Category Archives: Family Law

Safeguarding assets during divorce is essential. Discover strategies like putting in place prenuptial agreements, identifying whether property constitutes marital vs. separate assets, and utilizing trusts for asset protection.

• In divorce proceedings, property is classified as either marital or separate.
• Community property states evenly split marital assets; equitable distribution states consider various factors.
• Prenuptial agreements may outline asset division and terms of spousal support in the event of a divorce.
• Listing the couple’s joint assets and consulting a divorce lawyer are crucial steps for protecting one’s assets in the dissolution of a marriage.
• Be cautious about withdrawing or hiding joint account funds. Doing so can complicate divorce proceedings and may even violate divorce laws in some states. 
• Retirement assets, like other assets, may require division. Following the divorce, the estranged individuals should update their retirement account beneficiaries. 
• Trusts, specifically irrevocable trusts, can protect assets for beneficiaries.
• Consult a family law attorney for expert guidance in divorce proceedings.

Aspect	Importance
Property classification in divorce	Marital vs. separate property
Community property vs. equitable distribution	Asset division laws by state
Prenuptial agreements	Defining asset division and support terms
Protecting joint assets	Listing, managing, and protecting shared assets
Retirement assets	Potential division and beneficiary updates
Trusts for asset protection	Irrevocable trusts for safeguarding assets
Legal consultation	Family law attorney for expert guidance in divorce

What’s the difference between community property and equitable distribution in divorce?

Community property states evenly divide marital assets, while equitable distribution states consider various factors to divide assets fairly based on circumstances.

How can I protect assets in divorce without a prenuptial agreement?

Safeguard assets by listing joint assets, consulting a divorce lawyer, and being cautious with account withdrawals are steps to take when divorcing without a prenuptial agreement. Consider irrevocable trusts for added protection.

How Assets Are Treated in Divorce

A big part of divorce proceedings is determining which spouse receives what property and assets.  

To safeguard assets from a divorce, the spouses splitting up must first figure out who is entitled to what and what state laws govern property allocation. When determining who gets what, divorce courts consider two classifications of property: separate property and marital property.

Any property that the divorcing spouses acquired after marriage is considered marital property. That might, for instance, involve items like:

• The contents of bank accounts
• Vacation homes or rental properties
• Vehicles
• College savings accounts, like 529 plans, established on behalf of their children
• Retirement accounts, including 401k plans And IRAs
• Taxable investment accounts
• A property that serves as the family’s primary residence
• Business assets
• Pensions or annuities
• Antiques or collectibles

Property that either spouse owned before marriage is considered separate property. 

The court could also recognize certain assets acquired after marriage as separate property, depending on state rules. 

For instance, if one spouse received a $1 million inheritance from a deceased relative during the course of the marriage, the court may treat those assets as separate property. 

Community Property vs. Equitable Distribution

State law determines how assets should be shared between separating couples. Each state in the U.S. follows either equitable distribution or community property laws.

In a state that follows equitable distribution law, as most states do, property must be divided fairly in light of the circumstances. A court may consider the following factors when allocating assets: 

• If one or both spouses work
• Each spouse’s income
• Anticipated financial responsibilities of each spouse following the divorce
• The circumstances underlying the marriage’s dissolution

States that follow community property law treat marital property, or property acquired during the marriage, as community property. They generally subject marital property to a 50-50 split between the spouses. However, each spouse retains their own separate property. 

Community property states include: 

• Arizona 
• California 
• Idaho 
• Louisiana 
• Nevada 
• New Mexico 
• Texas 
• Washington 
• Wisconsin

How to Protect Assets From Divorce

Being proactive before a marriage even starts can make dividing assets in the event of a divorce easier. When spouses enter the marriage with a desire to safeguard their assets, a prenuptial agreement may be the best option.

This agreement outlines details like which assets each spouse is entitled to in the event of a divorce and the terms of possible spousal support or child support responsibilities. 

As the name suggests, a prenuptial agreement is established before the marriage begins. If couples don’t already have such an agreement, it’s too late to establish it once they decide to divorce (although it is possible to write a postnuptial agreement during the marriage). 

Divorcing couples who do not have a prenuptial agreement can still safeguard their assets, but they must do so through other strategies. 

Firstly, couples seeking to end their marriage should make a list of the assets they jointly hold. This list should include where bank accounts, retirement accounts, and investment accounts are kept, who may access them, and their current balances. 

If one or both spouses don’t have their own individual bank accounts, they should consider creating one solely in their name. 

It may be tempting to withdraw money out of joint bank accounts, especially for individuals who fear that their soon-to-be ex-spouse will spend all of the couple’s shared finances. However, withdrawing money from such accounts, liquidating assets, or retitling them in one spouse’s name might complicate the divorce process and break state divorce laws. The same is true of any attempt to conceal marital assets to avoid sharing them with the spouse. 

Instead of withdrawing these assets and risking further divorce complications or legal trouble, an individual pursuing a divorce should speak with an experienced divorce lawyer. Suppose the attorney recommends that the spouses remove money from their joint accounts to finance their new separate accounts. In that case, both parties involved in the divorce should speak openly about these plans and ensure that all such transactions from joint bank accounts are recorded. 

How Divorce Affects Retirement Accounts

Why are retirement accounts included in the list of what will potentially be deemed marital property, even if the couple is still working and only one spouse is named on the account? Often, retirement assets accumulated during the marriage are considered the couple’s marital property. 

Suppose one spouse had already amassed some retirement savings before the marriage. In that case, their soon-to-be ex-spouse might be entitled to the portion of retirement savings accumulated during the marriage but not the money that predated the marriage. 

If retirement assets are deemed marital property, they could be divided according to the divorce settlement terms. The individual’s former spouse whose name is on the account may receive half (or whatever percentage stipulated in the divorce settlement terms) of the IRA or 401(k) assets amassed during the marriage. 

Dividing these assets may be done in different ways. For example, if both former spouses are entitled to pensions, they may split their annuity payments when they eventually retire. Otherwise, one spouse may “buy out” the other spouse’s portion of the pension by making a lump sum payment that’s based on the present value. 

However the divorcing couple decides to split retirement assets that are deemed marital property, both parties should revisit their retirement accounts after the divorce is final. It’s important to update the beneficiaries on one’s retirement accounts going forward to avoid the money going to the former spouse in the future. 

Consider a Trust for Divorce Planning

Another option that may be available to safeguard assets in the event of a divorce is a legal arrangement known as a trust. Trusts are used to hold assets under the trustee’s management to benefit one or more designated beneficiaries. 

When considering trusts for use to protect assets in a divorce, one precious tool is a type of trust known as an irrevocable trust. An irrevocable trust allows for the permanent transfer of assets to a trustee’s management. The trust will then pay out money in disbursements as outlined in the terms of the trust. However, since transferring these assets into an irrevocable trust is permanent, the individual funding the trust must be certain that they won’t eventually need any of these assets. 

Trusts can’t be used to hide marital assets from one’s soon-to-be ex-spouse, which could result in severe penalties. There are, however, valid reasons divorcing spouses might put funds in a trust. For example, trusts can be an excellent tool for safeguarding assets intended for the children if the person who sets up the trust fears their ex-spouse might spend that money irresponsibly or otherwise fail to use it as intended. 

When parents divorce, one spouse might choose to place assets obtained before the marriage (but not marital assets) in a type of irrevocable trust called a domestic asset protection trust (DAPT) that provides for the children. The trustee would act on behalf of the children and pay out assets in the form of distributions to the children according to the terms of the trust. 

Whether or not establishing an irrevocable trust makes sense for an individual’s situation depends on their unique circumstances and state law. An individual interested in exploring trusts and other options for protecting their assets in a divorce should speak with a financial advisor or an estate planning lawyer.

Consult With a Family Law Attorney

A divorce is a legal matter, not just a financial one. Getting professional legal advice is essential in divorce to navigate complex asset divisions, protect each party’s interests, and ensure a fair settlement. A family law attorney in Louisiana can provide expert guidance that helps individuals seeking a divorce protect their financial future.

In Summary

Divorce brings about a number of challenges in protecting one’s financial assets. Understanding property classification, state laws, prenuptial agreements, and trusts can help couples who are preparing to divorce safeguard their individual assets and divide marital property as smoothly as possible. 

An experienced family law attorney can provide comprehensive support, guiding clients through divorce proceedings and helping them understand the best asset protection strategies available to them under the law.

Contact Us at Stephenson, Chávarri & Dawson

For expert legal guidance in divorce matters, contact Stephenson, Chávarri & Dawson. Our experienced family law attorneys can provide tailored advice, protect your assets, and guide you through divorce proceedings.

Elon Musk has introduced social media posts by Grimes into their custody dispute, highlighting a series of her tweets as evidence in court records. The dispute centers on whether Texas or California should have jurisdiction over their custody case.

Musk’s recent legal filing claims Grimes’ posts on social media indicate she resides in Texas, citing seven of her tweets between February 2021 and October 2023. This claim counters Grimes’ assertion in her California lawsuit that she moved to California with the children at the end of 2022. Musk focuses on proving Texas as the rightful jurisdiction, noting Grimes’ posts about living in Austin and discussing Texas issues like housing.

A family law attorney, Christopher Melcher commented these tweets significantly undermine Grimes’ credibility. In custody cases, courts often favor the state where the children have lived most recently to minimize disruption to their lives. Grimes’ posts about residing in Texas conflict with her sworn statements about living in California.

Digital footprints, the trail left by online activities, play a significant role in family law cases. With the rise of social media, email, and other digital platforms, courts increasingly consider this information as evidence. In cases like divorce or custody battles, what individuals post online can have profound implications. For instance, social media posts can reveal lifestyle choices, financial status, and personal relationships, all of which are relevant in these legal scenarios. Similarly, emails and text messages can provide context and clarity to personal interactions, helping to establish patterns of behavior. It’s important to remember digital content can be preserved and presented in court, even if it was deleted. Therefore, online behavior can become a powerful factor in family law proceedings, often providing a more complete picture of an individual’s personal life and habits.

Text Messages in Court: Their Impact on Divorce Proceedings

Text messages often play a key role in divorce proceedings, providing valuable insight into personal communications. In today’s digital age, where texting is a common form of communication, these messages can offer a window into the daily interactions and the nature of relationships between individuals. Courts frequently use text messages as evidence, especially in disputes over issues like child custody or division of assets. These messages can reveal the real-time thoughts, intentions, and actions of the parties involved, offering a more transparent view of their conduct and character. For example, texts might display a person’s spending habits or their interactions with children, which could influence decisions on financial settlements and parenting plans. However, it’s important to remember the context of these messages is often scrutinized to ensure a fair and accurate representation in the courtroom.

Social Media Evidence: Changing the Dynamics of Custody Disputes

Social media evidence significantly alters how custody disputes are handled in family law. Posts, photos, and interactions on platforms like Facebook, Instagram, and Twitter can paint a vivid picture of a parent’s lifestyle, priorities, and behavior. Courts often consider this type of evidence to assess the suitability of each parent in providing a stable, nurturing environment for their children. For instance, social media can reveal instances of irresponsible behavior, neglect, or even evidence of a supportive and positive family life. It also offers insights into the parent’s social circles and activities, which might affect their parenting. Social media content can be interpreted in various ways. Judges and legal professionals examine these digital traces carefully to ensure they accurately reflect a person’s character and parenting ability, ultimately influencing decisions regarding child custody.

Emails and Family Law: Understanding Their Legal Weight

Emails hold significant weight in family law cases, serving as a form of digital evidence that can influence the outcome of legal disputes. In matters such as divorce, child custody, or spousal support, emails can clearly record conversations and agreements between parties. These digital correspondences can reveal intentions, agreements, or even crucial conflicts to a case. For example, emails exchanged between spouses discussing financial matters or parenting plans can be pivotal in court decisions. They offer a timestamped, verifiable record of communication, which is harder to dispute than verbal agreements. It is important, however, to consider the context and authenticity of these emails, as they are subject to scrutiny in legal proceedings. Judges and legal professionals carefully examine these emails, ensuring they are relevant and accurately represent the situation.

Online Calendars and Scheduling: Evidence in Parenting Time Conflicts

Online calendars and scheduling tools are becoming increasingly relevant in resolving parenting time conflicts in family law. These digital platforms, often used for organizing daily activities and appointments, can provide a clear, time-stamped record of a parent’s involvement and availability for their children. In cases where parenting time or custody is disputed, these calendars can be crucial in demonstrating a parent’s commitment to and involvement in their child’s life. They show patterns of consistency or inconsistency in taking care of the child, attending important events, or adhering to agreed-upon schedules. For instance, a parent’s regular attendance at school events or medical appointments, as documented in an online calendar, can support their claim of active engagement in the child’s life. However, it’s important to recognize that these digital records must be assessed for their accuracy and context. In family law, such evidence can offer insights into the practical aspects of parenting, influencing decisions about custody and visitation rights.

Digital Evidence in Domestic Violence Cases: A New Frontier

Digital evidence is increasingly becoming a key factor in domestic violence cases, opening new avenues for understanding and addressing these serious issues. Text messages, emails, social media posts, and even location data from digital devices can provide crucial insights into the nature of relationships and the occurrences of abuse. For example, threatening or harassing messages can be used to demonstrate patterns of abusive behavior. Similarly, digital evidence can also include recordings or photographs that capture instances of violence or its aftermath. This type of evidence can be particularly telling, as it often provides real-time documentation of events, emotions, and interactions are otherwise difficult to convey. However, handling such sensitive digital evidence with care is important, ensuring it is collected and presented in a manner that respects privacy and legal standards. In the realm of domestic violence, these digital trails can offer powerful testimony, shedding light on circumstances might otherwise remain hidden.

Call 504-523-6496 or contact our expert team for a free consultation. 

In Louisiana, paternity laws significantly define the legal relationship between a father and his child. These laws ensure a child’s rightful inheritance, custody, and support rights are recognized and protected. Paternity establishment is necessary for a father to have legal rights and responsibilities regarding his child. Louisiana law provides different methods for establishing paternity. When parents are married at the time of a child’s birth, the husband is automatically presumed to be the father. For unmarried parents, paternity can be established voluntarily, through both parents signing an acknowledgment form, or through a court procedure, often involving genetic testing. Understanding these laws helps secure the child’s future, including access to family medical history and financial support. For parents, establishing paternity is important to affirm their legal rights and duties toward their child.

Key Reasons to Establish Paternity: Insights for Louisiana Families

Establishing paternity is a significant step for families in Louisiana. It offers numerous benefits for both the child and the parents. For children, knowing their father’s identity provides emotional and social benefits. It fosters a sense of belonging and identity, connecting them with both sides of their family tree. Legally, it opens the door to rights such as inheritance, social security, and veterans’ benefits. It also ensures access to important medical history from the father’s side, which can be vital for healthcare decisions. For fathers, establishing paternity allows them to exercise their legal rights in child custody and visitation matters. It also enables them to play an active role in their child’s life, contributing to their upbringing and welfare. For mothers, it facilitates the process of seeking child support, ensuring financial assistance for the child’s needs. Overall, establishing paternity solidifies the legal and emotional bonds within a family.

Navigating the Legal Process: Step-by-Step Guide to Establishing Paternity in Louisiana

Establishing paternity in Louisiana involves a clear, step-by-step legal process. When parents are unmarried, the first step is usually voluntary acknowledgment. Both parents can sign a Paternity Acknowledgment form at the hospital right after the child’s birth or later at a vital records office. If there’s disagreement or uncertainty about the father’s identity, either parent can seek a court order. This legal step often requires genetic testing to confirm paternity. Once the court receives the test results, it can issue an order establishing paternity. If the father is not available for testing, the court may consider other evidence. Once paternity is established, the father’s name can be added to the birth certificate. This process ensures legal recognition of the father-child relationship, laying the groundwork for the child’s legal rights to support, inheritance, and more. It also formalizes the father’s rights and responsibilities towards the child.

Paternity Testing in Louisiana: Methods, Accuracy, and Legal Recognition

Paternity testing in Louisiana is reliable for determining a child’s biological father. This process typically involves collecting DNA samples from the child and the alleged father, often through a simple cheek swab. The most common method, known as PCR (Polymerase Chain Reaction), analyzes specific genetic markers. The results are highly accurate, with most tests offering over 99% certainty when confirming paternity.

In legal cases, the testing process must follow specific procedures to be admissible in court. This includes a chain of custody requirement, where a neutral third party collects, handles, and processes the samples. Louisiana courts recognize the results of these tests and can be the basis for establishing paternity in legal matters. Paternity testing not only provides scientific evidence regarding the father-child relationship but also plays a crucial role in legal decisions related to child support, custody, and inheritance rights.

Legal Benefits of Paternity Establishment for Parents and Children in Louisiana

Establishing paternity brings numerous legal benefits for both parents and children in Louisiana. For children, it legally confirms their relationship with their father. This recognition is important for various reasons, such as securing inheritance rights and eligibility for benefits like social security, veterans’ benefits, and health insurance. It also provides access to family medical history, which is vital for health care decisions.

For fathers, paternity establishment grants legal rights, including the ability to seek custody or visitation. It allows them to be recognized legally as the child’s parent, enabling them to make decisions regarding the child’s welfare, education, and health.

Mothers benefit by having a legal basis to request child support, ensuring financial contribution from both parents for the child’s upbringing.

Challenging Paternity: Legal Options and Procedures in Louisiana

In Louisiana, challenging paternity is a process available to individuals who question the established father-child relationship. This usually occurs when new information suggests the person recognized as the father may not be the biological parent. The process begins with filing a petition in a court, stating the reasons for challenging paternity. Genetic testing is often a key part of this process, providing scientific evidence about the biological relationship between the alleged father and the child.

If the test results indicate the recognized father is not the biological parent, the court may nullify the previous paternity acknowledgment or judgment. This decision can have significant implications, including altering child custody arrangements and child support obligations.

Individuals involved in challenging paternity need to understand specific laws and deadlines that govern the process. The timing of the challenge, particularly if paternity was previously acknowledged, can be a critical factor in the case.

Paternity and Inheritance Rights: Understanding Louisiana’s Legal Framework

In Louisiana, paternity is pivotal in determining a child’s inheritance rights. When paternity is legally established, a child gains the right to inherit from their father, just as any child born within a marriage would. This includes not only personal assets but also rights to succession and property. These inheritance rights are particularly significant in cases where a father passes away without a will, as Louisiana’s laws on intestate succession come into play.

For fathers, establishing paternity ensures their children are rightfully recognized as heirs. This legal acknowledgment is vital for the child’s financial security and can impact their entitlement to various benefits, including social security and veterans’ benefits.

Louisiana’s legal framework aims to protect children’s rights, ensuring they receive the support and inheritance they are entitled to from both parents. Understanding how paternity affects inheritance rights is important for families planning their estate and securing their children’s future.

Call 504-523-6496 or contact our expert team for a free consultation. 

Parental alienation has gained attention in recent years, especially in the context of custody battles. It refers to a situation where one parent deliberately manipulates a child to turn them against the other parent. Often, this manipulation is subtle, making it difficult to detect and address. Parental alienation can have long-lasting emotional and psychological effects on a child, complicating an already tense family dynamic. Understanding the signs, impact, and legal remedies is important for parents who suspect they are victims of such manipulation.

Identifying Red Flags: Subtle Indicators of Parental Alienation

Detecting parental alienation often involves picking up on subtle cues which may not be immediately obvious. One parent might constantly belittle the other in front of the child or make disparaging remarks about them. In some cases, the alienating parent may go as far as to interfere with visitation schedules or withhold important information about the child’s life. Another sign could be a sudden change in the child’s behavior or attitude towards the targeted parent. For example, a child who was once close to both parents might start to withdraw from one, refusing to spend time with them or even making negative comments about them.

Emotional Impact: How Parental Alienation Affects Children

Parental alienation doesn’t just strain the relationship between parents; it also has a significant emotional toll on the children involved. When a child is manipulated to distance themselves from one parent, feelings of confusion, guilt, and sadness often follow. Over time, these emotional burdens can manifest in various ways, such as poor academic performance, behavioral issues, or even depression. The child may also develop a skewed perception of relationships, making it difficult for them to form healthy bonds in the future. A cycle of emotional harm going well into adulthood, affecting not just the child but also their future relationships and family dynamics.

Gathering Evidence: Documenting Instances of Alienation

Collecting evidence is a key step in addressing parental alienation. One common method is to maintain a detailed journal logging instances of alienating behavior. In these entries, parents can note the date, time, and specifics of each incident, such as canceled visits, derogatory comments made in front of the child, or any attempts to interfere with communication between the child and the targeted parent. Text messages, emails, and other written correspondence can also serve as valuable evidence. In some cases, testimonials from neutral third parties, like teachers or family friends, may be helpful. Audio or video recordings can be powerful, but it’s important to be aware of state laws regarding consent for recording conversations. By systematically gathering evidence, parents can build a stronger case to demonstrate the presence and impact of parental alienation.

Expert Opinions: Role of Psychologists and Child Specialists

In cases of suspected parental alienation, the insights of psychologists and child specialists can be invaluable. These professionals are trained to assess the emotional and psychological well-being of children and can provide an objective evaluation of the family dynamics. Through interviews, observations, and psychological testing, they can identify signs of alienation and its impact on the child. Their findings often carry weight in court proceedings, serving as an impartial voice to focus on the child’s best interests. Moreover, these experts can offer coping strategies for both the child and parents, helping to mitigate the emotional toll of alienation. Involving psychologists and child specialists can add a layer of expertise often needed to fully understand and address the complexities of parental alienation.

Courtroom Strategies: How to Present a Strong Case

When it comes to addressing parental alienation in a legal setting, presentation matters. A well-organized case can make a significant difference in how the issue is perceived and ultimately resolved. First, it’s important to have a clear timeline of events, supported by the evidence gathered. This timeline can help illustrate a pattern of alienating behavior. Second, any available expert opinions, such as those from psychologists or child specialists, should be included to provide an objective assessment of the situation. Lastly, witnesses who can attest to the alienating behavior can also be beneficial. These could be family friends, teachers, or other individuals who have observed the family dynamics. 

Remedies and Solutions: Legal Avenues for Combating Alienation

When parental alienation is identified, there are several legal avenues available to address it. One option is to request a modification of the existing custody arrangement, arguing the alienating behavior is detrimental to the child’s well-being. Courts may also order family therapy or counseling as a way to repair the strained relationships. In extreme cases, a change in primary custody could be considered if one parent is found to be consistently engaging in alienating behavior. Some jurisdictions even recognize parental alienation as a form of emotional abuse, which can have legal repercussions for the offending parent. It’s important to be aware of the various options and how they align with the specific circumstances at hand.

Co-Parenting After Alienation: Rebuilding Trust and Communication

After addressing parental alienation, the next challenge often involves rebuilding trust and communication between parents and the affected child. Co-parenting in such a situation can be difficult but is necessary for the child’s emotional well-being. Open dialogue is key; parents should aim for transparent conversations about schedules, parenting styles, and the child’s needs. Technology can assist in this, with various apps designed to help manage co-parenting responsibilities. Family therapy can also offer a neutral space for everyone to express their feelings and concerns. It’s a long process and setbacks are to be expected, but the goal is to create a stable, loving environment for the child. 

A Roadmap for Navigating Parental Alienation Challenges

In the journey to address parental alienation, understanding its many facets is vital. From recognizing the subtle signs to understanding the legal framework, each step offers a way to combat this complex issue. Parents should be vigilant in gathering evidence and may consider involving experts like psychologists for a more comprehensive view. Legal remedies exist to help families move toward a healthier dynamic. Co-parenting after alienation is challenging but achievable, with open communication and trust as cornerstones. While the path may be fraught with emotional and legal hurdles, it is possible to restore a sense of balance and well-being in the family.

If you are dealing with a family law case, call 504-523-6496 or contact our expert team for a free consultation. 

Going through a divorce often shakes up one’s financial situation dramatically. In many cases, divorce leads to a significant shift in income, assets, and financial responsibilities. Before diving into a new business venture, understanding how a divorce alters financial circumstances is of utmost importance. Some people may find themselves with fewer assets but more freedom to invest. Others might face new obligations like alimony or child support payments, which could influence cash flow and business investment capability.

Moreover, credit scores could take a hit after a divorce, affecting the ability to secure loans or attract investors for a startup. Joint accounts or debts settled during divorce proceedings can also leave a lasting impact. While it might be tempting to jump right into entrepreneurship, a clear grasp of one’s new financial landscape serves as a foundation for future business decisions.

Protecting Assets and Understanding Liability in a New Venture

Starting a new business after a divorce can be an exciting yet challenging endeavor. One key aspect requiring careful thought is how to protect personal assets while also understanding liability related to the new venture. Different business structures offer varying levels of asset protection and liability. For example, a sole proprietorship may seem simple but exposes personal assets to potential business debts. On the other hand, forming a limited liability company (LLC) or a corporation can offer a layer of separation between personal and business finances.

Understanding how liability works in a business setting can also help in making informed decisions. For instance, in a partnership, each partner could be responsible for the actions of the other, including financial liabilities. Therefore, selecting a trustworthy business partner becomes incredibly important.

Modifying Alimony and Child Support: Business Income Factors

After divorce, financial responsibilities like alimony and child support often become a regular part of life. Starting a new business brings about changes in income, which could affect these obligations. For instance, a business owner might experience fluctuating income due to seasonal demands or unexpected expenses, creating challenges in meeting fixed alimony or child support payments. On the other hand, a successful business can significantly increase income, which may lead to adjustments in payment amounts.

Courts typically consider various factors, such as financial stability and income potential, when determining alimony or child support. Therefore, changes in business income could prompt a review of existing financial obligations. An individual should also be aware of how business income is calculated, as reinvested profits or business-related expenses could influence the assessment. By understanding these variables, one can better prepare for financial adjustments accompanying a new business.

Business Structure Choices: Implications for Divorced Individuals

Choosing a business structure holds particular importance for individuals who have gone through a divorce. The decision can affect personal assets, tax implications, and even future relationships. For example, a sole proprietorship is easy to establish but exposes personal assets to business debts and liabilities. On the other hand, a corporation or a limited liability company (LLC) can separate personal and business finances, offering a safeguard for personal assets.

Tax implications also differ based on the business structure chosen. Sole proprietorships and partnerships have pass-through taxation, meaning profits and losses pass directly to the individual. Corporations, however, are taxed separately from their owners, which can have both advantages and disadvantages. Individuals should consider these factors carefully, especially if alimony or child support payments are part of their financial landscape. An informed choice in business structure can set a newly divorced entrepreneur on a path to success.

Taxes and Divorce: Impacts on Your Emerging Business

After a divorce, understanding how taxation can affect a new business is important. Alimony and child support payments, for instance, could have tax implications intersecting with business income. Different business structures also come with their own tax benefits and drawbacks. Sole proprietorships and partnerships involve pass-through taxation, where profits and losses directly affect personal tax obligations. Corporations, however, face double taxation—once on corporate income and again on dividends distributed to shareholders.

Business expenses also come into play. Deductible expenses, like equipment purchases or office rentals, can reduce taxable income. However, these deductions may also affect alimony and child support calculations, these often depend on net income. Being aware of such nuances can help individuals plan better, both for business growth and financial obligations from a past marriage. Balancing the two aspects involves a careful review of tax laws and their potential impact on a new venture.

How Child Custody Affects Business Travel and Obligations

Balancing business obligations with child custody arrangements can be a challenging task. Business travel often requires flexibility, while custody agreements typically have set schedules for visitation. For a business owner, frequent travel could conflict with these timetables, potentially leading to disputes over custody or visitation rights.

Planning becomes incredibly important in such situations. One might need to synchronize business commitments with custody schedules far in advance. For example, business trips could be planned during periods when the other parent has custody. Alternatively, remote work options can be explored when physical presence is not mandatory. Technology solutions like video conferencing can often serve as effective substitutes for in-person meetings.

Adjustments in child custody arrangements may also be explored, but such changes usually require mutual consent from both parents and, often, legal approval. For those juggling child custody and a burgeoning business, proactive planning can go a long way in preventing conflicts and ensuring obligations are met on all fronts.

Building Credit After Divorce: Strategies for New Business Owners

Rebuilding credit after a divorce is a significant concern for many, particularly for those looking to start a new business. Creditworthiness can be a determining factor for business loans, lines of credit, and even vendor relationships. Individuals who have undergone a divorce may find their credit scores affected, which in turn could impact the financial viability of a new venture.

Strategies for rebuilding credit include opening a separate business bank account and obtaining a business credit card to establish an independent credit history. Regular, on-time payments not only improve the credit score but also build a positive financial profile for the business.

Additionally, working with vendors who report payment history to credit bureaus can be another way to boost a credit score.

Through careful planning and disciplined financial behavior, divorced individuals can rebuild their credit, making it easier to secure necessary financing for business growth and operations.

If you are facing divorce and need to explore your options, call 504-523-6496 or contact our expert team for a free consultation. 

Divorce is never an easy process, but knowing the options available in Louisiana can help divorcing spouses choose the best way to negotiate the process of dissolving their marriage and moving on to their new lives apart.  Two common methods of resolving divorce disputes are mediation and litigation. 

Divorce mediation is a constructive alternative to traditional litigation, focusing on collaboration and open communication between both parties. In this process, a neutral third-party mediator facilitates discussions and helps the couple reach mutually agreeable decisions on critical aspects of their divorce, such as asset division, child custody, and support arrangements. Mediation encourages a healthy environment for constructive dialogue, minimizing animosity and fostering a spirit of cooperation. This method not only saves time and money, but also promotes a less adversarial approach, allowing the couple to maintain a more amicable relationship, which is especially beneficial when children are involved.

The Benefits of Divorce Mediation: Cost, Time, and Control

Mediation offers an effective solution for resolving the complex issues that often arise during divorce proceedings. It allows both parties to engage in structured conversations with a mediator, aiming to reach mutually acceptable agreements on matters such as asset division and child custody. The primary goal of divorce mediation is to achieve conflict resolution and establish a written agreement that both parties can accept, without the need for court intervention.

In Louisiana, contested divorce and child custody cases can be emotionally draining and expose personal details of the marriage to the public. Additionally, attorneys may engage in aggressive tactics to portray their clients as the more suitable parents, creating records that could impact children later in life. By choosing mediation, couples can avoid these pitfalls by addressing their concerns with a neutral third party, outside of the courtroom. 

Divorce mediation has several significant benefits compared to litigation. First, it is generally more cost-effective, as it eliminates the need for multiple attorneys and court appearances. Second, it saves time by allowing the couple to schedule sessions according to their convenience, rather than being subject to the court’s availability. Finally, mediation empowers the couple to make decisions tailored to their unique circumstances, fostering a sense of ownership over the process. This collaborative approach can lead to a more amicable post-divorce relationship for both parties.

What Issues Can Divorce Mediation Help With? 

Divorce mediators can help address a wide range of issues that couples may face during the dissolution of their marriage. These issues include the distribution of property, child custody and support arrangements, retirement planning, tax implications, spousal support, and decisions related to blended family dynamics. Additionally, mediators can assist with elder care concerns, adoption proceedings, post-divorce conflicts, and estate arrangements. They may also provide guidance on premarital preparation, help resolve parent-teen problems, and address education-related matters. In essence, divorce mediators offer a comprehensive approach to resolving the various aspects of family life that may be impacted by divorce.

When Divorce Mediation May Not Be the Best Option

Although divorce mediation offers numerous benefits, it may not be the ideal choice for every situation. In cases where there is a history of domestic violence, substance abuse, or power imbalances, mediation might not provide a safe or fair environment for negotiation. Similarly, if one party is unwilling to participate in good faith or actively hides assets, the mediation process may be ineffective. Additionally, when the couple has vastly different perspectives on critical matters or deeply entrenched disputes, mediation may not yield a mutually satisfactory resolution, making litigation a more appropriate choice in such circumstances.

Exploring Divorce Litigation: The Traditional Courtroom Process

Divorce litigation is the conventional method of dissolving a marriage, involving a formal legal process and courtroom proceedings. In this approach, each party is represented by an attorney who advocates for their client’s interests in matters such as asset division, child custody, and support arrangements. A judge presides over the case, ultimately making the final decisions. While litigation can provide a clear and enforceable outcome, it can also be costly, time-consuming, and emotionally draining. Furthermore, the adversarial nature of litigation often intensifies conflicts, which may have long-lasting effects on the post-divorce relationship between the parties involved.

The Impact of Louisiana’s Community Property Laws on Divorce Litigation

Louisiana’s community property laws play a crucial role in divorce litigation within the state. As a community property jurisdiction, Louisiana mandates that all assets and debts acquired during the marriage are considered jointly owned by both spouses, irrespective of individual contributions. Consequently, these assets and debts are typically divided equally upon divorce. Navigating the complexities of community property laws during litigation can be challenging, as the process involves identifying, valuing, and distributing the marital estate. This often leads to increased legal fees and contentious disputes, further emphasizing the importance of understanding the implications of these laws when pursuing divorce litigation in Louisiana.

The Role of Child Custody and Support in Divorce Proceedings in Louisiana

In Louisiana, child custody and support are pivotal aspects of divorce proceedings, with the primary objective being the best interests of the child. Custody arrangements are determined based on various factors, including the child’s age, emotional needs, and the parents’ ability to provide a stable environment. The court may grant joint or sole custody, depending on the circumstances. Child support is calculated using state guidelines, taking into account both parents’ income, the number of children, and additional expenses. Whether through mediation or litigation, establishing fair and appropriate child custody and support arrangements is vital to securing the child’s well-being during and after the divorce process.

Factors to Consider in Choosing Mediation or Litigation

Selecting the most appropriate method for a divorce requires careful consideration of several factors. Divorcing spouses should assess their level of trust and communication, as successful mediation hinges on open dialogue and cooperation. They should examine the complexity of their financial and custody situations, and whether they can be resolved amicably, as well consider any history of abuse or power imbalances that may make mediation difficult. By considering these aspects, a divorcing couple can make an informed decision between mediation and litigation, ultimately leading to better outcomes for themselves and their children. 

If you are facing divorce and need to explore your options, call 504-523-6496 or contact our expert team for a free consultation. 

Recently the Louisiana Illuminator reported that the Republican party of Louisiana wants to recommend the repeal of no-fault divorces, arguing that no-fault divorces have weakened the institution of marriage and are contributing to widespread child poverty in Louisiana. 

No-fault divorces can be granted as outlined in La. Civ. Code art. 102, La. Civ. Code art. 103(1), and La. Civ. Code art. 103.1 to couples who must simply prove that they have been separated and have lived apart continuously for six months or one year, depending on whether minor children were involved. However, would this affect alimony laws if Republicans successfully eliminate no-fault divorces in Louisiana? To answer that question, the laws regarding alimony in Louisiana would have to be understood. 

Types of Alimony in Louisiana

Two types of spousal support are available in Louisiana, temporary and final. These types of spousal support are not granted automatically. Instead, a spouse must request spousal support, and the judge determines whether and how much spousal support should be given.

Interim or Temporary Alimony

As soon as divorce proceedings start, a spouse can ask for interim spousal support to help support reasonable needs, especially if unemployed or working part-time. Temporary spousal support can also be requested to help pay outstanding medical bills or community debt. In addition, if one spouse has taken the community assets away from another, this is one more cause to seek interim alimony.

Final or Permanent Periodic Alimony

This type of alimony is the final support order that will determine how much one spouse will pay to the other and for how long after the divorce is final. There are several factors that the judge considers when considering a final spousal support order.

Factors Used to Determine Spousal Support Amounts

When requesting interim alimony, a judge considers the needs of the spouse that is requesting temporary spousal support, the other spouse’s ability to pay any amount or the amount requested, if there are any other interim or final child support obligations, and the level of the standard of living during the marriage.

Some factors when considering an interim support order are the same as when considering a final alimony order. However, other more complicated aspects are involved when determining the amount and duration of final support payments. La. Civ. Code art. 112 contains the guidelines of consideration, which include the following:

• The earning capacity of both spouses
• The effects of child custody on a spouse’s earning capacity
• The time it will take for earning capacity to be increased with education, training, or employment
• The health and age of both spouses
• The duration of the marriage
• The divorce is granted as an at-fault divorce, or domestic abuse was committed during the marriage
• The tax repercussions that may occur

Tax Implications & Health Insurance Coverage 

It used to be that under 26 USC § 215, alimony payments were IRS deductible payments and reportable incomes for spouses that had spousal support orders granted before January 1, 2019. However, this code was repealed with the enactment of 2018, Pub. L. 115–97 sec. 11501, making alimony payments no longer deductible or reportable income for final periodic spousal support orders granted or modified in 2019 or later.

Spouses must also consider that they may be losing their health insurance coverage when divorce proceedings start. If one spouse is on the other spouse’s health plan, the loss of health insurance coverage should be of great concern and included in the request for spousal support. 

The spousal support request could be granted with medical insurance coverage payments or increased spousal support. Sometimes one spouse will be required to keep the other spouse on their employer-sponsored group health insurance plan for a set amount of time. 

How Long Does Alimony Last in Louisiana?

The time that alimony lasts depends on the type of alimony being addressed. Since interim spousal support is temporary, this will have a different duration than final periodic spousal support. Both can be terminated if support becomes unnecessary or circumstances have changed with either party. An example of a change in circumstances could include the party receiving the alimony getting remarried or cohabitating as if married. The death of either party will also end either of these types of support.

Interim Spousal Support

According to La. Civ. Code art. 113, an interim spousal support order will support a spouse through the divorce proceedings and terminate six months after the divorce decree is granted. However, exceptions can be made to extend the order beyond six months but with good reason. Nevertheless, the interim alimony’s duration makes it important to remember to ask for final support that will extend beyond the six months of temporary support.

Final Spousal Support

The duration of the marriage is considered when a judge determines how long the spousal support should continue to be paid. However, no law in Louisiana determines a standard that judges must follow when coming to that conclusion. Therefore, the judge’s discretion will differ on the ratio of how long alimony should be paid compared to how long the marriage lasted.  

Is Alimony Affected in an At-fault Divorce?

If the Louisiana Republican lawmakers successfully eliminate the ability to obtain a no-fault divorce, alimony will be significantly impacted. La. Civ. Code art. 112 says that if a spouse has not been at fault before filing the divorce petition, they will be eligible for spousal support. That means the judge will not grant spousal support if only at-fault divorces can proceed and the spouse needing the support is at-fault.

According to La. Civ. Code art. 103(2), (3), (4), (5), at-fault divorces can be granted without a waiting period if one or both of the spouses has committed:

• Adultery
• A felony that has them sentenced to death or hard labor
• Physical or sexual abuse towards the spouse seeking the divorce or a child of one of the spouses

The spouse that is accused of physical or sexual abuse does not have to be prosecuted for them to be taken into consideration that they are at fault. Another at-fault reason for divorce is if one spouse had an injunction or protective order against them after a hearing to protect the other spouse or a child of one of the spouses from abuse. One more aspect that can occur regarding alimony in at-fault divorces is that the spouse who is not the at-fault party will most certainly be entitled to final periodic support. 

Contact Stephenson, Chávarri & Dawson, LLC at 504-523-6496 or fill out our online contact form to request an initial consultation.

Life changes all the time, and parents who have an open case with the Office of Child Support Enforcement need to put to book any significant change in their financial situation. On the other hand, a child’s needs are also subject to changes. Whether receiving or paying child support, there is a point where changes relating to the amount payable becomes inevitable. Every state has specific guidelines about modifying child support agreements guided by the federal Office of Child Support Enforcement guidelines.

When is it appropriate to file for a child support modification?

The world is changing, and so should child support orders. The timing that leads to child support modification revolves around decreased or increased income. These primary factors make filing for a child support modification appropriate.

Increase or Decrease in Income

A decrease in income is a common issue in child support modification cases. In many cases, the parent behind on payments will claim that their income has been reduced by a certain amount and ask for a decrease in child support payments.

In California, child support can be modified if the father’s income increases. Just like we all know that sometimes people have to work more hours or take on different jobs, sometimes they can get a promotion and make more money for their children. So if one is seeking to modify child support in California, they must also prove that their income has increased to increase their contribution to a child support order.

New Needs of the Minor

Although minors are considered children under 18, there might be provisions for adult children deemed incapable due to disabilities. Children’s needs increase as they age, which prompts an increase in expenses, such as;

1. Change of schools
2. Support for disabilities
3. Extracurricular activities and sports
4. Extra classes
5. Medical care 
6. Dental care, for example, braces
7. Better toys

A custodial parent may petition for additional contribution when the child’s expenses become unmanageable.

Imprisonment

Child support modification due to incarceration depends on the state. The Final Rule by the Office of Child Support Enforcement proposes that states consider imprisonment “involuntary unemployment,” which may be a ground for modification. However, this rule does not apply across all states.

According to the Florida Department of Revenue, the Supreme court in Florida determined that imprisonment does not excuse a parent’s existing order for child support payments. 

New Children 

There is nothing wrong with moving on with life. The obligor may seek child support modification when they remarry or have other children. When this happens, they may petition the court to reduce the contribution of one child so that there is equivalent support for all children. However, if the custodial parent has more children, there will be no additional support from the obligor in the original child support agreement.

Cost-of-living changes

In some states, child support orders provide cost-of-living adjustments (COLA), which are automatically affected every couple of years. However, some states require the parents to file for modifications based on a significant increase in the cost of living.

 Steps needed to file for a modification

The step one can take when requesting a child modification depends on the mode of request they have decided to take. These are the three ways to request a change in child support:

Modification Agreements

It is easier to work out an agreement with the co-parent when modifying a child support agreement. However, it is easier said than done, and it is treacherous to depend on an informal agreement since it is hard seeking the court for enforcement. 

It is important to note that the existing order legally binds the obligor, and the child support enforcement measures cannot be effective if they, for example, verbally agreed to pay more, which needs to be put on record.

Agency Review of Child Support

Every state has a child support enforcement agency responsible for reviewing child support orders to establish whether they meet the child’s needs or if some adjustments are needed. During this process, parents must submit their financial information and documentation to the agency, which may file a modification with the court.

In some states, child support agencies can determine the modification without requesting a modification request from the court.

Court Proceedings to Modify Child Support

Every parent’s dream is to take good care of their children and give them everything they need, even when they must make sacrifices to help them have a better life. Sometimes it becomes a burden, and only some amendments must be made.

Either parent may seek child support modification through a notice of motion in the same court that issued an existing child support order. The application should explain the circumstances and the prayers to change the amount in the primary order. The court will schedule a hearing date, and both parties are subjected to a formal hearing to table their testimony and supporting documents.

The judge decides based on the evidence, and a copy of the ruling is availed to both parties. If either party is dissatisfied, they can appeal the decision within some stipulated time.

 Required documents and forms

When filing for a child support modification, the proper documents save time, money, and stress. Both parents’ financial statements are crucial when determining the child support modification in request. Some of the critical documents and forms required include: 

• Birth certificate for the children for whom you are seeking child support
• Proof of physical address 
• A valid photo ID such as a driver’s license.
• The other parent’s contact information, such as the physical address of the place of employment
• Supporting documents about current income, debts, assets, and expenses.
• Affidavits
• Previous payments
• Existent orders
• Divorce decree, if applicable
• Proof of income
• Proof of paternity
• Medical records, if necessary

 When does a modified agreement become effective?

A modified child support agreement can only be effective if the previous order is revoked; in this case, a new order is the primary order subject to enforcement. However, any accrued arrearages in the previous order are subject to garnishment. Some states have the authority to charge interest on such debts. Contact Stephenson, Chávarri & Dawson, LLC at 504-523-6496 or fill out our online contact form to request an initial consultation.

Divorces are difficult. In real life and in the news, we always hear about this person divorcing their significant other. Therefore, some people choose a legal separation rather than put their family through the big “D”. A legal separation can save heartache and allow both parties to decide if theirs is a marriage worth saving or if it is truly time to call it quits.

For many couples, it is the break they need if they want to avoid becoming just another statistic. However, in Louisiana, it can be a little more complicated than simply going to the courthouse and requesting a divorce.

What is Legal Separation?

A legal separation is defined as an arrangement where married couples live apart, but remain legally married. This can be achieved by both parties agreeing to the separation or being ordered to separate by the court.

Who Can File for A Legal Separation?

Louisiana is one of just a few states that see marriage in two ways. There is a “traditional” marriage and a “covenant” marriage. The type of marriage couples are involved in will determine the separation options they have.

Traditional Marriages

In a traditional marriage, the couple may leave the marriage when they feel it is warranted. A traditional marriage requires neither party to provide proof of why the marriage is no longer working. Each person must simply feel that there are irreconcilable differences or an irretrievable breakdown of the marriage. The judge will sign off, granting a divorce, provided there aren’t other issues making it a complicated divorce. Some of the biggest things that will halt a divorce is if one party doesn’t want it or there are kids involved.

With this in mind, Louisiana doesn’t provide an option for a “legal separation” to those who are in a traditional marriage. Couples who feel confident they will divorce can seek a “mensa et thoro.” This simply means they are living apart, but are still legally married. To qualify for it, one party must be able to show:

• Adultery Was Committed
• Physical Abuse Has Occurred
• One Party Was Convicted of a Felony
• Live Apart for Two Years or Abandonment Has Occurred for a Year or More

Of course, couples always have the option to separate without involving the courts. This can allow them to remain married in all legal ways until deciding whether to obtain a legal divorce or remain together. If one or both parties decide to seek a divorce, it will fall under Article 102 or Article 103 divorce law, which simply reiterates that there is no fault, but the two cannot get along or work out their differences.

Covenant Marriages

A couple enters this type of marriage with the knowledge and understanding they are making a lifelong commitment to one another. Couples who choose this option are agreeing to not get divorced. To divorce a partner, the filing party must be able to prove:

• Abandonment
• Adultery
• Abuse
• Chemical Dependency
• Felony Charges
• Or Separate Living Spaces for at Least Two Years

The couple must also try to reconcile their differences through marital counseling prior to filing for divorce. Marital counseling is an important step. Without it, one party can file exceptions stating the other person did not follow the proper channels.

If the couple is currently living apart because of a legal separation, the two-year minimum may be lowered to one year. If there are children involved, the minimum can be approximately 18 months.

Benefits & Drawbacks of A Legal Separation

There are a variety of reasons people may choose to attain a legal separation rather than a divorce. Most of them are beneficial for one or both people involved. Some of the top reasons include:

• Religious Beliefs
• Want to Avoid Costly Divorce Filing
• Relationship Evaluation
• Keep Insurance Plans, Retirement Benefits, Income Tax Breaks, ETC.
• Slowly Transition to Divorce (which may take up to 180 days, 365 days, or two years)

Regardless of the reason for it, legal separation is often a good choice for some people. It could have even helped celebrities who were filing for divorce and chose to stay married a little longer.

Some people also feel a legal separation rather than divorce can actually strengthen a relationship. It allows both parties to remove themselves from a tough situation, clears their head, and evaluate what the other person means to them.

However, despite the benefits, there are also reasons a couple may want to divorce rather than merely separate. It will:

• Allow Remarriage to Another Person
• Permanently Separated Couple
• Leave Each Person in Charge of Their Own Property and Well-Being

When a couple’s divorce is finalized, they go their separate ways. This means they are no longer each other’s next of kin or able to access the financial property without permission from the other person. It is a full separation from the minute the divorce is finalized, which may be important to some couples.

How Does Filing for A Legal Separation Work In New Orleans?

In a traditional marriage for New Orleans residents, the best way to handle a “separation” is to simply agree to go separate ways. If the couple feels something legal should be in place to protect both parties, they may separate with a contract that shows what each responsibilities are. For instance, an agreement for childcare responsibilities, personal property, and other things.

When the couple were wed in a covenant marriage, they needed to attend marriage counseling first. This allows the couple to see if there is the hope of a resolution that doesn’t lead to divorce. It also shows the judge that every effort has been made by the parties. If there is no reconciliation, the couple must go forward with proving why they cannot remain in the marriage. 

If the parties have done all they can to save the marriage and wish to go forward with separation, there are forms available that can make it easier. However, in situations where children are involved, or the two parties cannot get along, it may be easier to seek help.

If you are dealing with a legal separation, schedule a consultation today by calling (504) 523-6496.

Whether a spouse is worth $137 billion, as Jeff Bezos, founder of Amazon, was at the time of his divorce or $100,000, the division of assets and debts depends on the state in which the divorce is filed. The state can either be a community property state or an equitable distribution state. 

As Bezos found out, Washington state, where he and his wife Mackenzie resided, is a community property state. Being a community property state means all debt and assets accrued at the same time they were married are equally divided, allocating each spouse about $65 billion. If Bezos had lived in Oregon, an equitable distribution state, the outcome may have been different.

Find out what happens to debt in a divorce in Louisiana and what to do if there is debt in the marriage and a divorce is considered.

What Happens to Debt in a Divorce?

Remember, several different debts that can accrue during a marriage must be settled in the case of a divorce. If a person accrued the debt before the marriage, that person would be solely responsible for the debt. In other cases, one spouse will be solely responsible for debts, even if the debt was accrued during the marriage.

Credit Card Debts

If both spouses’ names are on the credit card account, called a joint credit card, both will be responsible for 50% of the debt in a community property state. However, in an equitable distribution state, other factors might determine which spouse should be liable for more or less of the total debt besides splitting the debt.

Even if there is just one name on the credit card, this could also be split 50-50 in a community property state. However, even in community property states and very few cases, the court may consider other factors regarding allocating responsibility for the debt. 

Mortgage Loans

Although a mortgage loan will most likely be a community marital debt, other factors may make one spouse more liable than the other. The names on a mortgage are the people who are responsible for paying the mortgage. The names on the title are the owners of the house. If one name is on the mortgage, but both names are on the title, both spouses will still be responsible for paying the mortgage.  

Auto Loans

A car can be in both names, but only one person can have the car and be responsible for the payments. However, the person who gets the vehicle may not feel like making the payments and can force the other spouse to pay or ruin their credit.

Medical Debts

In some states, factors like when the medical debts occurred and how essential was the medical care can be incorporated into deciding liability. At the same time, in community property states, medical debt accumulated during the marriage is split in half.

Student Loan Debts

In Louisiana’s Fourth Circuit Court of Appeal, Dr. Stephen Deputy appealed a divorce judgment against him regarding student loan debts. His ex-wife, Susan Gisleson, had won the right to be absolved of Dr. Deputy’s student loan debts while he had to be half responsible for hers. What was the difference? Dr. Deputy’s loans were taken out before they were married, while his wife accrued student loans while they were married. The Court of Appeal affirmed the decision.

Who is Responsible for Debt in Louisiana?

Louisiana is a community property state where debts and assets accrued during the marriage are divided equally. Therefore, the debt division will be divided for each spouse to be responsible for half unless other significant factors are involved.

What Should I Do if I Have Debt and Am Considering Divorce?

It might be possible for couples to negotiate and divide the debt on their own rather than depending on the court to allocate the debt. However, if that option won’t work, try and pay off the debt. Paying off the debt helps facilitate a smoother divorce and a better chance of keeping assets. 

Consult a credit report to determine the complete list of debts. Then, only pay off debts that will not sacrifice financial security. Credit counseling may help in creating a debt plan. Consider what to do with credit cards, mortgages, and auto loans before the divorce proceedings begin.

Credit Cards

If one or the other spouse is an authorized user on the credit card, remove the name as an authorized user from the credit card account to prevent more charges from occurring. Removing the name will also mitigate damages to a credit score from an ex’s behavior with the card.

Mortgages

If one spouse’s name is on the mortgage and the other is not, but both are on the title, remove the name that is not on the mortgage from the title. Removing the name from the title will remove liability for the debt but also any claims on the house if sold. If both names are on the mortgage and title, consider selling the home and splitting the proceeds.

Auto Loans

It may be best to pay off the balances or sell the cars to get rid of auto loans. If these are not viable options, consider making automatic payments as part of the divorce ruling or refinancing the loan. 

What Happens if I Still Get Calls from Creditors After the Divorce?

Unfortunately, if a judgment allocates a share of the debt to one spouse and the spouse doesn’t pay, the other spouse can still be on the hook for that debt. If the creditor will allow it, try and remove the name that the courts deemed not responsible for the debt from the account. If removing the name from the account is impossible, taking the ex-spouse to court can force them to pay what they owe, pay additional compensation for damages, and face fines or jail.

Also, be aware that when one ex-spouse files bankruptcy after the divorce to absolve themselves of joint debt, this does not forgive the other spouse. The obligation still exists, but the liability of the person who files for bankruptcy is erased. Therefore, creditors can still go after the other ex-spouse for payment despite the bankruptcy. 

If you are dealing with a divorce, schedule a consultation today by calling (504) 523-6496.