The Beginner’s Guide to Divorce

It starts as a thought – are we heading toward divorce? Once those thoughts become more common and the reality that divorce could happen sets in, it is important for both parties to understand the process. Everyone’s case is different. Here are a few things about the process that are helpful to consider if you believe you are headed down this path.

  1. Get organized. You cannot begin to evaluate what things you will need to address until you start getting some information together. Collect your important paperwork – this includes a copy of the deed to your home, a current mortgage statement, the registration or title for the cars, the last car loan statement, bank statements, credit card statements, and any other important document that addresses financial things (IRA statements, 529 Plans, etc).
  2. Review trusted resources about the divorce prove Divorce varies from state to state and it is quite possible that your friend from Nebraska had a very different divorce than you will in Florida. Laws are different. The process is different. The Florida Supreme Court has resources to assist you in your Dissolution of Marriage (aka Divorce) case. You can find those resources here.
  3. Determine what type of case you will have.
    1. Will your divorce be uncontested? “Uncontested” means that you agree on everything. You and your spouse can then file together and move towards the final judgment of divorce quickly.
    2. Will your divorce be contested? This means that you do not agree on the terms of your divorce and that you may need a judge to make some decisions for you. This type of divorce will take some time for you to go through the divorce process. Contested divorce cases can take anywhere from four months to years.
    3. Have you considered collaborative divorce? Collaborative divorce is an out of court process where you and your spouse address your issues with the help of a counselor, a financial neutral, and attorneys, in order to come to a resolution on your own. Collaborative divorce allows you and your spouse to address your issues, while being guided by professionals. Collaborative divorce allows the parties to resolve all of their issues in approximately five to seven meetings.
  1. Review a Parenting Plan form. The Florida Supreme Court provides a form Parenting Plan, with instructions that you can view here. While many parents think that they know how to divide time, the reality of splitting holidays and birthdays and splitting extracurricular activities are concepts not yet thought about.
  1. Determine how your stuff will be divided.
    1. Create a list of your assets. Since you’ve collected your paperwork above, you should be able to create a list of things that you own. Anything obtained during the course of the marriage belongs to the pot of marital assets and will need to be divided. Make sure to list all of your assets, as well as the value of each item.
    2. Create a list of your debts. Since you’ve collected your paperwork above, you should be able to create a list of debts that you owe. Most debt incurred during the course of the marriage belongs to the pot of marital debt and will need to be divided. Make sure to list all of your debts, as well as the balance of each debt.
    3. Create a proposal as to how these items will be split. In most divorce cases, a judge will seek to divide things equally. If you believe that there should be an unequal split, you should consider speaking with an experienced family law attorney to discuss your options.
  1. Decide if you want to seek alimony. In your divorce, this is the time to seek alimony if you would like to request it. You will not be able to seek it at a later date. Different states have different rules on whether you will be able to claim alimony. The rule of thumb in Florida is that any marriage shorter than seven years is a short term marriage and most likely will not qualify for alimony; any marriage longer than fifteen years is a long term marriage and most likely will qualify for alimony; and any marriage longer than seven years but shorter than fifteen years is in a grey area. Grey area marriages will need to identify what kind of alimony they need and why.

Although this is just a beginner’s guide to divorce, every case is different. It may benefit you to seek a consultation from an experienced divorce attorney to understand your particular situation, your rights, and your options. For more information from Feher Law, feel free to review our blog here, which also includes an article about our practice, and free family law resources for your case.


The Bankruptcy Trustee’s Role in your Bankruptcy Case

The major functions of a bankruptcy trustee are to administrate, liquidate, and litigate.

In the world of bankruptcy, there are two types of trustees that will interact with your case. The first is your case’s bankruptcy trustee. If you are filing under Chapter 7, this will be a Chapter 7 Trustee. If you are filing under Chapter 13, this will be a Chapter 13 Trustee. The second type of trustee that will interact with your case is the United States Trustee. The United States Trustee oversees the administration of bankruptcy cases and Chapter 7 and 13 trustees under the bankruptcy laws. The United States Trustee’s mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of debtors, creditors, and the public. The United States Trustee Program consists of an Executive Office in Washington, DC, and 21 regions with 92 field office locations nationwide.

Administrate – This means that the trustee will administer your case since much of the bankruptcy process is administrative. Much of the bankruptcy process is administrative and is conducted away from the courthouse. This administrative process is carried out by a trustee who is appointed to oversee the case. The Chapter 13 process is extremely administrative, as you will be making payments regarding your case through the Chapter 13 Trustee to your creditors. Your Chapter 13 payment is based on your anticipated income over the life of the Chapter 13 plan. The United States Trustee will administer your case if there are problems or concerns about your eligibility for filing a particular chapter of case. For example, in order to file for Chapter 13, you must earn a wage. Income from social security or unemployment would not count. In order to file for Chapter 7, your income must be under the median income for the size of your household.

Liquidate – The Trustee may liquidate your assets if you file a Chapter 7 case. A chapter 7 bankruptcy trustee gathers and sells your nonexempt assets and uses the money to pay creditors in accordance with the Bankruptcy Code. A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13 case. You can, however, in a Chapter 7 case keep certain “exempt” property; but a chapter 7 trustee will liquidate your remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property. This is an important reason to speak with a bankruptcy attorney – to determine what property, if any, may be lost or liquidated in a Chapter 7.

Litigate – Finally, if needed, the bankruptcy trustee will litigate your case if problems arise. These problems could include a creditor filing an objection to your case, an ex-spouse wanting to deny you a discharge for your debt, or issues regarding fraud or bad faith. There may also be litigation over unexpired leases. Personally, I litigated regarding taxes that were dischargeable under the bankruptcy laws. I also litigated where an ex-spouse tried to discharge an alimony claim. I also litigated whether any potential monies owed in a sexual harassment lawsuit was dischargeable in bankruptcy. The bankruptcy trustee may take positions on these litigation cases. Since they are the gatekeeper to your bankruptcy case, they also play a role in the litigation.

What Does Bankruptcy Fraud Look Like?

Bankruptcy fraud is a phrase we have heard before. We know it involves lying and hiding. But what does bankruptcy fraud look like in a court case?

In a recent example, Michael Stamp, the former owner of Stamp Farms, LLC in Decatur, Michigan, filed a personal Chapter 11 Bankruptcy case. He and the farm were struggling to pay debts and defaulted on its loan with Wells Fargo bank.

Bankruptcy fraud is a federal crime that occurs when a debtor (a person who files bankruptcy) intentionally hides assets or lies to the bankruptcy trustee or court about their finances.

In the bankruptcy case, Wells Fargo claimed it made a $68 million loan in December 2011. Wells Fargo stated that Stamp represented that Stamp Farms had 46,000 acres. Later, an audit found only 27,000 acres.

Stamp also ended up doing what many individuals struggling to pay their bills do – he robbed Peter to pay Paul. Stamp needed money to keep the farm going and pay off a previous loan. So Stamp provided false information to Wells Fargo in order to obtain the $68 million loan. Wells Fargo provided the loan because Stamp misrepresented the amount of land farmed and the value of the assets. After Wells Fargo provided the loan, Stamp continued to provide false information about the farm. Stamp also submitted false claims to the Federal Crop Insurance Corporation and received crop insurance payments.

Stamp’s wife, Melissa, also played a role in the bankruptcy fraud. She admitted giving $75,000 to her brother, $90,000 to her father, and concealing $50,000 in a safe in her home. None of the money was disclosed to the bankruptcy court. Her husband filed bankruptcy just one month later.

So what does bankruptcy fraud look like?

  • Not being honest about the amount of land you own
  • Not being honest about the assets you have
  • Giving away money to a family member before filing bankruptcy
  • Failing to disclose cash in your home to the bankruptcy court
  • Giving things away right before you file for bankruptcy

For her role in the bankruptcy fraud, Melissa Stamp received 20 months in jail, 20 months of supervised release, and required to pay $184,500 in restitution. Michael Stamp plead not guilty to 14 counts of conspiracy to commit bank fraud and making false statements to attain loans and crop insurance. His case is still pending.

Takeaway tips:

  • Always list ALL of your assets (the things you own, including cash, anything in a safe, safe deposit box, and/or storage unit) in your bankruptcy case
  • Always list ALL of your debts (the people or businesses you owe money to) in your bankruptcy case
  • Do not give away things or transfer the title to anything before you file bankruptcy; if you must, be sure to disclose it fully to the bankruptcy court (you may also want to speak to a bankruptcy lawyer to understand how the give away or transfer may affect your case)
  • If you commit fraud on the bankruptcy court, your debts may not be discharged (you may still owe them). You could also face significant prison time and financial penalties.

For the full article about the fraud in Michael Stamp’s bankruptcy case, by Todd Neely, a DTN Staff Reporter, click here.

3 things that lower your credit score and 3 things that don’t

People ask me all the time as to what will affect their credit score. The simplest explanation is that your credit score is based on your debt-to-income ratio, along with other factors. The more debt you have, in comparison to your income, the lower your credit score will be. To have a good credit score (ranging anywhere between 650 to 740), try reducing your debt to less than 30% of your available credit. For example, if you have credit cards with credit limits of $10,000, you should have less than $3,000 of debt on those cards. To have an excellent credit score (ranging anywhere between 740 to 850), you should have less than $1,000 (or 10%) debt on those cards.

While the calculation of credit scores is a mystery, we do know what affects your credit score and what doesn’t.This article by Wendy Connick, of The Motley Fool, discusses 3 items that directly affect your credit score and 3 items that do not. If you would like to see your credit score improve over the next few months, pay specific attention to paying your taxes, paying your bills, and requesting higher credit limits. To see the full article of what affects your credit score and what does not, click here.

5 financial New Year’s Resolutions to make for 2018

It is a new year. Welcome to 2018. Many of us enter the new year invigorated with goals – eat better, exercise more, be happy. Have you given any thought about how to be financially healthy in 2018? This article by Christy Bieber, of The Motley Fool, discusses 5 smart ways to have a financially healthy new year. The 5 things to focus on are straightforward and there are tips on how to use apps and/or computers to help yourself achieve the goal. If you tackle one item per month, you could enter the summer months of 2018 financially fit. Check out the full article here.

The Most Important Thing I learned in 2017 that helped my business

In June, I reopened my law firm after a short hiatus. It was a pull-yourself-up-by-your-bootstraps moment. I could choose to be successful. I could choose to work hard. I could choose to make 2017 a fantastic year for my business. I did.

The most important thing I learned in 2017 that helped my business is that having good colleagues is not only important for your business but for your individual self as well.

After returning to my law firm, I reached out to my colleagues and let them know I reopened my firm. I thanked them for their past support. I also asked them for future support. I shared the types of cases I was accepting. I also had a captive audience with which to share how I differed from other firms. One of the largest differences of my firm is that we utilize alternative fee arrangements. This allows me to create various payment options outside of the normal billable hour concept many firms use. The alternative fee arrangements helps clients take an active role in deciding how to pay the firm for representing them.

After sending out the letters, I went back to pulling myself up by my bootstraps. I put all the functioning pieces of my law firm back in order – phone, email, website, etc. I worked with a phenomenal business coach to make sure I put a success plan into place. I truly believe that all of my 2017 success is due to my business coach’s support. She was a sounding board and a fantastic cheerleader. Some days she believed in me more than I believed in myself. She pushed me to want to be better.

Once the letters hit the desks of my friends and colleagues, the phone started ringing. Some phone calls were from those colleagues to share their congratulations and warm wishes. Some phone calls were from new clients. As phone calls turned into coffee meetings and lunch dates, I realized that over the last six years of previously having my own firm, I developed some pretty amazing relationships with my colleagues. They are supportive – both personally and professionally. They are so giving of their time and knowledge. They are the tribe upon which I relied to help pull me up by my bootstraps. They made 2017 fantastic.

As we head into 2018, I wish you continued success in the new year, inspiration to reach your goals, and a tribe as amazing as mine. Happy New Year!

“A lawyer who represents himself has a fool for a client.”

“A lawyer who represents himself has a fool for a client.”

I heard that quote early in law school. It is a quote I still believe in strongly today. If a lawyer wouldn’t represent himself/herself, why would anyone? Writer Laura C. Morel of the Tampa Bay Times covered the story of Daniel Richards, a defendant charged for fatally beating his 83-year old mother. In the story, the Judge specifically asked Richards if he wanted to represent himself. Even though a public defender was in the courtroom as a standby, Richards refused her help.

As a lawyer, I could see no downside to using the public defender, even if you wanted to represent yourself. The public defender is knowledgeable about the law and more importantly, courtroom procedure. Richards requested things that a judge could not grant. A judge cannot give legal advice or explain the law.

I understand that there are financial constraints to some people hiring a lawyer, but most criminal defendants and ALL criminal defendants on trial for capital offenses, such as murder, are entitled to a lawyer if they cannot afford one.

I understand many people don’t like lawyers. You may not like a lawyer until you need one. There are ways to make sure you protect your interests when you are facing serious charges. Ask your attorney what their plan is. Tell your attorney what your goals are. Be realistic in your situation. And above all, be honest with your attorney!

For the full article on Richards and other defendants who represented themselves in court, click HERE to read the full article.

Truth Bomb Mom on Coparenting

I am a huge fan of Truth Bomb Mom. If you’ve never seen her videos, Kristina Kuzmic talks about the harsh reality of parenting with humor and grace. I could not resist re-posting her insightful discussion about coparenting after divorce. Coparenting is the most difficult part of divorce with children. If you are raising children with an ex, please watch this video!

Click here for the full video.

4 things to know before getting a credit card

Getting credit is great. Someone believes us enough to lend us money that we can spend, and spend, and spend… Once the bill arrives, we often wonder – was this the best idea? Here are four great things to know before you get that credit card and start spending…and spending…and spending…

  1. How much is the APR?

The Annual Percentage Rate, or APR, is the amount of interest that a credit card will charge you per month on the purchases you make. Many cards may entice you with 0% introductory offers and the switch into a high (29.99%) APR. Be very careful in deciding whether a purchase with a 0% interest card is something you can pay off by the time the introductory offer period ends. If not, it may be better to look for a card with a lower APR rate. For someone with good credit, you should be able to get a credit card with an APR as low as 14% or as high as 22%.

If you do not have good credit, consider going to your bank to try to get a secured credit card. With a secured credit card, you put cash down to “secure” your credit limit. If you put $500 down, you get a credit card with a $500 limit. You can then use the credit card for purchases, receive a bill, and pay your statement – just like with any credit card. By using a secured credit card properly, you can increase your credit score and create great spending habits.

  1. Pay your card off in full each month

The best way to increase your credit score and keep your finances healthy is to pay your credit card balance off in full each month. Many times, especially around the holidays, that is easier said than done. If you cannot pay your balance off each month, pay more than the minimum payment. Try to double the minimum payment. By doing so, you will significantly reduce the amount of interest you will have to pay.

  1. Watch out for fees

Leave it to the lawyer to remind you to read the fine print – but it is very important. Many cards have annual fees or unusual fees that may add unnecessary cost to your credit card. Annual fees can range anywhere from $75.00 per year to $500.00 per year. Unless you are using the card for more than 20 transactions per month, you may not see the benefit or gain perks by using this type of card. Unusual fees can include monitoring fees, quarterly fees, security fees, etc. The purpose of these fees is usually not explained in the fine print. This may be an additional way credit card companies try to cheat you into paying additional fees for things you do not need or may not ever use – like that roadside service some credit cards provide.

  1. Consider all of your credit card options

We’ve all been there – you are standing at the checkout line of your favorite store and the cashier asks if you want to open a credit card because you can save 15%. This is not the time we make our best financial decisions. Very often the cashier will not be able to discuss the pros and cons of the card with you, the cashier will not be able to tell you what your APR will be, and the cashier will not know if there are any annual fees associated with the card. This is not the time to say “yes”! Take some time and do your homework. Do you want a card with rewards points? (Be sure to read the fine print on those too – some rewards points must be used with 3 months, others require to you to purchase items from specific websites). There are helpful tools out there to allow you to compare different credit cards. My favorite tool is the smartphone app, Credit Sesame. Credit Sesame can monitor your score and give you helpful tips to improve your credit score. Credit Sesame can also compare different credit cards that may be available to you. The app tells you your odds of being approved for a credit card and reviews from other consumers. It is a great tool if you are ready to do your homework.