Reasons to Hire a Divorce Attorney

Divorce is a situation that few people ever plan, budget or save for. It is also a significant disruption to everyday life. Housing, finances, family relations and friendships can be seriously affected by a divorce, however amicable. Deciding on the best way to handle the divorce goes along with the decision to pursue divorce at all.

Even people who would prefer not to divorce often come to believe they have no choice but to go through the process. Many people wish to avoid the expense and hassles of traditional divorce litigation but do not know how. Couples who think they agree on how to divide property and how to cooperate in the care of children may also think that they can save time and money with a low-cost “do-it-yourself” (DIY) divorce, with no lawyer involved.

If you are considering a DIY divorce, we would challenge you to think again. Navigating the many avenues of divorce can be complicated, and you may want a professional there to guide you and help you through your case. There are a variety of reasons that a divorce attorney can be an invaluable asset in your case. For one, a divorce attorney can offer expert advice. You may not understand the ins and outs of family law, but an attorney can look at your situation and know what laws apply.

An attorney may be able to work to make sure that you receive retirement funds or other income from an ex-spouse in the future, and may be able to resolve complications. Also, a divorce attorney understands how to work through child custody and support issues and will do so in your favor.

In addition to being a wealth of knowledge, an attorney can reduce stress during the divorce. Divorce is always a stressful time for those involved, but an attorney can help deal with the legalities of the process so that you can cope with the emotional effects. An attorney can also help you to avoid mistakes.

If you are doing a DIY divorce, there is a chance that you could mess up on paperwork or fail to disclose details about your marriage because you didn’t know that they were required. You may simply forget to address an important issue such as medical debt, or you may overestimate the value of an asset. Most of these mistakes can be effectively avoided, and all you have to do is hire a divorce attorney to help you with your case.

Also, a divorce attorney can ensure that you have a clear and binding agreement with your spouse that is less likely to be broken or contested later on. The court is permitted to review any divorce documents that you present but an attorney can create documents that specifically state your wishes. Lastly, hiring a divorce attorney can help you to avoid delays. When you are doing a DIY divorce, the court may not be motivated to move your process along. With a divorce attorney on your side, you may be able to push the process along faster.

Learn more by contacting The Law Office of Matthew J. Rudy for a free 1 hour consultation today.

Collecting Unpaid Child Support in California

Collecting unpaid child support is an on-going problem for many custodial parents. High unemployment and the national economic situation leads to more people than ever unable to meet their financial obligations including child support payments.

There are a growing number of individuals who have exhausted their unemployment benefits and cannot find work. Bankruptcy, while offering relief from a variety of consumer and medical debts, does not offer relief for a former spouse who is behind in support payments.

California and other states have implemented new ways to help encourage parents to stay current on child support obligations. Even if the non-custodial parent lives in another state, federal child support law requires cooperation between states. The non-custodial parent is legally required to make regular child support payments, regardless of where they live.

California Child Support Enforcement Measures

In order to cut down on the amount of unpaid child support California has enacted provisions that allow for interest and surcharges to be added to delinquent child support accounts. If you have had a change in your income that makes it impossible for you to comply with your current child or spousal support orders it is important that you promptly file for a modification of these orders.  The Court only has the ability to modify support orders retroactive to the date that such a request if filed.

California law requires that interest be charged on delinquent child support accounts. In addition, when a parent that is required to pay child support is 30 days or more delinquent, their name can be submitted by the Department of Child Support Services (DCSS) to the DMV for suspension of their driver’s license. DMV sends a letter giving the parent 150 days to work with DCSS to pay their past due support. If payment is not made, the driver license suspension will take place.  These  laws make no distinction between someone who is financially able to make payments and does not and someone who was unable to pay because of job loss or disability (scscourt.org).

Here is a list of further options:

1. A “wage assignment” is typically imposed to collect regular and past-due payments directly from the paying parent’s paycheck. Funds are deducted by their employer and remitted directly to the custodial parent.
2. Fines and/or possible imprisonment may be imposed by the court
3. Court-ordered earnings withholding which can result in up to 50% of the paying parent’s other income being withheld by their employer(s).
4. Past-due child support may be collected from federal and state income tax refunds, state or property tax credits, and lottery winnings.
5. Liens may be filed against his or her real property or other assets.
6. Applications for state issued business, professional and driver’s licenses (for example: cosmetologist, contractor, doctor, teacher, attorney, class A, B, and C drivers licenses) to parents with past due child support payments may be denied for new licenses or renewals. Current licenses may also be suspended or revoked. Compliance with an agreement to pay past-due child support is required for reinstatement.
7. Workers’ compensation lump sum payments owed to non-custodial parents may be collected to pay past due child support. (supportkids.com)

Interest on Missed Child Support Payments

The State of California allows for interest to be charged on missed support payments at a rate of 10% per year. Interest accrues from the date an installment is due if support is payable in installments, or from date of entry of judgment if a lump sum support order was made.

California also charges interest on back child support at a statutory rate of 10% per year. Interest accrues from date installment is due if payable in installments, or from date of entry of judgment (singleparents.about.com).

Age of Emancipation / Age of Majority in California

Child support must be paid until the child becomes 18, unless the child has not graduated from high school, in which case the child support continues until the child has graduated high school or turns 19, whichever occurs first. California law does not allow the court to impose continuing support beyond the age of 19, unless the child is physically or mentally disabled or otherwise incapacitated from earning a living. However, if the parents have agreed that child support is to continue into the college years, such an agreement will be enforced by the Family Court (singleparents.about.com).

California has no statute of limitations on past due child support payments; child support is enforceable until paid in full. There is also no statute of limitations on establishing paternity. Paternity can be established at any time. Parents in California have options available for collecting delinquent child support. California families may utilize services available through the California Department of Child Services (scscourt.org).

If your child is suffering from the effects of unpaid child support payments, we may be able to help. Contact the Law Office of Matthew J. Rudy for a free 1 hour consultation.

Paternity and Child Support

Establishing paternity, or determining a parent child relationship, is legally necessary in order to collect child support. If a child’s parents were not married to each other when the child was born, the law does not recognize the father unless paternity is legally established by a court order. Establishing paternity will give your child the same rights and benefits as children born to married parents. Unmarried parents can establish paternity by signing the voluntary Declaration of Paternity. This can be done in the hospital after the child is born. A Declaration of Paternity may also be signed by parents either before or after they leave the hospital (Wikipedia).  The federal government provides a payment to the hospital for each Declaration of Paternity signed.  The signed Declaration of Paternity has the effect of a legally binding Judgment of Paternity.

An acknowledged father is a biological father of a child born to unmarried parents, for whom paternity has been established by either the admission of the father or the agreement of the parents.  An acknowledged father must pay child support.  An unmarried man who impregnates a woman is often referred to as an alleged father until there has been a finding of paternity.  An alleged or unwed father will be required to pay child support if a court determines or he acknowledges that he is the father; in addition, an alleged or unwed father has the right to visitation with his child and may seek custody (Babycenter.com).

If parents are registered domestic partners when a child is born, the law assumes that the domestic partners are parents. However, same sex parents should get legal advice to make sure that the parentage is clear. Parents who are not married when a child is born can sign a Voluntary Declaration of Paternity before they leave the hospital, or after. When people who are not married cannot agree about parentage, the Court can order genetic testing. Usually a child’s parentage must be established before you can get child support or custody and visitation orders. You can ask the Judge for child support or custody and visitation as part of a case that establishes the parentage of a child (Nolo.com).

Can I get child support if I am not sure who the father of my child is?

No. Paternity must be established before child support can be ordered. Paternity gives your child many rights, including child support, access to medical records, government benefits and more. However, you can get CalWORKS without paternity (Nolo.com).

What if the father leaves the state before it is proven that he is the father?

The local court may use information they have to decide paternity without him. If paternity is established without the alleged father’s cooperation, the court may order him to pay child support no matter where he lives, even if he is out of California (Babycenter.com).  Once service has been achieved on the alleged father the Court will likely have jurisdiction over the alleged father, particularly if the child was conceived in the state of California.

The man does not have any money or a job to support our child. Why should I bother proving that he is the father?

If you do not establish paternity, your child will not be able to get child support or health insurance even after the alleged father gets a job. Proving he is the father as soon as possible makes collecting child support easier later on (Nolo.com).  Once a child support order is in place the local Department of Child Support Services, if involved in enforcing the order should be alerted of the child support obligor’s new employment once the obligor begins to show up on the new employer’s payroll tax records.

Can I start my case while I am pregnant, before my baby is born?

You may start the paperwork to establish paternity when you are pregnant. The local child support agency can only open and pursue the case after the child is born. If the man you believe is the father denies that he is the father, a genetic test can be ordered after your baby is born. (Some labs will only perform genetic tests after a child is six months of age or older). Genetic tests can be scheduled through the local child support agency (Nolo.com).

Can paternity be established for my child if the father lives in another state?

Yes. The local child support agency will ask for a genetic test from the court in the other state. Also, a man can sign a Declaration of Paternity voluntarily declaring he is the child’s father even if he lives in another state (Nolo.com).

For more information, please contact The Law Office of Matthew J. Rudy for a free 1 hour consultation.

Palimony

Many people believe that if a couple lives together for a period of years and holds themselves out to the world as a married couple, then the couple will be considered to be “legally married.” While this may be true in certain states, California abolished these common law marriages over a hundred years ago. A common law marriage can never be created in California; however it will recognize common law marriages that were created in states which do recognize them.

Even though California does not allow for common law marriages, couples who live together may still have rights to financial support and property division as if they had been legally married, but only under strict circumstances.  In these cases, if one or both persons in the relationship had a reasonable and good faith belief that they had entered into a valid marriage, but it turned out the marriage was void, then that person can be considered a “putative spouse.”  To be given the status of a putative spouse, it is not enough to say that you simply believed you had a common law marriage.  Instead, the couple must have actually gone through the motions to get married, yet had something go wrong when trying to comply with the legal requirements for marriage (often this happens when one person was in a prior marriage and mistakenly thought that he or she was legally divorced).  Not only that, but this good faith belief that you are married must continue throughout the marriage, if you find out that the marriage is invalid, then you lose putative status.  Recently, it was also established that these same principles can be applied to couples who were in an unregistered domestic partnership.  A person with putative spouse status will be entitled to share in property acquired during the invalid marriage or domestic partnership under our community property laws, and to any spousal support that is required once the relationship is terminated.  A putative spouse may also have marital-type rights in other situations as well, such as workers compensation or retirement benefits (Wikipedia).  The spouse who knew or should have known that the marriage was not valid will typically not be able to benefit from these provisions.

A second category involves the rights of unwed couples who are not putative spouses (because they never tried to get married), but had an agreement to treat assets like community property or promised lifetime support, despite the fact that both partners knew they were not married.  Here, no one is entitled to support or property rights under California family law, but there can be rights created under the oral or written contract.  One person may have promised to provide support for the other that’s similar to spousal support (alimony), and this has come to be known as “palimony.”  These palimony actions started in the early 1970’s after actor Lee Marvin broke up with his girlfriend Michelle Triola, whom he had lived with for several years (Nolo.com).

Marvin Case

In Marvin, the plaintiff, Michelle Triola, alleged that she and Lee Marvin entered into an oral agreement which provided that while “the parties lived together they would combine their efforts and earnings and would share equally any and all property accumulated as a result of their efforts whether individual or combined.” The parties allegedly further agreed that Michelle would “render her services as a companion, homemaker, housekeeper and cook.” Michelle sought a “judicial declaration of her contract and property rights, and sought to impose a constructive trust upon one half of the property acquired during the course of the relationship.” (NYTimes.com)

The trial court granted a judgment on the pleadings in favor of the defendant, Lee Marvin, holding that the alleged agreement was unenforceable. The California Supreme Court reversed, stating that “a contract between non-marital partners is unenforceable only to the extent that it explicitly rests upon the immoral and illicit consideration of meretricious sexual services.” The Court held:

“In summary, we base our opinion on the principle that adults who voluntarily live together and engage in sexual relations are nonetheless as competent as any other persons to contract respecting their earnings and property rights… So long as the agreement does not rest upon illicit meretricious consideration, the parties may order their economic affairs as they choose, and no policy precludes the courts from enforcing such contracts.” (NYTimes.com)

Although the plaintiff’s complaint alleged only an express contract, the Supreme Court went on to address the issue of “the property rights of a non-marital partner in the absence of an express contract.” Here, the Supreme Court made new law. Prior California cases had refused to enforce implied contracts between non-marital cohabitants. The Court overruled that line of cases, holding that in the “absence of an express agreement the plaintiff might be able to establish an implied contract or implied partnership, and might be able to invoke such remedies as constructive trust, resulting trust, and quantum meruit.” (NYTimes.com)

The problem for Triola, and many since, is that it can be very hard to prove the terms of an oral agreement.  After winning her appeal, Triola’s case against Marvin was returned to the trial court for rehearing on Triola’s claims.  The trial result was again in Marvin’s favor.

For this reason, it’s important to put promises into writing and couples who live together without getting married or entering into a domestic partnership should be forewarned.  Many of these troublesome issues can be resolved with a written “cohabitation agreement” to help protect your interests if the relationship dissolves.  As the two of you contribute toward your financial future together, a cohabitation agreement can set out fair arrangements regarding property ownership and division, and any support, similar to how a prenuptial agreement works.  If you lived together before getting married, then both a civil palimony lawsuit and family court divorce (dissolution) action may be necessary, but note that palimony suits must be brought within a certain time period after the agreement is broken to prevent your claim from being barred (Nolo.com).

If you need more information, please schedule a free 1-hour consultation at The Law Office of Matthew J. Rudy.

Ways To Protect Your Credit During A Divorce

Divorce can cause a range of emotions from anger to sadness to relief. Divorces can be both mentally draining and time consuming.  As such, sometimes finances can be an afterthought. As things get hectic, it is a mistake to forget about your credit situation. Before we start going through the tips, here’s a bonus tip: pull your credit report.  You will be using it a lot to prepare for your divorce

Below are some ways to protect your credit during a divorce as well as a brief analysis of California Family Code Section 2040 and the automatic restraining orders that take place to help protect your finances:

Know ALL your credit and debit lines

When couples are married for many years, it is easy to forget about that random department store credit card you and your spouse opened years ago. Since you’ve pulled your credit report, go through it and review it, and make sure you understand what is on it. An individual account in your name means you may be solely responsible for the debt.  A joint account means you and your spouse will likely share responsibility for paying off any debt on that account. An authorized user means the account is held individually by one person who allows another to use the card, but who may not be responsible for the balance. Note the difference and proceed accordingly (Experian.com).

Monitor remaining joint accounts

Sometimes joint accounts cannot be transferred easily, such as a mortgage. In this case, assume your spouse agrees to continue paying the mortgage on the home you own together.  You will want to ensure this is properly documented in the divorce agreement, but in addition, you will also want to monitor those joint accounts.

Ask your lender to send you a copy of the joint account’s statement each month.  Some may do it automatically, while others may allow access to account statements and records online. Do this even if your ex has agreed to make the payments, that way you can catch any missed payments before they damage your credit (Experian.com).

Create a post-divorce budget

One of the most difficult parts of a divorce for many people is that their income typically decreases (especially if you’re moving from a dual-income household to a single-income household) and expenses increase.  Some people tend to get in over their head with expenses rapidly stripping their income, either from divorce expenses or perhaps from frivolous spending stemming from the emotional turmoil of divorce.

The best thing to do is create and track a monthly budget that includes your steady income and all expenses.  Mortgages, utilities, credit card payments, auto loan payments, property taxes, insurance, etc.  Unfortunately, you may be faced with making some hard choices if you find that your expenses exceed or come close to exceeding your income, but it is better to know ahead of time rather than accumulate a huge pile of debt that you will then be stuck with. (Divorcesupport.about.com)

CA Family Code Section 2040: What Are The Automatic Restraining Orders In California Divorces and Legal Separations?

Family Code Section 2040 sets forth what legal professionals often refer to as the “ATROS” – automatic temporary restraining orders in the Summons. At the moment that a spouse or domestic partner signs the Petition for Dissolution of Marriage or Domestic Partnership, Legal Separation, or Nullity of Marriage, they become bound by the contents of the Summons which must accompany the initial filing. Page 2 of the Summons has the exact language of Family Code section 2040. Once the Summons is served upon the Respondent, they likewise become bound by the ATROS. Failure to comply with section 2040 can result in contempt citations or allegations for breach of fiduciary duty (legalinfo.ca.gov).

The Summons reads as follows:

“STANDARD FAMILY LAW RESTRAINING ORDERS

Starting immediately, you and your spouse or domestic partner are restrained from

1. Removing the minor child or children of the parties, if any, from the state without the prior written consent of the other party or an order of the court;

2. Cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, treats including life, health, automobile, and disability, held for the benefit of the parties and Their minor child or children;

3. Transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life, and

4. Creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court. Before revocation of a nonprobate transfer can take effect or a right of survivorship to property can be eliminated, notice of the change must be filed and served on the other party.

You must notify each other of any extraordinary proposed expenditures at least five business days prior to incurring these extraordinary expenditures and account to the court for all extraordinary expenditures made ​​after these restraining orders are effective. However, you may use community property, quasi-community property, or your own separate property to pay an attorney to help you or to pay court costs.” (courts.ca.gov)

The most important exception is the right to use the community property assets or bank account in order to hire a party’s attorney. The legislative intent is to encourage parties to be able to retain competent legal counsel for their divorce or legal separation, but fees are limited to what is reasonable and a spouse who does so is required to account to the other for how the money was spent.

Another provision of section 2040 that is difficult to enforce and sometimes gets abused is the end of “3” which permits parties to dispose of assets “in the usual course of business or for the necessities of life.” The wording is very vague and thus difficult to measure. Since governments cannot and should not micro-manage the daily lives of people in divorce, there is an element of voluntary compliance with the ATROS. We hope that spouses and domestic partners will behave honorably, but many don’t.

Finally, there are important consequences to the disposition of jointly titled, right of survivorship interests in real estate or personal property that are important to recognize: If property is held in joint tenancy and one party dies before marital status has terminated (i.e., the parties become “unmarried”), the other spouse inherits the entire property.(divorcesupport.com)

Credit and finances can be very complicated. It is always best to consult a specialist before making any decisions. For more information, please contact The Law Office of Matthew J. Rudy for a free 1-hour consultation.

 

Proposition 8 Ruling Explained

In late June, the Supreme Court of the United States (SCOTUS) ruled that the Defense of Marriage Act (DOMA) was unconstitutional, and that the benefits available to legally married heterosexual couples should be available to legally married gay couples. The 1996 federal law had defined the institution of marriage as a union between a man and a woman, thus denying federal benefits for gay couples whose marriages were recognized at the state level—like joint tax returns, Social Security, health insurance, pension protection, benefits for military couples, and immigration protections for couples from different countries.

The court invalidated DOMA in a 5-4 ruling. Justice Anthony Kennedy, who delivered the decisive vote along with the court’s four liberal justices, wrote the majority opinion stating that DOMA “violates basic due process and equal protection principles applicable to the Federal Government.”

The Prop 8 ruling, on the other hand, is less decisive and more complicated. Proposition 8 was a 2008 California ballot initiative that prohibited same-sex marriage by amending the state’s constitution. The case was dismissed on the basis that the petitioners lacked standing.  Since the California courts have already invalidated Prop 8, the outside lawyers supporting Proposition 8 have no standing to defend it. This means the court has effectively validated the rulings of lower courts that have rejected Prop 8 (sfgate.com).

In this blog, we will answer some questions to further explain this ruling.

Is gay marriage legal in the state of California now?

SCOTUS’s decision itself does not legalize gay marriage, or speak to the validity of gay marriage bans, but the lower court decision overturning Prop 8 still stands. Same sex marriages have resumed in California after the Ninth Circuit Court of Appeals took the unusual step of lifting a stay during the 25 day period before SCOTUS’s decision became final.

Can legally married gay couples file for income tax deductions and receive the same tax, health and retirement benefits as different sex couples?

Yes, the ruling against DOMA should allow legally married gay couples (or, in some cases, a surviving spouse in a same-sex marriage) to receive the same benefits and tax breaks available to legally married heterosexual couples (nbcpolitics.nbcnews.com).

What about an appeal?

On July 15, the California Supreme Court refused to stop gays from marrying while it considers a legal bid to revive Proposition 8. The court rejected a request by ProtectMarriage, the sponsors of the 2008 ballot measure, to stop the issuing of marriage licenses to same-sex couples while considering the group’s contention that a federal judge’s injunction against the marriage ban did not apply statewide. The court is not expected to rule on the group’s petition until August, at the earliest.

The U.S. Supreme Court decided last month that ProtectMarriage lacked the legal right to appeal a 2010 injunction against Proposition 8 issued by a federal trial judge in San Francisco. Gov. Jerry Brown said the injunction compelled him to order county clerks to issue marriage licenses to same-sex couples.

But ProtectMarriage insists the injunction applies only to two counties at most and that Brown erred when he ordered clerks to stop enforcing the marriage ban.

State Attorney General Kamala D. Harris has contended that ProtectMarriage is asking the state court to interfere with a federal court order in violation of the constitution (sfgate.com).

If you would like more information about same-sex marriage and the rapidly changing associated rights and responsibilities, please contact The Law Office of Matthew J. Rudy for a free 1-hour consultation today.

Signs Your Marriage Is In Trouble

One of the most frequently cited family law statistics is that 50% of marriages end in divorce.  No one gets married with the expectation of getting divorced. However, changes, including in the nature of the relationship between spouses, are inevitable and one or both spouses may ultimately come to the conclusion that a divorce is in the best interests of all involved. Below are some common signs of a failing marriage:

1. Decision making has become a dictatorship. There used to be a time when you and your partner would discuss the upcoming weekend plans, what to eat for dinner, the handling of work-related issues, etc. Now, you are making decisions without consideration from the other.

2. You are constantly keeping score. If one partner does something, then the other keeps track and puts in on a scorecard. You are actively keeping mental notes on how much you are contributing versus how much your partner is or is not.

3. You no longer have the same interests. When meaningful conversations become extremely rare and silence is more common, it is time to re-evaluate the relationship.

4. You can do no right. Everything that you do results in a fight with your partner. Larger relationship issues turn into negative criticism of day-to-day tasks.

4. A spouse looking for distractions from the problems. If the television is on constantly, or you both sit with your face buried in a book, or you always have something else that needs to be done there may be a problem. It is common for individuals to find such distractions to avoid dealing with a troubled marriage.

6. Arguing over the same subject repeatedly. If your arguments become routine with all the same issues and no resolution, then your marriage is either standing still or dying fast. You may need the assistance of a professional counselor to help find solutions to the problems that don’t seem to go away.

7. Intimacy is a thing of the past. A considerable decline in physical affection is one of the most recognized symptoms of a failing relationship. Intimacy is an act that allows spouses to bond. If your partner is showing no or very little interest in intimacy with you then they are showing little concern for their emotional bond with you.

8. You pull out your needle and start jabbing. Anyone in a long-term relationship knows their partner well enough to have a keen awareness of their hot buttons. In days past, you accidentally pressed them, learned from your mistakes and vowed not to repeat them. Today, you press them with full awareness, and you like it. (Huffington Post & Divorcesupport.com)

If you feel that your marriage is coming to an end and would like to speak with a Family Law attorney, please contact The Law Office of Matthew J. Rudy for a free 1-hour consultation.

Divorce and Bankruptcy

Financial problems are often a source of stress in marriages. Sometimes this stress can lead to divorce proceedings. A bankruptcy filing can be the most severe form of financial stress. It is not unusual for a bankruptcy filing and a divorce proceeding to occur at nearly the same time. There are ways for the parties to a simultaneous or near-simultaneous bankruptcy and divorce proceeding to ease this process.

Which should happen first, divorce or bankruptcy?

Every situation has its own wrinkle. However, if three conditions exist, filing a joint bankruptcy action first may very well be the quickest, most cost effective option for both parties and for both the bankruptcy and divorce cases. These conditions are:

1. Both parties know that they will eventually make use of bankruptcy.
2. There are very few assets that would be exempt under bankruptcy laws, and thus not that much property to be divided in the divorce.
3. The parties are not so hostile that they cannot cooperate in the bankruptcy proceeding. (Legalzoom.com)

What if one spouse will not agree to a joint bankruptcy?

One spouse may file bankruptcy on his or her own. That spouse would be able to discharge the debt. Because both spouses are responsible for the debt incurred during marriage, the creditors would then simply pursue collection for the entire debt against the non-bankrupt spouse. A divorce court may not order the spouse who has discharged the debt to pay it, and a divorce court cannot keep creditors from pursuing the non-bankrupt spouse, since the divorce court has no say over the contract between the creditor and the debtor. The divorce court only has the ability to assign debts between the two spouses. In order to prevent this situation, the non-filing spouse may wish to join in the bankruptcy case (Californiabankruptcy.com).

What happens if one spouse starts bankruptcy in the middle of divorce?

If a bankruptcy is filed while a divorce action is pending, the financial matters of the divorce action would be halted under the “automatic stay” provision in the bankruptcy code. This means that the divorce may not go forward until the bankruptcy case is over without permission from the bankruptcy court. Non-financial matters, such as child custody, needing to be resolved would not be halted (Legalzoom.com).

What if one spouse files for bankruptcy after the divorce is final?

Sometimes one spouse will take bankruptcy after the divorce. However, recent changes in the bankruptcy code keep the spouse from expunging any debts in bankruptcy that are “in the nature of support.” This makes debts such as child support or spousal support arrears non-dischargeable (Californiabankruptcy.com)

Divorce or bankruptcy individually can be very complicated proceedings. When dealing with both issues at the same time it is particularly important to work with a knowledgeable local family law attorney. For a free 1-Hour Consultation with a San Jose family law attorney, please contact The Law Office of Matthew J. Rudy.

What are Preliminary Financial Disclosures?

A required step in the divorce process is preparing and exchanging preliminary financial disclosures. A judge will not grant a divorce without the completion of this step. Not filling out the forms or filling financial disclosures out incorrectly can cause problems for both parties.

California is a community property state, which means that with few exceptions everything acquired during marriage is community property. Community property includes asset, liabilities and pensions. Whenever a person wants to get divorced in California, the court requires that all issues that were created during the marital period also be resolved at time of divorce. This includes dividing the assets and the debts, resolving custody and support issues. California Family Code section 2104 requires the preparation of financial disclosures known as Preliminary Declarations of Disclosure detailing all assets comprising the marital estate, both separate property assets and community property assets.

Both parties in a California divorce are required to disclose detailed, accurate information to the other about their respective incomes, expenses, property (both marital and separate property) and all debts and obligations. There mutual disclosures are called the parties’ “Preliminary Declaration of Disclosure”. The formal disclosures are signed under penalty of perjury. A Final Declaration of Disclosure can be completed at approximately the time of trial or settlement in the case unless the parties mutually agree in writing to waive such final disclosure.

These Declarations of Disclosure consist of special forms required by the court, and except for proof that the parties served each other with such forms, these forms are otherwise not filed with the court. The 4 forms that generally comprise the Declaration of Disclosure are:

1. Declaration of Disclosure (Form FL-140)

2. Income and Expense Declaration (Form FL-150)

3. Schedule of Assets and Debts (Form FL-142)

4. Declaration of Service of Declaration of Disclosure (Form FL-141)

The purpose of such financial disclosures is to make settlement negotiations easier to proceed because of the generally clear picture of the parties’ financial situation given by such formal disclosure. Moreover, it protects the parties in the event that either spouse failed to disclose all assets (scscourt.org).

It is very important to fill out the preliminary financial disclosures because it helps the parties and, if necessary, the court to identify the entire community estate. While it may, at first glance, appear easy to identify the entire community estate, the problem is that many people who fill out these forms on their own do not understand the definition of community property.

Filling out the forms incorrectly can cause serious consequences to one or both parties. It is imperative to know the difference between community and separate property as it can greatly affect the settlement. One of the primary issues in a divorce is how to split up community property assets. There is a basic presumption that all assets acquired during marriage are community in nature. This means both the husband and wife equally own all money earned by either one of them from the beginning of the marriage until the date of separation. In addition, all property acquired during the marriage with “community” money is owned equally by both the wife and husband, regardless of who purchased it. Like community assets, all debts contracted from the beginning of the marriage until the date of separation are community debts. Therefore, each spouse is equally liable for debts. In most cases, this includes unpaid balances on credit cards, home mortgages and car loan balances. It is important to close out all credit cards, bank accounts, and joint accounts as soon as possible after a divorce has been decided. It is not enough to remove names from the account (findlaw.com).

Separate property assets are those acquired by either spouse prior to marriage, during marriage by inheritance gift or devise or after separation. (Family Code section 770). Separate property is generally awarded to the party who owns the asset although its value may be considered for issues such as support or attorney’s fees.

Separate property can also include anything that one spouse gives up to the other spouse in writing. In certain cases, separate property can become mixed with community property. When this occurs, it is important be able to trace the payments and show where the separate and community money came from. For example, a husband may have contributed the down payment for a house either prior to marriage or with his separate property after the date of the marriage, and then paid off the mortgage with community property. In this case, the husband would have a claim either to be reimbursed for his down payment or to a pro rata interest in the house depending on whether the house was purchased before or after marriage and how title was held.

Similar to separate property, separate debts belong to one spouse. All debts incurred before marriage are separate debts. For example, educational loans or job training loans incurred before marriage would be separate debts.

Another consequence of not disclosing all assets debts and liabilities is possible court punishment to the guilty party. The Court has a variety of remedies to punish a party from omitting an asset on their disclosures, including sanctions and the award of the entire asset to the other spouse. Also, committing perjury can result in jail time (scscourt.org).

Although these forms seem straightforward and easy to fill out, it is always best to have a Family Law Attorney review the documents. For a free 1-hour consultation, please contact The Law Office of Matthew J. Rudy.

Domestic Partnership in California

Same-sex marriage has become a much publicized issue in recent years. Pending the United States Supreme Court decision regarding the status of same-sex marriage in California same-sex couples in California may register as domestic partners with all of the same rights, at the state level, as spouses.

A California domestic partnership is “a legal relationship available to same-sex couples, and to certain opposite-sex couples in which at least one party is at least 18 years of age.” It affords the couple “the same rights, protections, and benefits, and… the same responsibilities, obligations, and duties under law…” as married spouses (legalinfo.ca.gov).

Similarities to Marriages

Currently, California affords domestic partnerships the same rights and responsibilities as marriages under state law. Among these:

• Making health care decisions for each other in certain circumstances
• Hospital and jail visitation rights that were previously reserved for family members related by blood, adoption or marriage.
• Access to family health insurance plans (Cal. Ins. Code §10121.7)
• Spousal insurance policies (auto, life, homeowners etc.), this applies to all forms of insurance through the California Insurance Equality Act (Cal. Ins. Code §381.5)
• Sick care and similar family leave
• Step-parent adoption procedures
• Presumption that both members of the partnership are the parents of a child born into the partnership
• Suing for wrongful death of a domestic partner
• Rights involving wills, intestate succession, conservatorships and trusts
• The same property tax provisions otherwise available only to married couples (Cal. R&T Code §62p)
• Access to some survivor pension benefits
• Supervision of the Superior Court of California over dissolution and nullity proceedings
• The obligation to file state tax returns as a married couple (260k) commencing with the 2007 tax year (Cal R&T Code §18521d)
• The right for either partner to take the other partner’s surname after registration
• Community property rights and responsibilities previously only available to married spouses
• The right to request partner support (alimony) upon dissolution of the partnership (divorce)
• The same parental rights and responsibilities granted to and imposed upon spouses in a marriage (nclrights.org)

How to File for Domestic Partnership

Same-sex couples in California may want to register as domestic partners prior to a determination of whether or not they will be allowed to marry under California law. By registering as domestic partners, couples are entitled to all the rights and protections of state law. To qualify as domestic partners, couples must meet certain conditions. To register a domestic partnership in California, follow these guidelines.

1. Determine whether you and your partner meet the basic requirements to qualify for domestic-partnership status. Certain conditions must be met before a couple can formally apply for California domestic partnership with the Secretary of State’ office. Requirements include:

• Partners must be the same sex, or at least 1 person in an opposite-sex domestic partnership must be at least 62 years old at the time of filing.
• Both people must be at least 18 years old.
• The partners must have a common residence. The primary residence doesn’t have to be jointly owned.
• Neither partner may be married to or in a concurrent domestic partnership with another person.
• Partners cannot be related by blood.
• Both people must be mentally capable of consenting to the partnership.

2. Complete the application process as set forth by the California Secretary of State’s office.

3. Download the Declaration of Domestic Partnership form (NP/SF DP-1) from the Secretary of State’s website at http://www.sos.ca.gov.

4. Print and fill out the application. Incomplete forms will delay approval of your status.

5. Have both partners’ signatures notarized.

6. Send the notarized application to the Secretary of State’s office by mail with payment for the appropriate fee. Applications also can be delivered in person at the main office in Sacramento or the regional branch in Los Angeles.

• After you have filed your application, you will receive a Certificate of Registration of Domestic Partnership and an important brochure that outlines your rights with a domestic partnership.

7. Pay the fees associated with your particular form of domestic partnership.

Tips

• The additional fees for same-sex partnership applications go toward training and support of local organizations that educate the public on domestic-violence issues affecting the gay, lesbian, bisexual and transgender communities.
• Understand the scope of domestic-partnership laws. Laws that protect traditional couples also apply to domestic partners, including survivor’s rights. Like married heterosexual couples, domestic partnerships are dissolved in the family court. To end a California domestic partnership, a couple must complete form NP/SF DP-2, Notice of Termination of Domestic Partnership. If all the requirements of the California Family Code are met, the office can terminate the partnership 6 months after the application is filed. Otherwise, issues surrounding the dissolution of the partnership must be resolved in California Superior Court.
• Hand-delivered applications are subject to an additional processing fee. Both offices accept payments by check, money order or credit card. The Sacramento office also accepts cash. The Los Angeles branch does not.
• In the event of the passage of significant legislation affecting domestic partnership, the Secretary of State’s office will contact all people on the Domestic Partnership Registry and explain the impact of the new law. (http://www.sos.ca.gov/)

If you have any questions about Domestic Partnerships, please contact The Law Office of Matthew J. Rudy for a free 1-Hour Consultation.