Posts Tagged ‘EconomicProblems’


The Four Divorce Alternatives

Tuesday, December 6th, 2016

The Four Divorce Alternatives

By Steven B. Chroman, Attorney at Law

No two marriages are the same, and so it only follows that no two divorces will be the same either, hence the following four broad categories of divorce alternatives: Do-It-Yourself (DIY), Mediation, Collaborative and Litigation. Let’s take a look at the pros and cons of each one.

 

DO-IT-YOURSELF DIVORCE

The best advice I can give you about Do-It-Yourself Divorce, is DON’T Do-It-Yourself! Divorce is very complicated, both legally and financially. You can easily make mistakes, and often those mistakes are irreversible. The only scenario I can envision when a Do-It-Yourself divorce may make any possible sense, might be in a case where the marriage lasted only two or three years and there are no children, little or no assets/debts to be divided, comparable incomes and no alimony.

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3 Ways Divorce Affects Your Credit

Tuesday, December 6th, 2016

3 Ways Divorce Affects Your Credit

By Steven B. Chroman, Attorney at Law

Divorce can be one of the most traumatic life events a person can experience. Legal fees, asset division, child support and alimony can ruin otherwise healthy finances.

  1. Your Ex Stops Paying for Joint Accounts

Many spouses jointly share credit accounts, like a mortgage or credit cards. In some cases, those accounts could still remain in both your names even after a divorce. If your ex begins making late payments or stops paying altogether, you are still responsible to pay those bills in full. Your lenders and creditors want to be paid no matter who foots the bill and no matter what your divorce contract states. If you’re on amicable, cooperative terms with your ex, you might be able to work out mutually beneficial payment arrangements. A spiteful ex, however, might avoid making payments or begin racking up debt to cause you trouble.

  1. Freeze the account pending resolution;
  2. Remove your ex from the account so that the account is in your name only;
  3. Close the account and re-open it in your name only.

In some cases, these actions or changes to account activity could initially ding your credit score, but once you’ve re-established an on-time payment history, you’ll be able to build up your credit score again. (more…)

Smart About Money Article: Financial Infidelity: Commit to Full Disclosure

Tuesday, September 30th, 2014

Financial Infidelity: Commit to Full Disclosure

By: Smart About Money

Say ‘I Do’ to Financial Fidelity

Financial infidelity may start with a “harmless” small purchase that you don’t tell your spouse or partner about. But it quickly can snowball into a larger problem that can lead to devastating financial consequences for you and your family.

Have you ever:

  • Hidden a major purchase
  • Kept a secret checking account/credit card
  • Lied about money earned
  • Lied about outstanding debts
  • Hidden a bill or receipt
  • Hidden cash
  • “Forgotten” to tell your spouse about extracurricular spending (sporting bets/day-trading/online shopping)

 

A NEFE survey found that one in three Americans who have combined their finances admitted to financial infidelity in their relationships. Many others admitted to lying to their spouses about money, and another one-third of these adults said they’d been deceived.

Of the couples whom experienced financial infidelity:

  • 67 percent said the deception led to an argument
  • 42 percent said it caused a loss of trust in the relationship
  • 11 percent said it led to separation
  • 16 percent said the money cheating led to a divorce

 

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Daily Finance Article: 10 Financial ‘Rules’ You Should Start Breaking Now

Friday, September 19th, 2014

10 Financial ‘Rules’ You Should Start Breaking Now

By: Robert Pagliarini from Daily Finance

You should always max out your 401(k) and save for your kid’s college education in a 529 plan, right? Maybe not. Most experts have long touted a number of practices that may actually be working against you. These are the top 10 money rules you should break – and what you should do instead.

  1. You need six months of living expense in cash

This is the granddaddy of them all. Start to type “emergency” into Google (GOOG), and the first suggestion is “emergency fund.” The rule is to make sure you have six months of living expenses tucked away in cash in case you lose your job or suffer a financial setback. Of course it’s important to have a financial safety net, but when you earn virtually nothing on your cash, this rule can cost you. For example, if six months of living expenses for you is $25,000, you’d be sacrificing close to $1,000 of income a year by keeping this money in a checking or money market account.

For years, I’ve broken the mold on this financial rule by telling clients they shouldn’t have their emergency fund in cash. Instead, choose a short-term bond fund that pays 3 percent or higher for your safety net. If you need the money quickly, you can easily sell the fund and get access to the cash. If you don’t need the cash – and these emergency fund accounts are rarely used – you can still make money on the assets.

  1. Max out your 401(k)

Not so fast. There are many good reasons to contribute to a 401(k), such as tax savings, tax-deferred growth and a possible employer match, but there are also good reasons not to contribute as well. Don’t blindly dump money into your 401(k) if you don’t have an emergency reserve of some sort and there is a chance you will be laid off. It is taking longer for most to find a job, so if you think you may be out of work, make sure you have the resources to pay rent and buy food until you land a new job.

​Also, if your employer doesn’t provide a match and you are in a low-income tax bracket, it may make more sense to pay the tax now (since you are in a low tax bracket) and invest in a Roth individual retirement account instead. Use this 401(k) vs. Roth IRA calculator to crunch the numbers.

  1. They key to financial success is cutting expenses

You cannot cut your way to wealth. Too many people and financial advisers focus on trimming expenses when they should be focused on the other half of the equation – income. I’m a proponent for living within one’s means, but too often that creates an artificial barrier or ceiling. “This is what I make, so I have to cut back to save more,” is often the thought process. Rather than living within your mean, work on increasing your means.

There are many ways you can make more money, including asking for a raise, boosting your skills – your human capital – and getting a promotion, starting a side project in the after-hours or going back to school and starting a new career. What you make today is not necessarily what you can make tomorrow. Cut unnecessary expenses and then use your energy to increase your income.

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How Much Does the Average Divorce Really Cost? By: Law Office of Steven B. Chroman P.C. Santa Clarita Divorce Article

Tuesday, September 9th, 2014

Anyone who has ever been through a divorce can tell you, it’s expensive for anyone at any financial level. So, how much does the average divorce really cost? Unfortunately, the answer is not a simple one.

Breaking Down the Costs:

While there may still be plenty of ads promoting a “Quick and Easy Divorce for $299,” that price is usually an upsell with lots of hidden fees.  You get what you pay for is a saying for a reason.

Here are just a few items of the fees and costs divorcing couples can expect to pay:

  • Attorney’s fees
  • Court costs
  • Costs for parent education classes
  • Fees for early neutral evaluations
  • Mediation costs

And if there is real estate involved, you can also expect to pay:

  • Refinancing costs
  • Recording deed costs
  • Added hourly attorney’s fees
  • Appraisal costs

Depending on the circumstances, it is possible to get away without spending what it cost to get married on your divorce.

How to Keep Your Costs Low:

  1. Know What You’re Agreeing To

The real cost of divorce can come from not understanding the financial consequences of a settlement. Hidden taxes, underperforming investments, depreciating assets and a budget that cannot withstand the pressures of inflation will cause people to literally go bankrupt as a result of divorce. The cost of an attorney, or court costs, often pale by comparison.

  1. Act Fast

The number one factor for cost in a divorce is how long the case lasts. The more time a lawyer works on the divorce, the more costly it becomes. Coming to agreements and keeping down the fighting helps.

  1. Play Nice

As pointed out above, coming to an agreement with your ex will help you move your divorce along faster. While nobody wants to go through a divorce, if you are going to have your marriage break up, it’s best that it be amicable if possible. The more you and your spouse can work out on your own, the cheaper the divorce will be.

  1. Sign a Pre-Nup or Get a Post-Nup

While you may not be able to go back in time and get a pre-nup, you can look into a post nup agreement. It is still the best way to keep costs down when it comes to divorce.

For more information and a complimentary consultation regarding separation, divorce, pre and post nuptial agreements and more please call the Law Office of Steven B. Chroman at 661-255-1800 or visit www.chromanlaw.com

The Big Switch Paying Your Ex Husband Alimony. By: Law Office of Steven B. Chroman P.C. Santa Clarita Divorce

Tuesday, May 27th, 2014

Nearly 40 percent of working wives now out-earn their husbands and while that economic power is a good thing, overall, for women, it can have one negative outcome many don’t anticipate.

More and more women find themselves ordered by a court to pay spousal support to ex-husbands.

That these women are angry is to be expected: men don’t like paying alimony either, and writing a check every month has long been, for men, one of the prime impediments to post-marital bliss. It may or may not make it easier on these check-writing ex-wives to know that they are part of a larger movement: the de-gendering of alimony and divorce, which is a natural outgrowth of the de-gendering of roles in marriage.

Once upon a time, the point of alimony was clear: it recognized the essential deal underlying marriage back in the days of “separate spheres,” when it was a husband’s role to provide, and a wife’s role to stay home, raise the children, run the household and enable the husband to be hard-working and high-earning. The economist Gary Becker famously argued that this was how couples maximized their efficiency: dividing the labor enabled both to succeed in their respective spheres. When marriages fell apart, alimony provided legal and economic recognition of the fact that a wife had sacrificed her earning power to maximize that of her husband and enhance the welfare of their family.

Now that the separate-spheres marriage has been replaced, in many cases, by the dual-earner version, there is a move to abolish permanent alimony altogether. In some states the crusade is being supported by second wives, many of them working women, appalled that their earnings (in some cases) are going to pay the alimony of first wives who stayed at home to raise children. The animosity between those two groups is in some ways one more iteration of the mommy wars — the lingering gulf that exists between women who work outside the home and women who work within it. But it’s also a sign that the bargain of marriage has changed and splintered; there can be any number of deals now, including deals where the mom stays home; deals where both spouses work; and increasingly, deals where the woman is the primary earner. The ranks of stay-at-home dads are small, but they have doubled in the past decade.

And in dual-earner marriages, there are more and more where it’s the wife whose career takes center stage and the man’s that becomes supplementary.

As a result, it’s not only women who are wrestling with new emotions; just as women may find themselves angry, men may find themselves uneasy, as both sexes get used to the fact that some of the old patterns will persist, regardless of gender, and so will some of the old obligations.

For your complimentary consultation regarding divorce and support call the Law Office of

Steven B. Chroman at 661-255-1800.

Credit Card Debt and Divorce. By: Law Office of Steven B. Chroman P.C. Santa Clarita Divorce

Tuesday, April 22nd, 2014

Credit Card Debt and Divorce
By Steven B. Chroman, Attorney at Law

No one wants to admit it or deal with it, but more and more couples have credit card debt issues while contemplating or going through divorce. Often little attention is paid to these debts beyond their being assigned to one spouse or the other in the divorce judgment.

Care must be taken that a spouse will not be held responsible for additional credit card debts incurred by the other, and that each spouse is protected to the maximum extent possible if the other fails to make payments.

Remember: Creditors are not obligated to respect the terms of your divorce judgment.

Assigning Responsibility for Credit Card Debt
Often the parties to a divorce will assign to each spouse the responsibility for specific credit cards and their associated debt. To help ensure that all joint debts are identified, including any credit cards which may have been taken out by one spouse without the others knowledge, it may be beneficial to get copies of the credit reports of the divorcing couple, and to make sure that the debt from any creditor not paid off in full is assigned to one spouse or the other.

Cutting Off Your Liability For Additional Debt
When you divorce, you should make sure that you either close any joint credit cards, or that at a minimum you have your name removed from any joint accounts which will continue to be used by your spouse. This will not end your liability for debts incurred up to that point, but should end your responsibility for any new debts incurred on those accounts by your spouse. Similarly, if you hold any accounts in your own name for which your spouse is an authorized signer, you should revoke the authorization.

Protecting Yourself From Default or Bankruptcy
It is not unusual after a divorce for one spouse to fail to pay off a joint credit card debt, which predates the divorce. If appropriate steps weren’t taken to cut off liability, sometimes a joint account will remain open with both spouses liable for the new charges, even though the new charges are made after divorce. The debt load on these cards, delinquent payments, and any default or referral to a collection agency, will appear on the credit reports of both account holders. The creditor will also be able to pursue either or both account holders for payment, including interest, penalties, and possibly legal fees. The creditor does not have to be fair – if it wants, it can direct all of its collection efforts at the innocent spouse.

Thus, a divorce judgment should include a deadline by which the joint credit card debts allocated to each spouse will be paid off in full, and provide for appropriate remedies in the event that repayment does not occur.

For more information or to schedule your complimentary consultation call the Law Offices of Steven B. Chroman 661-255-1800.

Daily Finance Article: 10 Easy Ways To Hide Assets From Your Spouse

Wednesday, April 2nd, 2014


10 Easy Ways To Hide Assets From Your Spouse
By: Robert Pagliarini for Daily Finance

Financial infidelity and lies are all too common in marriages. One in three people admitted to financial infidelity against their partner, according to a January poll for the National Endowment for Financial Education. And that’s just the ones who admitted it. So can you imagine the deception that can occur during a divorce?

Unfortunately, I don’t have to imagine. As a divorce financial planner who often works with the “out spouse” –- the term for the partner in a marriage who was never plugged in to the finances, managed the cash flow, paid the bills or had relationships with the CPA, financial adviser, or attorney. I’ve seen financial deception firsthand as the more savvy and informed “in spouse” tries to cover up cash, hide investments and fabricate expenses and debts.

If you are considering a divorce or in the middle of one –- especially if you are the out spouse -– you need to look for financial deception because it can dramatically affect the assets you obtain and the marital and child support you receive. Although failing to fully and truthfully disclose all assets and liabilities is a crime, don’t count on that to deter your soon-to-be ex-spouse.

The best way to catch a criminal is to think like a criminal. So, to help you get into the mind of a soon-to-be ex with their mind on taking you to the cleaners, here are 10 ways I could hide assets and income from my spouse in a divorce:

1. Transfer assets to a separate account. This is simple and common. Here I would take money from our joint bank and brokerage accounts and transfer them to an account only in my name. Fraudulent? Yes. Effective? Absolutely.

2. Transfer assets to a friend. In a joint bank or brokerage account, both parties have full control over the assets. I could systematically transfer cash and/or investments to a buddy’s account, and then once the divorce is finalized, he or she could transfer it back to an account in only my name. The advantage in transferring the assets to a friend is that when I am legally obligated to report marital assets, these transferred assets are not technically part of our marital property.

3. Overpay the Internal Revenue Service. With a little planning, this is a terrific way to shield assets; and if caught, it’s easy to play the “aw shucks, I totally forgot about this” card. If I knew I was going to file for divorce next year, I could instruct the IRS to use this year’s refund for next year’s tax. Once the divorce is final, I’d have a fat overpayment with the IRS that I could use against future tax.

4. Take cash withdrawals on debit cards. This one starts with “Honey, I’m going to the store” and ends with “Yes, I would” when asked if I want cash back. Although I probably won’t get rich, given enough time I could amass a decent stockpile of cash by taking $60 or $80 every time I am at the grocery. The beauty is that the cash goes under the radar because the total charge shows as groceries.

5. Turn down promotions and raises. If I am friendly with the boss, I would tell him or of my forthcoming divorce and ask that they delay any promotions and set any raises/bonuses aside until after it was finalized.

6. Accrue commissions. If I closed a big deal and was anticipating a large commission payment, I would let my employer know that I wanted to delay receipt for… tax purposes.

7. Forget about employer retirement accounts or stock options. Memory is the first thing to go with age. How could I be blamed for forgetting about a defined benefit plan, ESOP or stock options I own through my employer? I mean, they hardly ever send statements.

The above tactics are child’s play compared to strategies available when you own your own business.

8. Not invoice clients. It wouldn’t be difficult to delay invoicing clients until after the divorce. Although accounts receivables would be accrued assets, this is easier to hide than cold hard cash.

9. Create fake expenses. “Yes dear, I’d love to give you more money but my business is struggling …” thanks to the fact that I’ve created fake expenses, pre-paid vendors, added my cousins to payroll and started paying friends for their “consulting” expertise.

10. Go on a shopping spree. Have you seen the new $100,000 piece of art in my office? Well you would. I’d buy all kinds of personal items and charge exotic vacations to my company, which would quickly soak up any profit that could be divided in the divorce.

I need a shower after dreaming up this list. People hiding assets in a divorce is a real and pervasive problem, but those who do it can only get away with it if their spouse stays in the dark. So if you are the out spouse, it’s time to get more plugged into your finances. If you are going through a divorce, don’t accept your soon-to-be ex’s financial disclosures at face value. Do some digging, and get your attorney and divorce financial adviser involved. If there are significant assets or a company, hire a forensic accountant.

One last thing: If you are disgusted by my criminal ideas and worried for my spouse, don’t be. She’s a certified fraud examiner. If I surreptitiously tossed a coin in a fountain, she’d discover it before it hit the water.
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Daily Finance’s article “10 Easy Ways To Hide Assets From Your Spouse” has a deceiving title.  If you are looking to hide assets from your spouse, you should really consider the legal ramifications in committing fraud.

Understanding your finances is essential in a marriage and, even more so, if you are going through a divorce.  When the stress of handling money, or lack of, becomes too much, it’s easy to hand over the reins and never look back.  But turning your back on your financial future can be highly destructive.  Always stay involved, no matter how stressful it can be.  You don’t want to be surprised in a divorce that your spouse has hidden all your assets or worse… used it all up!

People do strange things when faced with an impending divorce, including everything Daily Finance listed.  Keep yourself safe and informed!

If you need assistant with your divorce and have concerns that your assets are being drained, hidden or stolen, please call our office.

Law Offices of Steven B. Chroman, P. C. Santa Clarita Divorce
Call 661-255-1800 for your free initial consultation today!

Must-Do Steps For Those Who Want Financial Stability Post-Divorce. By: Law Offices of Steven B. Chroman P.C. Santa Clarita Divorce

Monday, March 24th, 2014

If you’re in the early stages of separation and heading toward divorce, you’re probably experiencing anger, betrayal, loss, shock, numbness, confusion, panic –or a combination of them all –and it may seem like you’re on an emotional rollercoaster, feeling “up” one minute and “down” the next.

Over time though, these emotions will begin to stabilize, as you set your sights firmly on a bright, new future as a single person. Clearly, your life will be different. But adapting to –and even embracing –these changes will help ensure your success.

What can you do to stay on the best path forward? Here are a few key steps to get you started towards financial stability post-divorce. Once your divorce settlement agreement is finalized, you will need to:

- Update Accounts. If you changed your name as a result of the divorce, you’ll need to get a new Social Security Card, driver’s license, passport and credit cards. You’ll also need to notify your bank, utilities, insurance companies, credit card companies, the motor vehicle department, your children’s school(s), etc. about any change of name and/or address. The titles on all assets, such as cars and houses, will have to be modified and recorded with mortgage companies . . . and it’s likely you’ll want to update beneficiaries on your life insurance, 401k, pensions and IRA accounts, as well.

- Develop a Comprehensive Financial Plan. Build your credit. Good credit forms the foundation of your financial portfolio and will help you secure loans in your name in the future.  Seek help from an experienced financial advisor. Even more specifically, look for a financial advisor who is trained and experienced in working with post-divorce persons.

Remember: The financial needs of a divorced person are very different from those of a married couple and you must have an advisor who completely understands those differences and knows how to properly manage your money and invest on your behalf.

- Obtain a copy of your certified divorce decree. Make extra copies, and store them in a secure location.

- Close any joint credit accounts.

 – Remove your spouse’s name and/or change your name/address on all remaining accounts, including:
* Bank, brokerage and investment accounts
* Credit cards
* Driver’s license, automobile title, registration and insurance policies
* Employer’s records
* IRS records
* Life, health, homeowner’s and disability insurance policies
* Post office (Remember to have your mail forwarded, too.)
* Professional licenses
* Social security card
* Title to real property
* Utility bills

- Open a new credit card account and request a copy of your credit report.

- Disinherit your spouse:  Write and execute a new will, trusts, medical directives and/or living wills and powers of attorney. Don’t forget to change the beneficiaries on your life insurance, 401k, pension and IRA accounts.

- Establish a system to keep track of all child support made/received, alimony payments made/received, medical expenses, etc.

Enjoy your new life. Once you complete the previous steps, you will be well on your way to establishing a secure financial foundation for your future. For more information and a complimentary consultation call the Law Offices of Steven B. Chroman at 661-255-1800 or visit www.chromanlaw.com.

Paperback: Preparing for Divorce
Kindle: Preparing for Divorce

Seven Tips for Divorce in Difficult Economic Times. By: Law Offices of Steven B. Chroman P.C. Santa Clarita Divorce

Monday, March 17th, 2014

1. Decide what you want. No one can have it all – not in good times, and especially not in bad times. If you want to get divorced and your spouse is unemployed, your house is over-mortgaged, and you’re swimming in credit card debt, you can still do it – but you’re not going to walk out of the courtroom free of debt and with a nice sized nest egg to start your new life.

2. Explore your options. Regardless of whether you are ready or able to get divorced now, you can still meet with a lawyer and find out what your legal options are. You can meet with a counselor or therapist and start dealing with your emotions and the relationships you are in. You can start preparing yourself, not only to be ready to get divorced in the future, if that’s what you choose to do, but to live a better life in the present.

3. Make a plan for your future. If you want to get divorced, but you can’t afford to do it right away, make a plan for improving your situation and moving forward in the future. If money is your issue, you need to find a way to make more and/or spend less.

4. Brainstorm creative solutions. Divorce is never easy. Getting divorced in the middle of an economic downturn is even harder. No matter how much you try to juggle your finances, you just may find that you don’t have any good choices.  Whatever your situation, if you allow yourself to think of every possible option, you just may come up with a solution to your problem that gets you what you want, although maybe not exactly the way you wanted it.

5. Have patience. You didn’t get into the situation you are in overnight, and you can’t expect to get out of it overnight either. Once you’ve discovered your options and made a plan for your future, you need to give that plan time to unfold.

6. Stop trying to control everything. Stressing yourself out about your growing bills or your diminishing retirement account won’t change anything. Accept the fact that you can’t change the economy then decide what you are going to do with your life within that economy.

7. Try to find some happiness right now. If your marriage was failing before the economy took a nosedive, you probably aren’t feeling any better about it now that credit is tight, and jobs are in jeopardy. It’s natural that, on top of being unhappy about your marriage, you’re even more afraid of what will happen if you get divorced. Take the time to educate yourself about the law, finances, and your own situation; Think about what you want to do. Don’t let today slip by while you consume yourself with worrying about tomorrow.

Call 661-255-1800 for your free initial consultation today!