Beyond High School: The Cost of College for Divorced Parents
Divorce often brings about its fair share of financial challenges, and the hidden cost of college expenses only adds to the burden. As parents navigate the complexities of child support laws in Missouri, they must also consider the additional financial obligations that come with supporting their child's college education. This can catch many parents off guard, as they may not have anticipated the need to financially support their child beyond high school. It is crucial that parents know their rights and responsibilities under Missouri's child support laws.
Understanding Missouri Law
Under current Missouri law, child support continues past high school until age 21, as long as the child attends college or a vocational school. In addition, parents can also be obligated to pay college expenses until the age of 21. Pursuant to Section 452.340.5 of the Missouri Revised Statutes, for child support to remain in place and for parents to be responsible for college costs, the following requirements must be met:
Hours Requirement. Child must enroll at minimum 12 credit hours per semester, not including summer. If the child works at least 15 hours per week during the semester, the required hours are reduced from 12 to nine credit hours.
Grades Requirement. Child must successfully complete the required number of credit hours, meaning no failing grades in at least 12 hours per semester.
No Time Off Requirement. Generally, the child must enroll by October 1 following the child’s graduation from high school. This means that if the child takes a semester off before starting college, typically, the child support obligation would terminate and could not be reinstated if the child enrolls in college after that point, even if the child is under age 21 when the child enrolls. In addition, the child must be continuously enrolled in school, meaning that child support would terminate and could not be reinstated if the child takes a semester off.
Document Exchange Requirement. The child must provide transcripts or similar official documents to both parents at the beginning of each semester, detailing the child’s enrollment in classes and grades.
The law provides exceptions to the requirements above, including but not limited to a physical disability or other diagnosed health problem. In addition, the court will consider other circumstances that may justify a delay in starting school by October 1 after graduation or require a child to take a semester off.
If a child fails to meet the requirements above, the parent paying child support will need to file the appropriate documents with the court to initiate the court process to terminate child support.
If the child is enrolled in an institution and meets the requirements above, the parent paying child support, or the child, may petition the court to have child support payments paid directly to the child instead of paying the other parent.
How Collaborative Divorce Can Help
While the court in contested cases can only obligate parents to pay for certain expenses until age 21, many parents agree as part of their divorce judgment to pay for expenses past age 21 and to include these agreements as part of their settlement agreement. For example, both parents will pay 50% of college expenses for eight semesters or even later if the parents wish to pay for graduate school or medical school.
Through the collaborative divorce process, parents can reach creative agreements for post-high school expenses that will work for everyone. In a traditional divorce case, the attorneys and judge often do not have the capacity or ability to explore creative options. With the support of the financial professional and the cooperative dynamic of the entire collaborative divorce team, parents can explore options for dividing property or setting aside assets to capture the most available funds for the entire family.
Consulting with a collaborative divorce attorney will ensure that you are educated not only about the law, but about your options for working through the divorce process.
Maximizing Your Property Division Agreement Through the Collaborative Divorce Process
Divorce can be a complicated and emotionally draining process, especially when it comes to dividing assets. Property division can quickly become a contentious issue, with both parties fighting tooth and nail to get what they believe is rightfully theirs. However, there is a better way to handle property division during a divorce. Collaborative divorce is a process that allows both parties to work together and come up with a mutually beneficial agreement. This approach can save time, money, and emotional stress for everyone involved. Through the collaborative process, you can maximize your property division agreement and ensure that both parties walk away feeling satisfied with the outcome.
What is Property Division and Why is it Important?
When a couple decides to divorce, one of the most important issues is the division of their assets and debts ("property division"). The property can include real estate, personal property, financial assets, and retirement benefits. It is important to note that not all property is subject to division, and the laws governing property division vary from state to state or based on other rules. For example, company stock owned by an employee-spouse may not be transferrable to the non-employee spouse.
Property division is important because it can impact the financial well-being of both parties after the divorce. The division of property can also be emotionally charged, as each party may have a strong attachment to certain assets. Property division can also have implications for child custody and support, as the division of property can impact each party's ability to provide for their children.
The Traditional Approach to Property Division During Divorce
Traditionally, property division during a divorce has been a contentious and adversarial process. Each party hires their own attorney, and each attorney advocates for their client's interests. The parties may also hire experts, such as appraisers or accountants, to help determine the value of the property.
The traditional approach to property division can be time-consuming and expensive. The parties may spend months or even years fighting over their property in court, which can take a toll on their emotional and financial well-being. Additionally, the traditional approach can be unpredictable, as the outcome is ultimately determined by a judge who may not be familiar with the parties' unique circumstances.
How Collaborative Divorce Can Save Time, Money, and Emotional Stress During Property Division
Collaborative divorce is a process that allows both parties to work together to reach a mutually beneficial agreement. In collaborative, each party hires their own attorney, but the attorneys are trained in collaborative law and are committed to working together to help the parties reach an agreement. Additionally, the parties may also hire experts, such as financial planners or child specialists, to help them make informed decisions.
Collaborative divorce often saves time, money, and emotional stress because it allows the parties to avoid the adversarial and time-consuming process of traditional litigation. The parties work together to identify their goals and interests and then brainstorm ways to meet those goals, rather then the approach the court often applies which is splitting all assets 50-50. Collaborative divorce is particularly beneficial in property division because the parties can work together to determine the value of the property and identify creative solutions for dividing it.
Steps for Dividing Property in Collaborative Divorce
The parties first meet with their attorneys and identify their goals and interests. The parties then work together to identify their assets and debts and gather information about their value.
Once the parties have gathered all the necessary information, with the help of the financial neutral, they work together with the professional team to brainstorm options for dividing the property. The parties are able to explore unique solutions that work for them in attempt to meet everyone's goals, such as dividing certain assets or debts, selling certain assets and dividing the proceeds, or trading assets of equal value. The financial neutral on the team is able to speak to tax implications of dividing or trading certain assets, providing a helpful perspective during these meetings.
Once the parties have agreed on a property division agreement, the attorneys draft a formal agreement that is signed by both parties. The agreement is then submitted to the court for approval.
After the Judgment is entered, the team helps ensure that all property is properly divided and assist in transfers titles on real property and motor vehicles.
Tips for Maximizing Your Property Division Agreement Through Collaborative Divorce
If you are considering collaborative divorce for property division during your divorce, there are several tips that can help you maximize your agreement:
Be open-minded: collaborative divorce involves working together to find creative solutions. Be willing to consider options that may be outside of your initial preferences.
Be honest: collaborative divorce requires open and honest communication. Be upfront about your goals and interests, and be willing to listen to the other party's goals and interests.
Be patient: collaborative divorce can take time, but the end result can be worth it. Be patient and trust the process.
Work with experienced professionals: collaborative divorce requires attorneys and other professionals who are trained in the collaborative process. Work with professionals who have experience in collaborative divorce and are committed to helping you reach a mutually beneficial agreement.
Keep the focus on the future: collaborative divorce is about finding solutions that work for both parties. Keep the focus on the future and what will be best for you and your family after the divorce.
Common Misconceptions About Collaborative Divorce and Property Division
One misconception is that collaborative divorce is only for amicable divorces. In reality, collaborative divorce can be beneficial in any divorce situation, including those involving contentious property division issues, as long as parties are committed to fully disclosing all financial information requested and being respectful. Even in contested cases, most all financial information is disclosed through formal and informal discover in a divorce case.
Another misconception is that collaborative divorce is not effective in complex property division cases. In reality, collaborative divorce can be extremely effective in the most complex property division cases, as long as the parties are committed to working together to find creative solutions.
Finally, some people believe that collaborative divorce is more expensive than traditional litigation. In reality, collaborative divorce can be more cost-effective than traditional litigation, as it can help the parties avoid costly court battles and lengthy court proceedings.
Next Steps for Utilizing Collaborative Divorce in Your Divorce Proceedings
Property division can quickly become a contentious issue, with both parties fighting tooth and nail to get what they believe is rightfully theirs. However, there is a better way to handle property division during a divorce. Collaborative divorce is a process that allows both parties to work together and come up with a mutually beneficial agreement. This approach can save time, money, and emotional stress for everyone involved.
If you are considering collaborative divorce, the first step is to find an attorney who is trained in collaborative. Your attorney can help you understand the collaborative divorce process and can help you identify your goals and interests. From there, you can work together with your attorney and the other party to identify creative solutions for dividing your property.
Collaborative divorce can be a powerful tool for maximizing your property division agreement and ensuring that both parties walk away feeling satisfied with the outcome. By working together, you can avoid the adversarial and time-consuming process of traditional litigation and instead focus on finding solutions that work for everyone involved.
How Can We Make Decisions During Our Divorce When We Couldn't Make Decisions in Our Marriage?
There are many decisions that every couple has to make in
the process of getting a divorce. How
will the assets be divided? Who will
keep the house and, if we don’t sell it, how will we determine the value of it? How will we share time with the
children? How will we divide our
household items? How will we pay for the
children’s expenses? How can we make
sure we both have enough money to live on month to month?
Help in the Decision Making Process
People typically feel overwhelmed by these questions yet it
is difficult to turn these decisions over to lawyers or a judge and relinquish
control over the outcomes. In a
collaborative divorce, unlike mediation or litigation, there is a team of
professionals to help you determine what decisions need to be made and to coach
you through the process of making them.
You have your own lawyer in the room, along with the lawyer for your
spouse, to make sure all the legal issues are covered. There is a financial professional who can
discuss the tax consequences of the decisions you are making along with showing
the long term financial outcomes of the options you are considering.
There is also a
mental health professional who, having mediation training, is able to teach you
a decision making process, something most married couples have never
developed. The first step is to define
the question to be answered or the problem to be solved. Second, all
information relevant to the problem to be solved is gathered and verified. The third step involves a discussion of what
is important to each person, their reasons for wanting a specific resolution. For example, you have one orange and you both
want it. Further discussion of interests
reveals that the wife wants to make marmalade and only needs the zest and the husband
wants the only the juice for a recipe. A
judge would merely cut the orange in half, but in the collaborative process the
solutions can be creative and based upon the interests of the parties.
Once the information is gathered and the interests are
known, the brainstorming process of generating options begins. No option is off the table. At this point, more information may be needed
about specific options to determine their viability. Once that is gathered, the next step is to
evaluate the options by discussing the pros and cons of any that either one of
the couple feels might work. Often the final solution is a hybrid of two or
more options. This discussion is
facilitated by the team and leads to the final step, a decision about how to
Lessons Learned in the Process
These discussions can still be difficult and emotional, but couples who are willing to follow the process and stick with it, will emerge with a final divorce settlement document. The hope is that they also have learned more about how to make decisions and are better able to work together to raise their children.
The collaborative divorce process provides many couples with the opportunity to make well informed decisions. It is a supportive process where new skills can be acquired and utilized after the divorce is final. Reach out to Nancy Williger or explore our website to learn more about the collaborative divorce process.
Property Division in Divorce: How to Figure Out Who Will Get All the “Stuff”
Even in relatively short, and certainly during longer marriages, couples acquire and accumulate property. This property might include cars, real estate, furniture, artwork, and miscellaneous “stuff.” Some of the items (for example, kitchen dishes, utensils, and glassware) may not have a lot of value if one went to sell them but could cost a fair amount of money to replace. When divorce is on the horizon, people often wonder how all of it will be divided and they want to make sure they get their fair share.
If your divorce is litigated in court, property division can be very complicated and contentious. All property must be (1) “characterized” or identified as marital or joint (with both parties having an interest), separate (belonging only to one party) or partly marital and partly separate, (2) valued, and (3) allocated (awarded) to one or both parties. Each of these determinations can be both complex and time-consuming and, consequently, expensive.
Identification of property as marital or separate
To determine what property is marital the court will try to determine when it was acquired (if during the marriage, it’s probably marital), whether it was inherited by or gifted to one party and kept separate from the other party during the marriage (this is probably separate property), or whether it was brought by one party to the marriage and then shared with the other party (this might be part separate and part marital). Property that is part separate and part marital might include retirement assets or real estate.
Valuation of property
Each item of property must also be assigned a value. Some property can be valued using online resources (like Kelley Blue Book for cars) or even by the parties (an owner of real estate can estimate its value). More valuable property (for example, real estate, artwork or antique furniture) may need to be valued by a professional appraiser. Arguments often erupt over property valuations because one party or his/her appraiser may arrive at a value wildly different than that arrived at by the other party or
His/her appraiser. A “battle of the appraisers” at trial then ensues, leaving it to the judge to decide who is right. This is a very expensive scenario.
Division of property
In a litigated divorce, the judge will decide who gets what and in what proportions. One party could be given a greater percentage of the property if there is marital misconduct, or if other circumstances are present which persuade the judge that an unequal division is “equitable” or fair. Judges often split the assets equally between the parties even when there is bad conduct by one party.
Complicated and a bit maddening, right?
Division of property in collaborative divorce – the story of the lemon
In collaborative divorce, making decisions about property is so much more civil. There is a story in collaborative circles about dividing an item of marital property: a lemon. In a litigated divorce the judge is likely to order that the lemon be cut and one-half of it be awarded to each party. On the surface, this would seem to be fair. When one considers, however, that one of the parties wanted the juice of the lemon to make lemonade and the other party wanted the zest of the lemon to make pie, the result no longer seems fair or equitable since the lemon is now unusable by both parties for their respective intended purposes. This is why, in collaborative practice, the parties focus on the needs and interests of each. Why do you want the lemon? Do you need all of it or will less than the whole meet your needs? Could you take the peach instead?
In the collaborative process the parties can together assign values. If they can’t agree on value, they can together choose one or more appraiser(s) to assign value(s) and decide how they want to use those values. Most important, the parties can, with the help of the collaborative team, decide who gets what and in what proportions: one party might get more of one asset and less of another, or it will be a 50-50 split of all property, or that one party will stay in the house for a period of time and that it will then be sold, or any number of creative solutions that make sense for your family.
When you and your spouse focus on your respective needs and interests, as you will in the collaborative process with the help of your collaborative team, you can reach unique solutions that are individualized for your family. As much as a judge may want or try to do that, he or she is unlikely to reach a result that is exactly right for your family. And you will have spent a lot of money in the process.
Deciding upon and transitioning property in divorce can be daunting. Certain divorce processes support a better planned transition than others. To learn about your Missouri divorce process options contact one of our experienced St. Louis Collaborative Law professionals today.
Cynthia Garnholz is a St. Louis family law attorney, collaborative law professional and trained mediator. She is experienced with helping one or both spouses achieve settlement. To learn more about your Missouri divorce options give her a call or visit her website.
Collaborative Practice and the Economics of Divorce
Facing a divorce is a daunting, sometimes frightening prospect, and “How much will my divorce cost?” is perhaps the most consistent concern among those considering ending their marriages. As with so many other divorce-related issues, the answer is usually, “It depends.”
Aside from issues such as valuation, misconduct, hiding assets, addiction, and dissipation, all of which can add to the cost of a lawyer’s services, the process by which the divorce takes place can play a major role in increasing or decreasing the overall cost.
In a collaborative divorce, each spouse has a lawyer, and other professionals, including a financial specialist and mental health coach, are routinely included as part of the problem-solving team. A child specialist may also participate in the process. With all of those professionals involved, it may sound as if a collaborative divorce is unaffordable for many couples.
There are, however, good, solid reasons a collaborative divorce will likely save you money in the long run. Here are two:
The Right Professional for the Job:
Lawyers know the law and they know about negotiations. They are not, however, as well-versed in financial issues as a financial advisor or CPA. The financial professional assists not only in gathering the financial information but also in analyzing tax consequences, and suggesting ways of saving taxes. The mental health professional keeps the divorcing couple on task by helping them cope with the challenging emotions they are experiencing, and uses their knowledge of child development to help the parents create a workable parenting plan to serve the children’s best interests.
Creating a Positive Track Record Today for Success Tomorrow:
Because the traditional divorce process is based upon the civil courts model of one party opposing the other, divorcing spouses find themselves having both to attack their partner and defend themselves, often at the cost of upsetting and alienating their children. Then, when the divorce is complete, the warring parties have to figure out a way to engage in cooperative parenting. Having spent months or more staring at each other across battlements, they now have to figure out a way to sit together at parent-teacher conferences, cooperate around scheduling changes, and plan birthday parties together.
A collaborative divorce is conducted using interest-based negotiations, a system of coming up with solutions to difficult problems by taking into account what each person needs and wants, rather than by pointing accusing fingers. When spouses learn to listen to each other, a skill that is constantly reinforced in the collaborative process, they discover that, even though they no longer want to be intimate partners, they can learn to work together for their children’s benefit. Then, when changes need to be made to the parenting plan or to the support arrangements, they know that, having worked peacefully through their divorce, they can return to the bargaining table, rather than starting new battles, thereby saving both their financial and emotional resources.
When considering how you want to conduct your divorce, think not just about your immediate pain or anger but also consider what you want your future and that of your children to look like. Avoiding future conflict will bring peace to you and your family, and will save you thousands of dollars as you avoid court battles over enforcement and modification of your divorce judgment.
Navigating and transitioning the divorce process can be daunting. Certain divorce processes support a better planned transition than others. To learn about your Missouri divorce process options contact one of our experienced St. Louis Collaborative Law professionals today.
Alan Freed is a St. Louis family law attorney, collaborative law professional and trained mediator. He is experienced with helping one or both spouses achieve settlement. To learn more about your Missouri divorce options give him a call or visit his website.
Many people overlook the importance of credit after divorce. From start to finish divorce can feel more like a whirlwind than an orchestrated and well-planned process. Most couples will only realize the importance of protecting their credit after divorce. The best approach to protecting your credit is to be proactive. I've outlined the basics of understanding your credit and steps you can immediately take to protect it.
3 Steps to Protect Your Credit Before, During, & After Divorce
What is Credit?
Credit refers to your ability to borrow. Your credit is a reflection of your reputation as a borrower. When you try to obtain loans or a line of credit your “credit” gives the lender information that tells them how likely you are to repay the loan or line of credit.
Understanding the Impact of Low or No Credit After Divorce
Your credit determines your ability to buy something without requiring an all-cash payment or a cosigner. So, if you have a low credit score or you have no credit history of your own, then it will be difficult to qualify for loans independent from someone else. Little or no credit can make it difficult to obtain a loan for buying a house, renting an apartment or buying a car. The inability to obtain these items independently can make it hard for people to begin a financially independent single life post-divorce.
How Do Lenders Acquire Credit Information?
Lenders, credit card companies, insurance companies, landlords, and even some employers will pull your credit report. Your credit report is a collection of information that tells them things like:
Loans you’ve had in the past, how much you’ve borrowed on each loan, and your payment history on those loans. Whoever has pulled your credit is wanting to know how many times you were late in making payments. This information is used to tell the potential lender or landlord about your historical behavior in paying your debts. They will use this in determining how likely you are to pay on debts in the future.
Loans you currently have and the minimum monthly payment of each loan. They also see things like the funds you could borrow if you wanted to – such as credit card limits on open credit cards. What they want to know is how much you have in minimum payments each month. Compare that total to your available income and then see how much you have left over to afford the new payment.
Bankruptcy, foreclosure, account write-offs (such as an overdrawn bank account, unpaid medical bills, unpaid utility bills, etc). If you see an error on your credit report, then you can dispute it. The credit bureau will ask for certain information to show that you paid the debt in full and on-time.
Your credit report is the master document behind your credit score. It serves as your reputation for paying your debts and bills.
3 Steps to Protect Your Credit Before, During and After Divorce
First step to protecting your credit after divorce: pull your credit report. You are allowed to pull 1 free credit report each year. For my clients, I make this part of the necessary documents in the divorce process. If someone is contemplating divorce, then I always recommend they pull their credit report sooner rather than later. And when I’m working with both spouses I have each person pull their credit report. The information from the credit reports allows us to see which accounts are open, even if they are not being used, and if they are individual accounts or joint accounts. Being informed is the first step in protecting your credit after divorce.
Second step to protecting your credit after divorce: keep your address up-to-date. If you receive statements in the mail and you and your spouse decide to live separately during the divorce, then you will want those statements to come to your new residence. If you have joint credit cards or joint loans you will want to be able to access those statements electronically. Most lenders now have electronic statements available. Customers can login to their account and view them. Whenever possible, you should share this information with each other so you can each go in and look at the statement monthly.
Third step to protecting your credit after divorce: for each loan you have – either jointly or individually – set up an automatic payment for the minimum payment. There’s a great deal to think about and take care of in the divorce process. Bills can escape immediate attention and get lost in the shuffle. Automatically making the minimum payment will save your credit score by avoiding late payment notifications. You will also benefit by avoiding those annoying late fees.
Critical Fact to Understand About Your Credit After Divorce
It’s important to remember that divorce won’t affect your credit directly, but for the reasons mentioned above, divorce can affect your credit indirectly. The best action you can take is to be proactive, be informed, and make sure you know the loans and accounts you are responsible for.
Be mindful that when your name is tied to a debt you are responsible for the payment - even when the divorce decree states your former spouse is responsible for it. So, if your former spouse fails to make a timely payment, or fails to make any payments after the divorce, then your credit can be impacted by their non-payment.
In most situations, the financial institution only cares about the name(s) associated with the debt. Unless your name is removed from joint debts in the divorce process, the financial institution will come to you for payment when your former spouse fails to pay.
Transitioning to the divorce process while planning for your financial future is multifaceted and requires a multipronged approach. Certain divorce processes support a better-planned transition than others. To learn about your Missouri divorce process options contact one of our experienced St. Louis Collaborative Law professionals today.
Nicole Davis is a certified divorce financial analyst, trained mediator and collaborative law professional. She is experienced with helping couples achieve a good financial settlement. To learn more about divorce finances give her a call or visit her website.
Money has emotion attached to it. Money represents security and safety. Lack of money means insecurity and fear. Divorce means money will be split up. Splitting one pot of money into two pots of money creates emotion, and rarely are these emotions positive.
For many in divorce, it’s a surprise that their 401k is a marital asset. This happened to me. I had worked hard to save the money in my work retirement plan and I was proud of what I had managed to put aside. With an ex who was a small business owner, that retirement nest-egg was critical. When it came time to split up, however, I wanted to hold on to what I felt was my retirement. In my mind, it was mine! In reality, it was not mine, it was a marital asset and subject to being split in the divorce. This misunderstanding on my part caused me to have angst and to feel anger, which complicated the negotiations and created more acrimony.
This is, sadly, an unfortunate and common scenario. For many, the money they have saved in their work retirement account is the bedrock of their retirement plan. Losing any of it causes insecurity and fear, which in turn causes anger, resentment and the possibility of a protracted fight in divorce court, aggravating the process and costing even more money with professionals.
The bottom line is this: be aware that any savings accumulated in the course of a marriage is a marital asset and subject to be split in divorce.
Work to put your emotions aside as you make decisions that will impact your future, your soon-to-be-exes future and possibly your children’s futures.
Money represents security. In the process of divorce, look for the ways to create and rebuild two new foundations for security where there once was just one. Remember, your family is still a family, even when there are two houses.
Laura is a financial professional and former member of CFLA.
Buying a House After Divorce
If not already, then at some point in the future you and your spouse will live separately. Like many people, you may think about buying a house after divorce. If this is your goal, then there are several things you will need to consider. Protecting your finances will need to be a top priority. The sooner you start planning the more prepared you will be to accomplish your goal.
Here are 4 Financial Tips to Buying a House After Divorce
Establish Your Income
It will be important to establish your own income. For you, this may be easy or challenging. Perhaps you're established in your career and currently earn income. Or, perhaps you are receiving income from a pension, social security, dividends or interest. Regardless of your situation, it will be important for you to establish your income because lenders consider income as part of your ability to repay a mortgage. Sporadic income will reflect negatively on your ability to repay a mortgage.
Establish Your Cash Flow
The amount and frequency of your income will impact how much house you can afford. It will also determine the funds available to pay your monthly expenses. You will need to do an evaluation of the money available for housing expenses. This is calculated as:
Income - Basic Expenses (before housing) = Money Available for Housing Expneses
You will then need to calculate the expenses associated with buying a house after divorce. It might help to think of your expenses and how they fall into these categories:
Ongoing Monthly Housing Expenses
Once you know your ongoing monthly housing expenses you will calculate how much money you have left after basic needs and housing expenses - this is called discretionary income:
Money Available for Housing - Ongoing Monthy Housing Expenses = Discretionary Income
Helpful Tip: It can be challenging to think of all the potential expenses related to buying and owning a home. Here are some things to keep in mind about one-time purchase expenses and ongoing monthly expenses:
One-time Expenses of Buying a House After Divorce:
Funding the escrow (prorated current year real estate taxes)
First year of insurance premiums
Loan processing fees
Ongoing Expenses of Buying a House After Divorce
Mortgage payment (principal, interest, taxes and insurance)
Utilities: electric, gas, water, sewer, trash, cable, phone, internet
Establish Your Credit
You will want to establish your own credit as soon as possible. This could take some time if you have little credit history or when your credit has been established jointly with your spouse. While married, you may not have opened loans or charge cards in your name individually. Most joint loans and credit cards are closed during the divorce process. The closing of those accounts can negatively impact your credit.
If this happens, then it can be difficult for you to qualify for loans and charge cards in your name solely. There are steps you can take to establish credit before, during and after divorce.
Protecting Your Credit
Unless you are paying cash, your credit will be the most important factor in your ability to buy a house. Therefore, it is very important to protect your credit before, during and after divorce. The best approach is to be proactive.
Here are some steps you can take today to protect your credit:
Pay individual and joint bills on time, every time. This is true before, during and after divorce. The best way to do this is to set bills up on auto pay or request that your spouse do so. This will help you avoid unnecessary late fees, as well as unnecessary reporting to the credit bureaus. Life is busy and it’s easy to forget about certain bills. So, make your life easier by setting up automatic payments for everything that you can. Also, you may not know this, but creditors generally care about the name(s) of the individual(s) on the loan or account. They don’t generally care about the agreement outlined in the divorce paperwork. Therefore, they will try to collect payment from the people on the account. This may be different than than the agreement made in your divorce settlement.
Pull your credit report. The best protection is prevention. Be informed and pull your credit report. You can pull your annual credit report for free. Review your report and make sure you know what accounts are open in your name – individually and jointly. If you and your spouse agree that one person will be responsible for a joint debt after divorce, then make sure the debt is either:
Refinanced into the responsible person’s name
There is some agreement to automatically make the payment and there is regular reporting of the payments made
The joint debt is paid in full during the divorce process or as part of the divorce settlement
Transitioning the divorce process while planning for your future is multifaceted and requires a multipronged approach. Certain divorce processes support a calmer, better planned transition than others. To learn about your Missouri divorce process options contact one of our experienced St. Louis Collaborative Law professionals today.
Nicole Davis is a trained collaborative law professional. She is experienced with helping couples achieve a good financial settlement. To learn more about divorce finances give her a call or visit her website.
Parents naturally are most concerned about their children at the time of divorce. One of the most important issues to be decided is how and in what amounts the children will be financially provided for.
Missouri Form 14
The Missouri Supreme Court has developed a way of calculating the amounts needed for support of children: it is called the Form 14 and it is readily available on the internet. The Form 14 child support amount is based on the gross (before tax deductions) income of each parent, the number of children of the marriage and various adjustments to income, including (among others) the cost of work-related child care and health insurance for the children.
Calculating Missouri Child Support
The Form 14 seems deceptively simple. It might appear that all one needs to do is plug in the gross income of each party, along with some other expenses like day care, and then out comes a child support number. Calculating child support is not, however, as easy as it might first appear. For instance:
Should bonus or overtime income be included in gross income?
Should private school tuition be included as an expense for one or more children?
What if a party has remarried – should the new spouse’s income be included?
Should the amount of parenting time for each parent affect child support?
What if a parent who had a high paying job loses the job – should child support be based on the income he or she was previously making?
Who get the child tax credit?
These and many other questions can cause distress and conflict when trying to come up with the “right” amount of Form 14 child support. Fighting this issue in court can turn into a bitter and expensive battle with your spouse.
Collaborative Divorce and Child Support
In the collaborative divorce process you and your spouse can look at your individual circumstances and come to creative solutions that meet the interests of each of you and, most importantly, your children. With the help of your collaborative attorneys, your coach, and your financial professional, you and your spouse can discuss what your actual expenses are for your children and then come to decisions about how you want to pay those expenses. Maybe you will decide that no child support money will flow from one parent to the other parent and that you and your spouse will each pay certain expenses or certain percentages of all of the expenses for your child. Or, maybe you will decide that it is right that one parent pay child support to the other and agree on the correct amount for your family. Or, you might conclude that an agreed upon support amount will be paid less than 12 months per year.
The options available to you in collaborative divorce for making decisions about what is best for financial support of your children are limitless. Using the collaborative divorce process to analyze financial support of your children allows you, with the support and help of your collaborative team, to take a deeper dive into thinking about what your children need and what you and your spouse will be able to afford after the divorce. Once you are armed with the facts, you and your spouse can make informed decisions about how best to provide for your children in your unique family situation.
How to Have an Inexpensive Divorce
No one wants a long, expensive, and contentious divorce. While sometimes unavoidable, there are many things that you and your soon-to-be former spouse can do to keep the process of the dissolution of your marriage as civil and efficient as possible.
7 Tips to Lower Your Divorce Costs
1. Understand Your “Process Options”
Most divorces end with an agreement not a trial, but the path to the agreement can look very different depending on the process you follow. It’s important to choose a process that gives you and your spouse as much help as you need to reach an agreement, not more and not less. Do your homework so that you understand the differences between traditional litigation, a collaborative process, mediation and a simple non-contested divorce, before you dive in to the legal process and substantive negotiations. Choose a process that is most likely to work for your situation. A meeting with your spouse and a mediator or divorce coach can help you to assess what path may work best for your family.
2. Be Organized
Regardless of the process you use, your lawyer will need detailed financial and other information from you throughout your case. Giving your lawyer the needed information in a timely and organized way will help your lawyer to be more efficient. Follow up phone calls and the need for multiple edits will add to the cost of your legal bills.
3. Try not to Scare Each Other
Often during a divorce process, trust is low and anxiety is high. Making unanticipated financial moves or taking unilateral action regarding your children can set off an adversarial snowball which can be difficult to stop. If you and your spouse can manage finances wisely and treat each other fairly while your marriage is unwinding you will avoid expensive interventions by your lawyers and the court while you are making your final decisions.
4. Manage Your Emotions
Strong emotions are normal during a divorce process but they can get in the way of making good business and financial decisions. Working with a therapist as you move through this transition can help you to keep your cool during a difficult time.
5. Don’t Sweat the Small Stuff
Disagreements over household goods, furnishings or personal items can take on emotional significance well beyond their financial value. Talk with your mediator, lawyer or therapist about ways to approach division of these items in an orderly way without involving your lawyers in those negotiations.
6. Minimize New Relationships
Even though your marriage is ending, the introduction of a new person in your life before things are finalized can cause strong emotional reactions in your spouse. This is can be even more so if children are introduced to new relationships. Extra marital relationships can sometimes impact your financial settlement, but even when that is not the case, these relationships can make your divorce more contentious and expensive. Waiting to move on until your marriage has ended will help the dissolution go more smoothly.
7. Say Yes When You Can
When dealing with your custody arrangements, if your spouse needs accommodation, whether to reschedule a weekend, or have a child for a special occasion, say yes if you can. This will set the groundwork for a cooperative co-parenting relationship rather than starting things off on an adversarial track.
It takes two to keep things from escalating from a problem to be solved to a war to be waged, but if you follow the above steps you will increase the chances that the dissolution of your marriage, while tough territory under any circumstances, will be as civil and efficient as possible.