially those with children may want to hold on to the ring(s) to pass down to children due to sentimental value.  On the other hand, if your marriage was tumultuous, stressful or even abusive, you may have no desire whatsoever to hold on to a reminder of just how tough things were.  

Here are some possible options for what to do with your rings:

  • You can always give the ring back to your spouse.
  • You may save the rings and give them to your children when they decide to get married.
  • You can sell the rings and use the money to make some positive steps like paying off debt, investing in yourself, or buying something special.
  • You can have the ring melted down and used to created a new piece of jewelry.
  • You can sell the rings and donate the money to charity, especially if you were in an abusive relationship.

Even if the rings remind you of a bad marriage, it doesn’t mean you should toss them into the nearest body of water. They’re likely worth some money, so it’s more productive to sell them and use the money for something positive.

If you find your marriage is struggling and you and your spouse have decided to end it, give the attorneys at Harmon and Gorove a call today to discuss how we can help you file an uncontested divorce to end your marriage in an amicable and cost effective way.  

Three Parts of a Basic Estate Plan

Every person, no matter how significant they may feel their assets are, absolutely needs to have a well thought out estate plan that covers three very basic documents that will serve your best interests and make the lives of those you care about that much easier when the time comes. The three main planning instruments you should have include a durable power of attorney, a health care directive, and a last will and testament. These instruments will cover an array of subjects in our lives and our family’s lives after we pass away and should be taken very seriously, regardless of what you believe you may leave behind.

Power of Attorney

 

The first thing you need to include in your estate plan will be a power of attorney. This allows you to designate a person of your choosing to manage your property, assets, and finances during your life in the event you are incapacitated and unable to act in your own interest. A power of attorney carries a lot of weight and gives someone almost complete control of your financial life and should be vested in a trusted individual you can be sure will act solely in your best interest should a time come where you can’t handle these situations yourself.

Healthcare Directive

 

The second thing you should look into is a health care directive. A healthcare directive is essentially a type of a power of attorney that deals only with health care decisions. A healthcare directive allows you to appoint a trusted person to direct your medical care and make important end of life decisions should you be unable to.

 

Last Will and Testament

The third and most essential piece of estate planning is your last will and testament. A last will and testament is the most basic mechanism used to transfer property to family and friends upon our death. There are numerous other ways to pass along our assets and other parts of our estates, including various forms of trusts, a last will and testament is still necessary to direct our loved ones whom we leave behind about our final wishes including whether we wish to be buried, cremated or shot off into space, types of memorial services and other ways in which we want to be remembered.

It is important to understand that these are just the essentials of an estate plan and what you will ultimately need will vary depending on what your leave behind and who you wish to leave it to. Significant assets like large bank and investments accounts, your home or other real estate assets, your business, and other valuables like expensive jewelry or art may need even more extensive estate planning that satisfies everything from family dynamics and business partners to tax and legal considerations.

If you find that your basic estate planning is not where you want it to be, schedule a no pressure, complimentary consultation with one of our attorneys today so we can go over your wishes and create a basic estate plan that will leave you with peace of mind and your family with valuable information about your wants and desires when the unthinkable happens.

2nd Mortgage Lien Stripping in Bankruptcy.

A 2nd mortgage or home equity line of credit (HELOC) can be a very tricky situation when it comes time to file bankruptcy.  Unfortunately, due to the housing collapse and the Great Recession of 2007, many people in this country have multiple mortgages or other types of loans attached to their homes, often a high rates of interest.  Despite what people may think, 2nd mortgages and HELOCs CAN be stripped and removed through the 2nd Mortgage Lien Stripping process in a bankruptcy if you have the right circumstances.   

Here’s how they’re treated by the bankruptcy court

A HELOC in Chapter 13 bankruptcy:

Chapter 13 bankruptcies require debtors to make payments to the holder of their primary mortgage holder as well as a Chapter 13 Trustee.  The Trustee’s job is to distribute these payments among the creditors who hold priority status. In a Chapter 13, your HELOC debt may ultimately be discharged as the lender will have likely gotten a percentage of the payments you made into your case through the trustee’s office.  

A HELOC in Chapter 7 bankruptcy:

In a Chapter 7 Bankruptcy, you can cancel the debt on your home equity line of credit.  The only problem with this is the fact that you can’t cancel the lien that the creditor has on the house.  As a matter of fact, the HELOC lender could possibly still foreclose on your house after the bankruptcy has concluded.  While it would only benefit them if there was equity in the house, there’s still technically no way to stop them from doing this.  The best way to avoid a foreclosure after a Chapter 7 has concluded is to sign a reaffirmation agreement with your HELOC lender during the bankruptcy.

Second mortgages in Chapter 13:

2nd Mortgage Lien Stripping is possible when a second mortgage isn’t secured by a home’s value and can potentially be eliminated in a Chapter 13.  Homes that are underwater may have second and third mortgages that aren’t secured by the value of the property anymore due to the fact that the amount of the loans total more than the current value of the property.  One thing to remember though is that discharging a second or third mortgage will have no effect on what you owe on your first mortgage and you will still have to pay that mortgage in full.

If you find yourself facing the reality of foreclosure due to a second or third mortgage on your home and you think that 2nd mortgage lien stripping may be right for you, come see one of our experienced attorneys at Harmon and Gorove today.  Our attorneys have decades of experience handling cases like this and they can advise you if you will benefit from this valuable tool under the bankruptcy code.  

Bankruptcy: How it Affects your Spouse

Marriage means much more than just living with someone, it means sharing a life together and that life includes your finances. Still, sometimes one spouse may need to declare bankruptcy to get out from under their debts, even if husband or wife does not. There are any number of reason why this may be the case.  The filing spouse may have racked up credit card debt as a college student or may have incurred medical expenses that the other spouse isn’t liable for. If you are married, you often can file for bankruptcy without your husband or wife. Even when you file and individual bankruptcy case, it may still have a profound effect on your non filing spouse.

How Bankruptcy can Affect your Spouse:

Generally speaking, if you are filing for an individual bankruptcy case, it will not have much of an effect on your spouse in many cases. One of the areas in which it may have an impact is If you have joint debts discharged in the bankruptcy. By doing this,  the bankruptcy may appear on your spouse’s credit regardless of whether they have filed.

Also, when you file for bankruptcy, it only eliminates your personal debt, but your husband or wife is still obligated to pay back their own debts and any joint debts that they may be on with you. Your creditors can pursue legal action against your spouse to collect your joint debts once you have filed for bankruptcy. While this past statement is true if don’t life in a community property state, if you do live in a community property state and discharge the debts you owe jointly with your spouse, the creditors cannot pursue collections against your marital community property after your bankruptcy. In this case, your spouse benefits from discharge of your joint debts.

Filing for Chapter 13 bankruptcy protection can protect your spouse from creditors with the Co-Debtor stay. A Co-Debtor protects the debtor against almost all types of debt collection activity by virtue of you having filed for protection yourself. A chapter 13 also prohibits creditors from pursuing your co-debtors during the course of your bankruptcy. However, in a chapter 7 bankruptcy, the co-debtor stay is not included. At that point a collector will not be able to collect the debt from you, but it can collect it from your spouse.

Finding Financial Freedom:

Filing for bankruptcy is a last resort for many and a challenging process for everyone, especially if affects your loved ones. Understanding what your options are helps you both make good decisions that can get you back on the road to financial prosperity and security. If you are considering filing bankruptcy, contact our experienced bankruptcy attorneys today so they may explain the different options you have available to you under the law. Harmon and Gorove has helped thousands of families recover from difficult financial situations over the course of the last 35 years.  Contact our office today for a free, no obligation consultation.

Don’t Make and Estate Planning Mistake

In life, it’s easy to make a mistake. Estate planning is one of the most important things you can do in life.  It should be taken very seriously in order to avoid hassles or other delays that can come when you probate your will and begin transferring assets to family and friends.  With the correct planning, most people are able to avoid the costly mistakes that can lead to a prolonged and painful probate battle.

One of the most common estate planning mistakes you can make is adding a friend or young family member’s name to a joint account.  You may think that it will make it easier to transfer assets or even pay final expenses. Often that isn’t true. It can cause confusion about your intentions once you pass and can complicate the probate process.  It could also open you up to potential unscrupulous conduct by those you put on your account. The better alternative would be to give a trusted person a power of attorney to make financial decisions on your behalf in the event that you are unable to.

Another common mistake is not updating beneficiaries.  By having the wrong beneficiaries listed on bank accounts, life insurance policies and retirement accounts you can prevent your assets from being transferred to your intended beneficiaries. Often, individuals will create a single will and never bother with  updating it when major life events happen like having children or grandchildren, divorcing or remarrying or the death of a loved one. If you don’t update your will when these types of things happen your estate could essentially become intestate and you could be setting your heir up for a legal fight or a situation where the state itself decides what happens to your assets.

Out of all the mistakes listed above, the biggest mistake is having no plan at all.  Yes, there are legal mechanisms that will provide for your surviving spouse and your children and grandchildren but the state can’t possibly understand all your wishes and what you wanted may ultimately not happen.  Estate planning is essential to your piece of mind and also to those family members and friends who will survive you. If your estate plan is lacking, contact the caring and competent attorneys at Harmon and Gorove today for a free consultation about what your estate planning options are.  

Savings Rate in America is Scary

The average American family is struggling with savings.  While as much as 70% of people agree that the economy is humming along at a record pace, many people often do not see the real benefit that Wall Street is reaping in their own bank accounts.  Here in the United States, the economy may be doing well but the savings rate reaches has reached a new low.

 

A recent study by the Federal Reserve says that the average American consumer is unable to cover a $400 emergency expense without tapping credit or having to sell some possessions. Many attribute this to the rising cost of living and the recent uptick in consumer debt and student loan debt which are both having a negative effect on the savings rate.  Student loan debt in America now tops 1.4 Trillion dollars and is causing many people to not be able to purchase homes and cars and is even blamed for delaying marriages and keeping people from starting families.

 

Another disturbing trend in the savings rate in America is the fact that more than 50% of people have less than 1,000 dollars in savings.  Despite the fact that more Americans are feeling confident in the economy, a full 57% of Americans don’t even have 1,000 dollars saved. This is disturbing because many people still expect to retire at or around 65.  The average social security check people receive in retirement is approximately 1,400 per month.  While that will continue to increase as time goes on, it is a sobering thought that many people who are late to get into the savings game may have to finance their retirement on just under 17,000 dollars per year.  


As we stated earlier, most people are feeling more financially secure but they are failing to save.  You can make that savings easier if you contribute to employer funded or matched retirement plans which save your money for you, keeping you from ever getting your hands on it.  If you work for an employer that does this, we highly recommend you using this. If you are having to save on your own and you keep finding it harder and harder to put money away you may be a good candidate for bankruptcy.  Bankruptcy can be a positive thing for your finances and it can help you eliminate may of the unnecessary debts that are holding you back from creating a savings plan. If you are struggling with creating a savings plan, give us a call.  The attorneys at Harmon and Gorove have decades of experience helping people out of debt and making meaningful financial changes in their lives.