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Common Misconceptions about Divorce in Arizona Divorce & Bankruptcy: Which Comes First?

We all have our own ideas about divorce. When it comes to the legal aspects of divorce, most people have significant misunderstandings. The legal process to divorce in Arizona is straightforward, but cases that go before a judge can become really complicated. If you are considering a divorce, it’s very important to realistically understand the legal process and consequences. Here is a list of common misconceptions about divorce most Arizonians have:

Does Filing a Court Petition Equal a Divorce?

When you file for a divorce in a court, you are required to file a petition. Some people believe this petition to be equal to a legal divorce. It is not. You are legally divorced when a judge says so and issues a ruling which recognizes the formal Date of Separation. From that day on, your civil status will be officially divorced and single, but not a day before. This date is very important because your income and property ownership (that you retain after the proceedings) only become non-marital property after this date is set by the court.

Can Child Custody be Arranged According to a Prenup?

This is an absolutely inaccurate idea. Prenups can set provisions for things like asset division in a divorce. However, child custody is solely up to a family court to decide. Child custody is largely a matter of public policy that ensures the well-being of a child. That requires judicial assessment of a child’s current living situation. Therefore, having provisions for child custody is highly improper in a prenup agreement. It could possibly render the whole agreement void. To make sure your prenup agreement has no chance of being voided by a court, consult with a divorce attorney in Scottsdale.

Can A Spouse be Ordered to Pay My Attorney’s Fees?

In Arizona, the laws allow for a divorce court to order one spouse to pay the legal fees of the other in whole or part. However, this is very much subject to a judge’s independent review. The aim of these laws is to eliminate any income disparity between the spouses from hindering access to similar legal representation (going to court on “a level playing field” so to speak). However, the judge will see how “reasonable” both parties are. In other words, your spouse will be ordered to pay your legal fees if only the request is evaluated as reasonable and that your positions are in fact reasonable as presented in court.

Is Alimony is Forever in Arizona?

Courts in Arizona typically set alimony for a specific period of time, such as until a child comes of age. The purpose of alimony is to provisionally support a spouse in need. But alimony is not financial life support. If the receiving spouse dies, remarries or cohabits with another, then alimony can be terminated.   Generally speaking, the longer the duration of the underlying marriage, the longer the potential duration of payout on spousal maintenance.

Creditors will Only Go After the Spouse for Debts He or She Agrees to Pay Off

Arizona is a “community property” state. That means that any debts incurred during a marriage become the presumptive responsibility of both spouses. The actual person who signed the loan agreement may not always matter. This status applies even after a divorce. Your spouse could agree to pay off a credit card loan or the home equity line of credit in the divorce agreement, but you won’t be completely off the hook. If the spouse fails to pay, the third party creditors could come after you. Any agreement in a divorce is between you and the spouse, not the creditor.

Filing Together: A Joint Petition

A bankruptcy case starts when an individual, a married couple, or a business files official bankruptcy paperwork to the court. A married couple filing together will submit a “joint petition” containing the financial information of both spouses in one set of documents.

Divorcing couples often file together because it can be more efficient. For example, filing a joint petition comes with the following benefits:

the bankruptcy will wipe out (discharge) the qualifying debt of both spouses, thereby reducing the issues to be decided in divorce court, and it costs less to file bankruptcy together as opposed to apart.

Married couples are not obligated to file together, however. If one spouse needs bankruptcy protection immediately, an individual filing might make sense. Or each spouse might find it easier to qualify for bankruptcy after the divorce due to a mutual drop in income. But when it’s feasible, many couples find that filing together streamlines the divorce process.

Bankruptcy and Divorce Costs

Bankruptcy filing fees are the same for joint and individual filings. So filing a joint bankruptcy with your spouse before a divorce can save you a lot of legal fees. Also, if you decide to hire a bankruptcy attorney, your attorney fees will likely be much lower for a joint bankruptcy than if each of you filed separately. However, you should let your bankruptcy attorney know about your upcoming divorce as there may be a conflict of interest for him or her to represent you both.

Filing for bankruptcy before a divorce can also simplify the issues regarding debt and property division and lower your divorce costs as a result.

Chapter 7  vs. Chapter 13 Bankruptcy

Chapter 7 bankruptcy is a liquidation bankruptcy designed to get rid of your unsecured debts such as credit card debt and medical bills. In Chapter 7 bankruptcy, you usually receive a discharge after only a few months. So it can be completed quickly before a divorce.

By contrast, a Chapter 13 bankruptcy lasts three to five years because you have to pay back some or all of your debts through a repayment plan. So if you were looking to file a Chapter 13 bankruptcy, it might be a better idea to file individually after the divorce because it takes a long time to complete.

Property Division

Wiping out your debts jointly through bankruptcy will simplify the property division process in a divorce. However, before filing a joint bankruptcy, you must make sure that your state allows you enough exemptions to protect all property you own between you and your spouse. Certain states allow you to double the exemption amounts if you file jointly. So if you own a lot of property, it may be a better idea to file a joint bankruptcy if you can double your exemptions.

If you can’t double your exemptions and you have more property than you can exempt in a joint bankruptcy, it may be more advantageous to file individually after the property has been divided in the divorce. Also, keep in mind that if you file bankruptcy during an ongoing divorce the automatic stay will put a hold on the property division process until the bankruptcy is completed.

Discharging Marital Debt

Litigating which debts should be assigned to each spouse in a divorce can be a costly and time-consuming process. Further, ordering one spouse to pay a certain debt in a divorce decree does not change the other spouse’s obligations toward that creditor.

For example, let’s say your ex-husband was ordered in the divorce to pay a joint credit card you had together. If he doesn’t pay it or files bankruptcy, then you are still on the hook for the debt, and the creditor can come after you to collect it. If you end up paying the debt, you have a right to be reimbursed by your ex-husband because he violated the divorce decree. This holds true even if he filed bankruptcy because he can discharge his obligation to pay the creditor but he cannot discharge his obligations to you under the divorce decree.

However, trying to collect from your ex will usually mean spending more money to pursue him in court. As a result, it may be in both spouses’ best interest to file bankruptcy and wipe out their combined debts before a divorce.

Income Qualification for Chapter 7 Bankruptcy

If you intend to file a Chapter 7, the decision to file before or after a divorce can come down to income if you maintain a single household. If you wish to file jointly, you must include your combined income in the bankruptcy. If your joint income is too high and you don’t pass the Chapter 7 means test, you might not be able to qualify for a Chapter 7.

This can happen even if each spouse’s income individually is low enough to qualify on his or her own. This is because Chapter 7 income limits are based on household size and the limit for a household of two is not twice that of a single person household (it’s usually only slightly higher). In that case, it may be necessary to wait until each spouse has a separate household after the divorce to file bankruptcy.

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Judgment of Divorce

Married couples always start off with the best intentions and try to make things work during a marriage. Unfortunately, not all marriages are meant to be. When it comes to divorce, it’s also great if a couple can resolve any issues they have informally. But if you and your soon-to-be ex can’t come to an agreement on your own, you might have to go to court to determine who gets what, from the kids to the coffee table.

Here is a quick overview of what you can expect in family court and the final judgment of divorce.

What is a Final Judgment in Divorce Proceedings?

The final judgment in a divorce proceeding is the final ruling that ends the marriage between a married couple. These judgments are rendered by the judge or jury. Once the court reaches this decision, the divorce is granted and finalized. In order to get a final judgment in a divorce, a married couple must go through the family court process.

Family Court and Final Judgment: The Basics

The vast majority of divorce cases reach some sort of settlement, whether through informal negotiation between the spouses (and their attorneys) or through more structured proceedings such as mediation or collaborative law.

But, in some divorce cases, no full settlement can be reached. This is usually because the spouses are too far apart in some or all of their respective wishes. They may not agree on a equitable solution for issues such as child custody, child support, and property division.

In these situations, the divorce will be handled in civil or “family” court, at the county/district branch of state court where the divorce petition was filed. A single judge usually presides over the case and issues a final judgment of divorce, although one or both spouses may have the right to request a jury trial.

The Court Process: Evidence and Arguments

In family court, attorneys for each spouse present evidence and arguments related to the divorce on issues like child custody and visitation, child and spousal support, and property division. Evidence in a divorce trial can come in the form of:

  • Testimony from the spouses;
  • Witness testimony — including a guardian ad litem, a neutral third party who advocates for and represents the child(ren) in court, and expert witnesses (financial analysts, property valuation experts, etc.); and
  • Documents — including records related to marital property and finances.

As each side presents its own evidence and arguments, the other side has an opportunity to question witnesses and challenge evidence through “cross-examination” — challenging the witness’s story, testing their credibility, disputing documents, and otherwise attempting to discredit or discount witnesses and evidence.

The Court Process: Final Judgment of Divorce

After hearing and examining all evidence, the judge (or jury) will issue a final ruling resolving the divorce and all surrounding issues. Once the judge reaches a decision, they grant the divorce and enter a judgment finalizing the divorce and all related issues.

This judgment dictates a number of things about the now-divorced couple’s rights and obligations, including:

  • Division of the couple’s marital property, debts, and resolution of other financial matters;
  • Child custody, living arrangements, and a visitation schedule; and
  • Child support and spousal support (alimony): who pays, who receives, how much, when, etc.

Once a judgment is entered, either or both spouses can appeal a trial court judge’s decision to a higher (“appellate” or “appeals”) court, although it is unusual for an appeals court to overturn a judge or jury’s decision in a divorce case.

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What Is Divorce Good For

Most people who are thinking about getting a divorce are aware of what to expect. They have seen divorces in the movies and frequently have at least a few personal acquaintances who have gone through divorce. Even with this “second-hand” knowledge, going through your own divorce is one of the scariest things you can do in life.

You may be facing the end of one of your most important relationships ever, and on top of that, you have to start planning for unpleasant things like the division of assets and finding new housing. In many situations, there is also the sad possibility of losing daily contact with your children.

Divorce and predictability don’t mix. But if you go into your divorce with reasonable expectations, you’ll have the best chance of being happy with the outcome. As a result, it’s a good idea to be aware of what a divorce can and cannot achieve for you. What therefore is there to gain from divorce?

Real Estate Division

The marital property will be divided by the divorce court in the most reasonable manner. Most states will not include any property acquired before the marriage, by gift, or through inheritance in this divide.

This entails a 50/50 split of the property obtained by the partners during the marriage in some states (community property states). Other states (those without a community property system) will try to divide the property fairly by looking into the couple’s individual financial situations, the length of the marriage, the standard of living during that time, and other pertinent factors.

It is advisable to discuss the split of property with your soon-to-be ex-spouse because it is never predictable. Having legal representation will aid in the negotiation and settlement processes as well. For instance, you might decide that, while genuinely wanting to stay in the family home, you must continue running your business. As a result, you might decide to prioritize the business over the home. You can try to reach a mutually agreeable property division arrangement with your spouse in this way.

Assistance Obligations

The outcome of a divorce case can influence a couple’s support obligations. This may take the shape of spousal support and child support (also called “alimony”).

Although there may be some case-by-case variations, state law currently mainly determines how much child support must be paid. Slowly but surely, several states are working to enact laws that restrict deviance from the norm. Ordered custody arrangements may affect child support orders. In general, spousal support is heavily influenced by the specifics of each divorce and the financial situation of the separating couple. Therefore, it is once again challenging to anticipate a court’s final support decision.

Visitation and Custody of Children

When there are children between the parties, divorce can also help determine child custody, timesharing arrangements, and parenting schedules in addition to the division of assets. This is also everything but expected. The “best interests” of the child are supposedly promoted by a collection of considerations that courts frequently attempt to consider when making decisions, however these factors might differ from case to case and court to court.

Furthermore, during tense custody disputes, courts typically hear and see only the worst in people. In light of their constrained “view” of the parents’ lives, a divorce court might not necessarily decide on custody in the “optimal” way. Again, in this situation, bargaining and settlement are key choices to consider. A cooperative child custody arrangement will be advantageous to all parties engaged in the divorce, especially the kids.

Ensure Accurate and Equal Division

An exact or mathematically equal distribution of property and parenting time cannot be achieved through divorce. Since no two individuals, marriages, or divorces are alike. The judge who issues a divorce decree must choose wisely given the time and information at hand. You may need to make some concessions on some of your desires, and the choice may not always be the most just one that could have been made.

Divorce courts frequently need to make the most of bad situations. For instance, when one parent resides in Cheyenne, Wyoming, and the other in Kalamazoo, Michigan, a satisfactory custody agreement is impossible.

Maintain Good Relations

Even while a court can determine the terms of child custody and visitation, the judge will not always be present when it is time for one parent to pick up the children or send them to spend the weekend with the other parent. The court will not be present to watch that they don’t insult the other parent in front of the kids. A court order is ultimately simply a piece of paper. To carry out the provisions of the custody and visitation order, the parents must continue communicate with each other civilly.

Your obligation to your children does not end with your divorce. In the best interests of the kids, this duty also entails courteous communication with the other parent. When there is significant conflict between the parents, most courts will take whatever action they can, such as limiting in-person interactions wherever possible. Examples of this include arranging for parents to pick up or drop off children at school or church so that they won’t have to interact with one another, or if a facility is available to handle exchanges when domestic violence is present.

Keep Your Current Standard of Living

You should also be aware that a divorce court cannot raise your pay in order to stop a decline in your standard of living after a divorce. Unfortunately, maintaining two separate residences is simply more expensive than living together and splitting costs with another person. Your level of life will alter after a divorce, and the court can do very little, if anything, to prevent this.

Fix Emotional Problems

Finally, a court will not be able to hold your ex-spouse accountable or ethically defend you for all the wrongdoings that took place during your marriage. Additionally, the divorce procedure won’t make your emotional wounds better or even eliminate the need for you to grieve the broken relationship. Although you can get help from therapists and support groups, that is your responsibility.

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Does Divorce Impact Social Security Benefits?

Credit and Divorce

You’ll want to pay attention to how divorce and remarriage affect your Social Security, just as you would with marriage. For example, a name change must be recorded to the Social Security Administration (SSA) in order for your earnings to be accurately reported, and remarriage affects survivor benefits.

Essentially, if you have been married for at least 10 years, you will likely continue to get Social Security benefits. If your marriage lasted fewer than ten years, you would not be eligible for your ex-benefits. spouse’s Remarriage and other variables can affect your benefits.

During a divorce, it is not overly complicated, but you must understand your rights and take care of these matters immediately.

How long must a couple be married before receiving benefits?

To be eligible for spousal benefits, you must have been married for at least 10 years.

How much Social Security does a divorced spouse receive?

This is crucial information for your divorce financial planning. To comprehend your spouse’s or ex-retirement spouse’s funds, you must obtain their Social Security benefits statement. This is particularly significant if you lack your own earnings or employment history.

When you reach the full retirement age, you will get full or unreduced benefits as well as fifty percent of your retirement savings account. Typically, if you have your own benefits, you will receive them first. If your spouse receives a bigger benefit than you do, you will also receive funds from their record.

The current full retirement age is 66, but it will shortly increase to 67. You can apply for Social Security payments at the age of 62, but the amount you get will be decreased. You may be eligible for delayed retirement credits if you or your spouse prolong your retirement age. These raise your monthly benefit amount.

Can You Continue Receiving Social Security Benefits After Divorce?

You can only get Social Security benefits after a divorce if:

  • You were wed for a decade.
  • You have not married again*
  • Your ex-spouse is qualified for Social Security and disability benefits.
  • Your personal retirement benefits are lower than those of your ex-spouse.
  • You are age 66 or older
  • You have been divorced for a minimum of two years.
  • Generally, remarriage will nullify your former spouse’s benefits.

How Are Social Security Benefits Divided Upon Divorce?

Social Security can be split in a variety of ways. Still, it is common for each spouse to get fifty percent of the retirement account. You may be subject to Social Security regulations, or you may be eligible for a greater payment or additional benefits. Divorcees must consult with an attorney to guarantee that each party receives what is due.

A delayed retirement can affect the timing and amount of benefits received. Overall, delaying retirement is preferable to retiring early, so your benefits will not be lowered.

Can You Collect Social Security If Your Ex-Spouse Has Died?

Yes, you will receive the full amount of their retirement benefit if your ex-spouse dies. At age 62 or beyond, you will begin receiving Social Security. Delaying your Social Security payments until age 65 or 67 ensures you receive the entire amount (retiring before age 67 can result in a reduction of 0 to 15% in benefits till age 67).

How Divorce Affects Benefits for Survivors

If your divorced spouse dies, you are eligible for widow/widower payments if your marriage lasted at least 10 years. However, you will not be required to meet the length-of-marriage criteria if you are caring for your deceased ex-minor spouse’s or disabled child. Benefits paid to a 60-year-old or older surviving divorced spouse do not influence the benefit rates of other survivors receiving benefits.

Keep in mind that the SSA will not notify your ex-relatives spouse’s if you apply for survivor benefits. In addition, there is no limit on the number of individuals who may claim for benefits from a single Social Security account.

How Remarriage Affects Benefits for Survivors

In general, if you remarry before the age of 60, you are ineligible for survivors payments until the second marriage ends by death, divorce, or annulment. You can continue to claim benefits on your former spouse’s record if you remarry after age 60 (50 if disabled).

At age 66 or older, you are eligible to receive retirement benefits based on your new or current spouse’s record if it is greater. Your remarriage would not affect the amount of child support given to your children.

Name Modification on Your Social Security Card

If you change your name, you must inform both the Social Security Administration and your employer. This will ensure that your earnings are reported and documented accurately by your company.

You can obtain a new Social Security card bearing your new name. You must produce a copy of your birth certificate, adoption decree, or other appropriate documentation to confirm your date of birth. To establish your identity, you’ll need a valid U.S. driver’s license, state identification card, or passport.

Are You Afraid of Divorce, Remarriage, and Social Security? Consult a Lawyer

Social Security-related information is available at SSA.gov. A divorce can effect many aspects of one’s life, even after death. It is essential to comprehend the legal ramifications of a divorce, from retirement benefits to name changes on Social Security cards.

Put your mind at ease by allowing an expert divorce attorney in your state to assist you in making the right decisions regarding divorce, remarriage, and Social Security.

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Military Divorce

While military divorces are not more complicated than civilian divorces, there are particular divorce procedures and requirements that apply to U.S. service members and their spouses. These differences may pertain to support payment compliance, service of process, residency or filing requirements, or the distribution of military pensions. The following is an outline of the laws that govern the divorce of U.S. servicemen and women.

Military Marriage Statutes

Both state and federal laws govern military divorce. For instance, federal rules may govern where divorcing spouses end up in court or how military pensions are shared, whereas state laws may govern the issuance of alimony and spousal support. The exact state laws applicable to a divorce depend on the state in which the divorce is filed.

Jurisdiction

Before a court may award military members or their wives a divorce, it must have “jurisdiction,” or the authority to hear the case. Generally, a person’s place of residence determines the court’s jurisdiction over them. However, for military personnel, jurisdiction may be the place where the person holds legal residence, even if the service member is stationed somewhere else.

Residency, Filing Requirements, and Proceedings Stays

Numerous states have decreased or removed the residency requirement in military divorces, allowing service personnel or their wives to petition for divorce in the state where they are stationed, even if they are not legal citizens.

In general, military members and their wives can petition for divorce in one of three states:

  • The state of residence of the filing spouse
  • State in which the service man is stationed.
  • The state in which a service member asserts legal residency

The reasons for divorce, including property division, child custody, and child support, are defined by the state where the divorce is filed. As a result, the specific conditions of a divorce will change based on that particular state’s laws.

It is important to note that active-duty service members have certain protections against court proceedings. Under the Servicemembers Civil Relief Act (SCRA), for instance, service members are protected from default judgment and can apply for a “stay” — a temporary halt — of any civil action, including child custody proceedings, initiated against them during active duty or within 90 days of their release from active duty.

This stay is in place so that service members can devote their time and attention to defending the nation while still being subject to court orders or verdicts while they are unable to appear in court. If a servicemember desires a delay that continues beyond 90 days, he or she may petition the court to grant it, but the court has the discretion to grant or deny any additional extensions.

Pensions and Military Benefits

Like civilian retirement benefits, military pensions are subject to distribution between spouses in the case of divorce. Depending on the jurisdiction, the Uniformed Services Former Spouses’ Protection Act (USFSPA) permits state courts to recognize military retirement money as either sole or communal property. While the USFSPA does not specify a method for distributing retired pay, the amount is often established and distributed in accordance with state regulations.

In addition, the Defense Finance and Accounting Service (DFAS) pays the former spouse’s portion of military retirement immediately if there were at least 10 years of marriage and 10 years of military service overlap (known as the 10/10 rule).

However, regardless of the length of the marriage, a court may sanction an offset payment to a military spouse who has been married for less than 10 years. In such a case, payment would come from the retiring spouse, not DFAS.

In addition to pension benefits, spouses of former military personnel are eligible for full medical, commissary, and exchange privileges following a military divorce if they meet the following criteria:

  • The couple was married for 20 years or more
  • At least 20 years of service are credited toward the service member’s retirement compensation.
  • There was at least a 15 year overlap between marriage and military duty

Matrimony and Child Support

There are particular restrictions regarding spousal maintenance (alimony) and child support in the military. The purpose of these regulations is to ensure that a service member’s family support obligations continue after a divorce or separation.

A court may enforce spousal and child support obligations in a number of ways, including by:

  • Court-order
  • Garnishment
  • Willful or Unwilling Allotment
  • A court may also mandate the paying spouse to retain life insurance to cover child or spousal support payments for a predetermined amount of time.

Consult a Lawyer Regarding Your Military Divorce

Because a military divorce needs understanding of laws that do not apply to civilian divorces, it is prudent to consult with a divorce attorney who has experience handling military divorce matters. An expert, local divorce attorney can assist you understand the many laws that may apply to your situation, your rights as member of the armed forces, and more.

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Divorce And Business Ownership

Eric and Ariel reached the terrible choice to divorce after 19 years of marriage. Ariel’s profession of collecting and selling various collectibles began before their marriage. However, now that she is getting a divorce, she is concerned about the future of her business. Will it be divided between her and Eric, or does she retain sole ownership as she owned it before to their marriage? Well, it depends.

A business will be evaluated as an asset in the case of a divorce. Whether it will be shared depends, among other things, on state rules, whether the business is considered marital property, and whether a prenuptial agreement is in existence. Learn more about divorce and company ownership by reading on.

Define Conjugal Property

The key determinant of whether an enterprise is subject to property division is whether it is classified as marital or separate property. The term “marital property” refers to the joint property of a married couple, which is more complicated than it may appear.

First, state rules influence the definition of marital property, which is typically community property or property susceptible to equitable division. Second, how the property is handled and even what happens to it throughout a marriage might influence how it is finally classified.

Community Property versus Equitable Distribution in Business Ownership upon Divorce

A divorcing couple must first establish whether they reside in a community property state or an equitable distribution jurisdiction. In states with community property, practically all property acquired during a marriage is considered joint property, while property owned prior to the marriage is considered separate. Obviously, the law is seldom straightforward, thus exceptions exist. Gifts and inheritances received by one spouse during a marriage are regarded separate property; however, combining them with communal property can alter their status.

In states with equitable distribution, the partition of property is less easy because a judge decides how it should be shared. Obviously, state laws establish specific standards about how property should be split. Additionally, the concept of equitable distribution is that property is divided “fairly” but not necessarily evenly.

When Is a Business Marital Property In the Context of Divorce?

The business will be considered marital property if the couples are co-owners. However, this is not the only method in which a business might be considered marital property. If a business was established after the marriage, it is likely to be regarded marital property.

Sometimes, businesses created by one spouse prior to marriage are not considered marital property. However, this is not always the case. For instance, if the non-owner spouse made contributions to the firm throughout the marriage, it may still be considered marital property. It is vital to remember that “contributed” can refer not just to direct contributions of time to the business, but also to caring for the home while the business owner ran the company.

Using a prenuptial agreement to safeguard business ownership

A prenuptial agreement is the greatest approach to ensure that a business is not subject to property division in the event of a divorce. Occasionally, a spouse may start a business after the wedding, in which case it would be impossible to include it in a prenuptial agreement. However, it is possible to obtain a postnuptial agreement to define business ownership, which is similar to a prenuptial agreement except that it is executed after the couple is married.

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Credit and Divorce

Credit and Divorce

If you have just gone through a divorce or are planning one, you may want to examine credit and divorce concerns attentively to prevent the predicament described above. In addition, understanding the various types of credit accounts acquired during a marriage can provide light on the potential advantages and disadvantages of each.

Does Divorce Affect Credit Scores? Your credit score may decline.

Divorce does not influence your credit score by itself. Unless you take the necessary safeguards, the divorce process, which sometimes involves joint credit accounts, may negatively impact your credit.

The divorce order defines who is liable for accounts opened during the marriage. This judgment does not, however, bind the lenders. This means that you may still be liable for an account bearing your name.

Types of Credit Accounts and Financial Obligation

There are two different sorts of credit accounts: individual and joint. You can also allow approved others to use your account when applying for credit.

Personal Accounts

The creditor takes your income, assets, and credit history into consideration. Regardless of your marital status, you are solely responsible for paying off the debt in your individual account. The account will appear on your credit report, as well as that of any “approved” users.

Nonetheless, if you reside in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may be reflected on the credit report of the other.

Advantages/Disadvantages

If you are not employed outside the home, work part-time, or have a low-paying job, having an individual account could be detrimental. Because it may be difficult to provide a solid financial picture without your spouse’s salary.

Alternatively, if you start an account in your own name and are responsible, no one else’s actions (or nonpayment) can negatively impact your credit rating.

Shared Accounts

Considerations for a joint account include the income, financial assets, and credit history of both account holders. In a joint account, you and your spouse are jointly accountable for paying debts, regardless of who pays the bills. A creditor who reports the credit history of a joint account must include both parties’ names (if the account was opened after June 1, 1977).

Advantages/Disadvantages

A creditor accepting a loan or credit card may consider the combined financial resources of two applicants as evidence of their creditworthiness.

However, because two people jointly applied for the credit, both are liable for the debt. This is true even if a divorce ruling assigns each spouse distinct debt liabilities. On jointly-held accounts, ex-spouses who run up expenses and don’t pay them can harm their ex-partners’ credit histories.

Account titled “Users”

If you create a personal account, you can grant access to another individual. If you list your spouse as an authorized user, a creditor who reports your credit history to a credit bureau must also include your spouse’s name (if the account was opened after June 1, 1977). A creditor is also permitted to report the credit history of any other authorized user.

Advantages/Disadvantages

Frequently, user accounts are created for convenience. Students and housewives, who may not qualify for credit on their own, benefit from these loans. These individuals may use the account, but they are not contractually obligated to pay the bill.

What Happens to Your Credit If You Divorce?

If you are contemplating divorce or separation, pay close attention to the status of your credit accounts and the relationship between credit and divorce. If you keep joint accounts during this time, it is imperative that you make regular payments to protect your credit rating. As long as a joint account has an outstanding amount, you and your spouse are accountable for it.

Will a divorce save assets from creditors?

As noted previously, a judge’s divorce judgment does not apply to creditors. This means that creditors may pursue you for any missed payments or unpaid credit card balances. Additionally, they will submit your credit history to a credit bureau.

Should Debt and Credit Cards Be Paid Off Prior to Divorce?

Yes! If at all possible, it is preferable to pay off or decrease as much of your joint debt as possible prior to or as part of the divorce process. If that is not practicable, stop making new purchases with shared credit cards.

Preventing an Ex-Spouse From Ruining Their Credit During or After a Divorce

Divorce by itself can be quite hard. However, it is essential to consider the financial ramifications, especially in terms of credit scores. The following recommendations can assist you in maintaining good credit as you go in life.

Early closure of joint accounts

You might want to close any joint accounts or accounts where your ex-spouse was an authorized user. You might also ask the creditor to convert these accounts to individual accounts.

A creditor cannot automatically liquidate a joint account due to a change in marital status, but may do so at the request of one of the divorcing spouses. However, creditors are not required to convert joint accounts into individual accounts.

Instead, they may force you to reapply for credit individually and, based on your new application, grant or deny credit. To remove a spouse from an obligation on a mortgage, vehicle loan, or home equity loan, a lender will usually need refinancing.

2. Obtain Your Credit Score Through a Credit Reporting Agency

There is no better time to obtain a free annual credit report than when you are going through a divorce or have concerns about an ex-debt spouse’s repayment. Determine your debts, what has been reported, and whether your ex-spouse is behind on payments for joint accounts.

If you reside in a community property state, you must be aware of all of your ex-obligations spouse’s accrued during the marriage, even if your name was never on the loan or credit application. Any debt created during the marriage is regarded as jointly incurred by both parties.

3. Separate and Transfer Credit Card Obligation

Instead of simply announcing that one spouse will be responsible for paying off the credit card debt, actually divide the debt on shared credit cards and transfer it to the responsible spouse. Then, cancel the joint cards without delay.

4. Include a clause on indemnification in your divorce agreement

Consider inserting an indemnification language in your divorce agreement if just one spouse is to be accountable for a jointly-owned debt. This section specifies which spouse is responsible for the debt and makes it abundantly apparent that the other spouse is not liable.

You can sue your spouse if they refuse to pay a debt stated under their name in the indemnification agreement.

Obtain Expert Legal Assistance With Your Credit and Divorce Concerns

Your credit score is an essential component of your financial well-being. If you’re considering divorce, you’ll need to know who will be responsible for the majority of the debt after the marriage and how this could affect your credit history. However, you are not required to answer these questions on your own. A local divorce attorney will be able to alleviate your anxiety.

Divorce & Legal Separation, Divorce Attorney, Divorced Parents, Scottsdale Attorneys, Scottsdale Divorce
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What Is a Controlled Substance?

What Is a Controlled Substance?

When the federal government decides to apply regulations to particular drugs and associated materials they are known under the term “controlled substance.” Some of these substances are perfectly legal to have in your possession if certain criteria are met – for example if they are for medicinal or scientific purposes. It becomes illegal when there is no applicable legal justification, or its use can not be legitimized.

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Defining Controlled Substances

The federal government has divided drugs into what it refers to as “schedules” There are five of them – from the most harmful and lethal drugs in Schedule I to the least harmful in Schedule V in that is known as the Controlled Substances Act. The majority of states have chosen to follow this scheme. See: 21 U.S.C. §§ 801 and following for further details.

Defining Illegal Possession Of A Controlled Substance

When an individual has possession of controlled substance or a drug without the authorization or justifiably legal reason for doing so they can be said to be in illegal possession of a substance that is controlled. Frequently this often applies to people who are found to be in possession of drugs such as methamphetamine, cocaine, marijuana, or other various narcotics. For someone to be convicted of this, the prosecutor has to prove the defendant knowingly had possession of the controlled substance.

The Knowing Difference

A person must intentionally or knowingly retain control or possession of a drug for the possessing of a controlled substance to be considered a crime. It may be on their body, in a pocket or they may have control as to the whereabouts of the drug, for example, in a bag, a hiding place or one of the compartments of a car. The defendant may face a conviction for possession when the prosecutor establishes proof the defendant had at least some control over the drug. Just because two people who live together in the same residence, does not equal both as being in possession – the person responsible for control has to be established if the other person did not have control over the drug or substance.

Distribution and Sales

It is possible a person who is facing possession charges may also face up with and a charge of “intent to distribute.” This is far more serious situation. The charge is usually based on the quantity of drugs that have been discovered – usually when it exceeds what may be considered reasonable for personal use. Other evidence may be obtained as well to back up this accusation such as materials used for packaging, lists of clients and a large amount of cash.

Drugs And Vehicles

Many cases of possession come from police pulling over people for traffic stops. It is not uncommon for police to suspect and indeed, locate drugs in a car and the driver is then facing a charge of possession. This is especially the case when the driver or passengers are discovered to have drugs on their person. However, the emphasis is on the prosecutor to establish the driver and/or passengers had knowledge of the drugs in the vehicle. It is also frequently the case more than one individual had possession of the drugs and/or controlled substances.

Penalties

The penalties for possession of drugs and/or controlled substances can vary enormously from state to state or if the charges are federal charges or not. Many factors go into consideration but let’s look in general terms at some of the possible consequences:

  • Fines are very often levied with drug or controlled substance convictions and can vary from less than $100 to more than $100,000 depending on the severity of the situation.
  • Time in jail and prison sentences may also result following a conviction. Again, this can range from just a few days to sentences of greater than ten years.
  • Probational sentences are often consequences in accompaniment to the above and may include rehabilitation treatment as a condition. More than likely the convicted individual will have regular meetings with a probation officer and will have to agree to certain codes and conducts of behavior. It is within the power of a court to revoke an order of probation should the convicted person not meet the terms of their probationary agreement. In such cases, the convicted individual us usually returned to jail or prison for the outstanding duration of their sentence.
  • Diversion programs share some commonality with probation programs but are utilized normally for those who are offenders for the first time. In these programs, the prosecutor permits the offender to take part in a program of behavior modification as well as counseling, often over an extended period of time. Once this has been successfully completed, the prosecutor will consent to drop the charges. Should the offending not complete the terms of the diversion agreement, the prosecutor will then pursue the case against the offender.
  • A drug offender in many states may be offered the opportunity to partake in a rehabilitation course or a program of drug treatment as opposed to a custodial sentence. This may also be a condition when the person is on probation.

Controlled Substance Schedules: Which Drugs Can I Legally Possess?

The Controlled Substances Act (CSA) of 1970 assigned controlled substances into five categories. While new substances have been added to the list, the categories (or schedules) remain the same. The list is updated annually, so check to see the most updated schedules.

 

  • Schedule I substances are said to have a high potential for abuse, no currently accepted medical use, and lack an acceptable level of safety for use under medical supervision. This category includes hallucinogens, cannabinoids, heroin, LSD, marijuana, peyote, and ecstasy. Regardless of classification, some of these drugs are used for medical treatment (medical marijuana and opiates). LSD is the subject of legitimate medical research. Peyote has been used by some indigenous peoples of the Americas for millennia, and its use in religious ceremonies is federally protected. However, that protection does not exist under state law in many states.
  • Schedule II substances are said to have a high potential for abuse and usage can lead to severe psychological or physical dependence. These substances do have a currently accepted medical use in the United States. Examples include Dilaudid, hydrocodone, Demerol, OxyContin, Percocet, morphine, fentanyl, and codeine.
  • Schedule III substances stimulate the central nervous system but have less potential for abuse. Their use can still lead to moderate or low physical dependence and high psychological dependence. These drugs include amphetamine and methamphetamine, Tylenol with codeine, ketamine, and anabolic steroids.
  • Schedule IV: These substances have a lower potential for abuse than Schedule III drugs. In practice, Schedule III and IV drugs are treated similarly. They can only be obtained by prescription. Schedule IV drugs include Xanax, Soma, Klonopin, Valium, Ativan, Versed, Restoril, and Halcion.
  • Schedule V: These contain limited quantities of narcotics such as cough syrups with codeine. Some of these substances are legally available without a prescription.

Is it Illegal to Possess Scheduled Drugs?

Technically, it is illegal to possess any of the drugs listed on the schedules. There could be a defense, however, if a medical professional prescribed the drug and it was lawfully purchased.

Speak With An Attorney

When you face a possession charge of a drug or controlled substance, an experienced criminal defense lawyer can be of great benefit. They can examine your situation, ensure the proper protocols and procedures were followed by police and can advise you on how best to exercise your rights as well as explaining the possible outcomes of your charges. It many have a great impact on your life and impact your ability to obtain a job, housing or licensing required for your profession.

Source: Theoharis, Mark. “Possession of a Controlled Substance: Drug Possession Laws.” Www.criminaldefenselawyer.com, Nolo, 28 Jan. 2020, www.criminaldefenselawyer.com/crime-penalties/federal/Possession-Controlled-Substance.htm.

Need A Criminal Defense Lawyer In Scottsdale or Phoenix?

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Canterbury Law Group’s criminal defense lawyers in Phoenix and Scottsdale will defend your case with personal attention and always have you and your best interests in mind when offering legal solutions. Call today for an initial consultation! We handle criminal defense cases in all areas of Phoenix including Mesa, Tempe, Chandler, Maryville, Apache Junction, and more.

We are experienced criminal defense attorneys and will fight for you to obtain the best possible outcome. Our firm will rigorously represent you, so you can get on with your life. Call today for an initial consultation! 480-744-7711 or [email protected]

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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10 Things To Do Before You File For Divorce and Realities of the Divorce Process

10 Things To Do Before You File For Divorce and Realities of the Divorce Process

Here are ten actions to take if you believe that your marriage is beyond repair and that divorce is inevitable.

Speak with a lawyer.

Find out what your legal obligations and rights are. Consider the scenario where you decide to relocate to your parents’ home with the kids while you wait for the divorce to be finalized. Moving in with your parents, even for a short time, could be a grave legal error.

Copies of documents.

Make copies of everything you can find by going through household files, including tax returns, bank statements, check registers, investment statements, retirement account statements, employee benefits manuals, life insurance policies, mortgage papers, financial statements, credit card statements, wills, Social Security statements, car titles, etc. It’s crucial to learn as much as you can about the company’s finances if your spouse runs a self-employed business. If you have financial information on your home computer, make copies of it.

List the belongings in the home and in the family.

The major possessions should be listed, including furniture, jewelry, art, appliances, and cars. Don’t forget to search your home’s storage spaces and your safe deposit box for valuables.

(Knowing all of the marital assets is crucial when it comes to dividing the property.)

Understand the household budget and costs.

Write down each monthly expense for utilities, a mortgage, and other living expenses as you go through your check register for the previous year, if you can. Keep track of the money you spend every day so you can figure out your monthly cash outlays as well.

Choose a family debt management strategy.

Determine the family debt, if any, and think about settling it before filing for divorce. One of the most challenging issues to settle during a divorce is how to divide the marital debt. When assessing debt, consider whether any of it was racked up by one spouse or the other before the wedding. The spouse who incurred it would be responsible for paying off this “non-marital debt,” which belongs to them.

Find out the exact salary of your spouse.

If your spouse receives a regular paycheck, it is simple to check a pay stub; however, if your spouse is self-employed, owns a business, or receives any portion of income in cash, you should try to keep track of the money coming in over the course of several months.

Analyze your earning potential in a realistic manner.

Perhaps you have been focusing solely on raising children while you have been out of the workforce for a while. Analyze your current employability and whether pursuing more education before getting divorced would be advantageous for you in the long run.

Look at your credit report.

If you don’t already have credit cards in your name, apply for them right away, use them, and build your credit. If you have a bad credit history, try to pay your creditors now so that you can raise your credit score before the divorce.

Make your own “nest egg” by yourself.

You ought to have access to your own money at all times. You will be responsible for paying bills if your spouse leaves and stops doing so until temporary support orders can be put in place. You will require funds for a retainer if you plan to initiate the divorce. Start putting money aside now, and when you have a sizeable nest egg of your own, consider starting divorce proceedings.

Prioritize spending time with your children.

Keep your kids’ schedules as regular as you can throughout the divorce process. If you and your partner can’t be with the kids together without fighting, schedule separate times for you both to be with them. Participate in your children’s school, sports, and extracurricular activities. Don’t speak poorly of your spouse in front of your kids. Put your kids first in everything you do.

The Scottsdale divorce attorneys at Canterbury Law Group handle complex divorce cases throughout Arizona, California, Nevada and New York. Their skilled litigation team provides no-nonsense legal counsel for family law cases at the highest level possible.

The law team at Canterbury thoroughly prepares clients while understanding that all cases have unique circumstances and laws vary by state and local jurisdiction. The Scottsdale divorce attorneys also prepare clients for the constant surprises that inevitably arise during the divorce process:

Length of divorce – Depending on your unique situation, divorce can take few months to well over a year, leaving issues that still need to be settled. The vast majority of matters resolve within one calendar year. More complex dissolutions with large asset bases and children, can take up to two years. At Canterbury Law Group, we help clients work out many divorce issues before entering court in attempt to eliminate or reduce long cases. The longer the case, the more expensive it is for both sides.

Court TV is not reality – Court TV may have constructed an unrealistic image of what court is like for the majority of divorce cases. In fact, most cases reach a settlement before needing to see a judge, or if you see a judge, it might only be for a few preliminary hearings and no trial if you elect to settle later.

Rescheduling is common – Expect your court dates to be rescheduled for other cases that take priority in your jurisdiction, such as criminal trials. You cannot insist upon a court date just because the court issued it. Rather, be prepared for rescheduling. Change is constant in a divorce proceeding.

Patience is needed – In most courthouses, your case will not be the only case scheduled for a hearing. Be prepared to sit and wait for other cases to be heard before yours. However, you must always be on time in the event the court is on time.

Everyone has an opinion – When you are going through a divorce, you will realize that everyone has an opinion. Ignore most of them because each case is unique, and no one can give you divorce advice better than your divorce attorney. Don’t rely on what you ‘hear’ or ‘read’ on the internet. Secure top legal counsel and let them steer you successfully to the resolution of your case so you can move on with your life. For more on divorce legal services, go to www.canterburylawgroup.com or call 480-744-7711.

Divorce & Legal Separation, Divorce Attorney, Divorce attorneys Scottsdale, Family Law, Scottsdale Divorce
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Inheritance and Divorce

Learn whether a court can divide your inheritance in a divorce.

Not necessarily. For purpose of divorce, the law usually categorizes property as either “marital” or “separate.” As a general rule, marital property is subject to division between the spouses; separate property isn’t. This is true whether you live in a “community property” state (like California), which divides property on a 50-50 basis, or an “equitable distribution” state (like New Jersey), which apportions property based on what the court believes is fair under the circumstances.

Is My Spouse Entitled to My Inheritance in Divorce?

That depends on a number of factors, including where you live. Each state’s divorce laws will govern how to address inheritance, in community property states and equitable distribution states as well.

In the overwhelming majority states, an inheritance is considered separate property, belonging exclusively to the spouse who received it and it cannot be divided in a divorce. That holds true whether a spouse received the inheritance before or during the marriage. But in a state like New Hampshire, for example, courts may consider an inheritance to be divisible in a divorce (unless you can persuade a judge that it shouldn’t be).

Now here’s the rub—although your state may initially view an inheritance as separate property, your actions can change it into marital property. Sometimes that happens intentionally in what is called a “transmutation of property.”

An example of an intentional transmutation of property from separate to marital is where a spouse inherits a house, then puts the other spouse’s name on the deed. The spouses move in and share the costs of living there. In that scenario, if a divorce rolls around, the inheriting spouse would be hard pressed to convince a judge that the house was never intended to be marital property.

But let’s say the inheriting spouse never puts the other spouse’s name on the deed, and neither spouse lives in the house during the marriage. At some point down the road, however, the non-owner spouse contributes to improvements which increase the house’s value. At the time of divorce, a judge might determine that—although the house itself may not be marital property—the increase in value specifically due to the improvements is a part of the marital estate, and thus subject to division between the spouses.

The most common example of converting an inheritance to marital property is when the inheriting spouse “commingles” (mixes) the inheritance with marital assets. This can be intentional, but often it happens by mistake. For example, Uncle Zeke passes on and leaves you $10,000 in his will. After you and your spouse break out the bubbly and toast the kindly gentleman, you put the money in an existing savings account that’s in both your names, and which either of you can access at will. If you did that because you wanted to share the inheritance money with your spouse . . . great! Mission accomplished.

But if you thought that putting that money in the joint account was just for convenience, and that it would always remain yours alone, you may have put yourself behind the proverbial eight-ball. By commingling the inheritance with marital funds, you’ve likely converted it into marital property. You can make an argument to the court that this was never your intention, but you’ll have an uphill climb.

Can I Claim My Ex’s Inheritance Received After Divorce?

Sharing a spouse’s inheritance after divorce is a nonstarter, unless your divorce judgment specifically addresses that topic.

That said, there is a situation where an ex-spouse’s post-divorce inheritance could come into play. If you’re receiving spousal support (alimony) or child support, you might be able to petition the court to increase the support amount, based on that inheritance or any interest income the principal is making.

Courts usually allow modification of support—both up and down—for a variety of reasons, such as a job loss, a spouse or child becoming disabled, or a spouse’s substantial pay increase (again, depending on the laws in your state).

You’d first have to see whether your state views an inheritance as a potential basis for a modification request. If it does, you may have viable grounds to seek an increase in support. Of course, this is going to depend in large measure on how significant the inheritance is. Your best bet for success is when the inheritance has substantially enhanced your ex-spouse’s standard of living.

 

Divorce & Legal Separation, Divorce Attorney, Divorce attorneys Scottsdale, Scottsdale Divorce, Scottsdale family attorneys, Scottsdale Legal Help
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