4 Reasons why divorce will not bankrupt you

by Alison Herlihy | Sep 26, 2023 | Division of Assets, Divorce, Family Law

4 Reasons why divorce will not bankrupt you

Many people are concerned about the financial implications of a divorce, and understandably so. Divorce necessarily requires that your family’s income has to go from supporting one household to supporting two households, so lifestyle adjustments are often inevitable.

Alabama is an equitable division state

Alabama is an equitable division state. This means that assets and debts which were accumulated during the marriage are supposed to be divided equitably by the Court. The Court is not constrained by whose name the asset or debt is in or who provided the actual financial contribution to the asset.

Even if you did not work outside the home during the marriage, you will still get a fair share of the assets because you have made contributions to the marriage through your time and effort. If your family’s assets and income substantially exceeded your debts going into your divorce, you should come out of your divorce with enough to make a fresh start.

Our Court’s Status Quo order

When you file for a divorce in Mobile County, our court almost immediately enters their standard pretrial order, which most people call their “status quo” order. This means that assets are to be preserved and not disposed of until the divorce is final.

It also means that family bills and expenses are to be paid in the same manner as they were paid prior to the divorce being filed. These provisions are designed to preserve the family’s finances for the benefit of both parties until the divorce is over.

Here are some of the relevant provisions from the pretrial order from the domestic relations court in Mobile County:

Payment of recurring expenses. It is the intent of the Court for the parties to maintain the status quo as it existed during the marriage and prior to the decision to file for divorce to the extent possible. Therefore, it is Ordered that the parties continue to pay all debts and other regular expenses, including but not limited to rent, mortgage payments, utilities, cell phone, car loans, gas, food, insurance, children’s school and/or child care expenses and other necessary living expenses in the same manner and from the same source as they were customarily paid in the months leading up to the filing of the divorce. If the Court is called on to determine what is customary, the Court will review the average expenditures in the six (6) months leading up to the filing of the Divorce and any other information that may be relevant to that determination.

Preservation of assets and access. Without prior Court authorization or the written agreement of both parties, the parties shall not:

a. sell, assign, transfer, conceal, liquidate, encumber, dissipate, destroy, damage or otherwise dispose of assets presently in their control, nor shall they direct or permit the same to occur;

b. make withdrawals from, encumber, or liquidate any account with a financial institution including but not limited to checking, savings, money market, CDs, or the like (except for the ordinary expenses necessary to maintain the status quo as Ordered in paragraph 6 above or to pay lawyer’s fees or litigation expenses herein);

c. withdraw from, borrow against, change the beneficiary designation or otherwise reduce any retirement accounts, stock purchase plans, or the like;

d. change any insurance policy (medical, life, property, etc) including making any changes to coverage, amount or term, ownership, beneficiary designation, or allows such policies to lapse;

e. terminate, allow to lapse, or otherwise adversely affect any utility service, including water, gas, electric, cable, internet, telephone or other services, or withdraw deposits therefrom;

f. terminate or limit the other spouse’s access to credit cards to which they have customarily had access prior to the divorce being filed;

g. destroy or alter any records of any kind, including electronic data files; or h. limit the other party’s access to the home (unless the parties have already agreed to separate prior to the divorce being filed), safe deposit box, financial records or storage unit(s) to which that party normally had access during the marriage.

However, this Order shall not prohibit the use of earned income to pay reasonable and necessary debts and living expenses of the parties as required under paragraph six (6) above or when necessary in the normal and reasonable course of operating a business.

Creditors cannot come after you for your spouse’s debts

A lot of people have a common misconception that, if you are married, you are legally responsible for your spouse’s debts. This is not true. If your spouse has a gambling problem or a spending problem, they take out a bunch of new credit cards and max them out, the credit card companies cannot come after you to collect debts that are in your spouse’s name.

If both of your names are on the debts, that is a different story. When you and your spouse have a joint credit card, the credit card company just wants their money, and they will collect it from either person whose name is on the card. If your spouse suddenly insists that credit card debt be transferred to your name, that is a major red flag. If you are already feeling like you cannot trust your spouse, do not agree to put any new debts in your name for their benefit.

The divorce court has wide jurisdiction to enter equitable, or fair, orders on how the family’s debts should be divided. The divorce court is not necessarily bound by whose name the debt is in, but they will look to who used the card or who benefited from the debt in making a fair decision.

Separating your finances can protect you from financial mismanagement by your spouse

One of the most common reasons we see people getting divorced is due to different attitudes about money, for example, one spouse is a saver and one is a spender. That can cause a lot of tension to build up over the years when you fundamentally disagree about money.

Often when people are married, they commingle all of their family finances. If that is the case, you have no control over how your spouse uses those funds, even if you do not agree. Money in a joint bank account is equally owned by both of the people in the account. If your spouse thinks it is a good idea to go out and buy $10,000 worth of rugs without discussing it, that can cause some major issues.

If your spouse is dealing with issues such as mental illness or addiction, that can go hand in hand with erratic spending. If you want your spouse to work and they refuse to do so, that can cause financial strain on your family. If any of these scenarios sound familiar, you may be better off financially after you are divorced because you will be in control of your own finances.

If you are already in a financial position where your debts exceed your assets and income, you may need to turn to bankruptcy to get some financial relief. There is no shame in that – bankruptcy relief exists for a reason! You should certainly contact a bankruptcy lawyer if you need advice on a potential bankruptcy. If you need advice or representation for your divorce, please contact us at Herlihy Family Law.

Author: Alison Herlihy

Family law attorney Alison Herlihy is a native of Mobile, Alabama. Alison has engaged in the private practice of family law since 2005, focusing primarily on domestic relations, divorce and child support, child custody law, adoption law, juvenile, probate practice, and wills.

Alison Baxter Herlihy earned the prestigious AV Preeminent peer review rating from Martindale-Hubbell, which recognizes attorneys for the highest levels of legal ability and professional ethical standards. Alison is a certified Guardian Ad Litem. In 2015, Alison became a Registered Mediator on the Alabama State Court Mediator Roster, in both general and domestic relations mediation.

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10 Documents you need if you are getting divorced in 2023

by Alison Herlihy | Aug 21, 2023 | Divorce

10 Documents you need if you are getting divorced in 2023

Almost every new client that comes to our office to consult about divorce has the same questions:

How much child support will I get?

How much child support will I have to pay?

Will there be alimony? If so, how much will it be?

What will happen to our house? Can I keep the house?

What kind of asset division or property settlement will I get?

Does retirement get divided? How does that work?

How will our debts be paid or divided?

For your divorce lawyer to be able to give you well-informed answers to these questions, you will need to know the basic information about your family’s financial picture.

At Herlihy Family Law, we have all of our potential clients complete a Client Information Sheet that asks for this information so that we can give you the best advice possible and make the best use of your time and money in your consultation.

Of course, we understand that it is not always possible for you to obtain this information if your spouse controls all the finances, for instance, but gather as much information as you can.

If you do not have the documents, you can always request copies of anything that your name is on directly from the financial institution or other business entity.

Here is a list of Herlihy Family Law’s recommendations for the top 10 Documents you need to prepare for your divorce in Mobile, Alabama:

1. Tax Returns

Try to obtain copies of the last three years of income tax returns. Sometimes, income can fluctuate, so if you have three years of tax returns, that can give you a good estimation of what average income looks like.

If there is a family business or rental property involved, you need to get copies of both personal and business or corporation tax returns. You will want complete copies, including every page of the tax return itself, plus any required attached documents which reflect income, such as W-2s, 1099s, and K-1s.

If you do not have copies, you can always ask for copies from your accountant or tax preparer, or directly from the Internal Revenue Service.

2. Pay Stubs

A year-to-date pay stub for both yourself and your spouse can be used to calculate child support. Often, one parent will cover the minor children’s health insurance through their employer, so the cost of health insurance will be reflected on the pay stub. The out-of-pocket health insurance cost is factored into child support.

Pay stubs can also be helpful to reveal information about other deductions, such as an employer-sponsored retirement plan or life insurance.

3. Financial Account Statements

If possible, you want to have copies of at least the last 12 months of statements for all financial accounts. Twelve months is recommended so you can assess if any monies have been moved or liquidated in anticipation of the divorce, or if any accounts have significantly changed in value.

If you cannot get twelve months, attempt to obtain at least the most recent statement for every account so you know what your monetary assets are right now.

Even if your spouse normally gets the statements or has online login access, you can obtain copies directly from the financial institution of any account that your name is on.

Examples of the types of accounts you want statements for would include: checking accounts, savings accounts, business bank accounts, money market accounts, certificates of deposit, IRAs, 401Ks, pensions, mutual funds, investment accounts, etc.

4. Statements for Credit Cards or other Debts

You will want copies of statements for all credit cards or other debts. Just like with financial accounts, try to get twelve months of statements. If that is not possible, you will want at least the most recent statements for all debts so you know what you owe.

Credit card statements, in particular, can be a wealth of information about the other party’s spending habits and behavior.

Examples of the types of debts would include credit cards, mortgages on real estate, vehicle or boat loans, personal loans, home equity lines of credit, promissory notes, etc.

5. List of household goods and furnishings

When you get divorced, you will need to divide up all of your household goods, furnishings, and other personal property. Go room by room and make a list of all the items. If you have items located at multiple places, such as a family business or vacation property, make sure to note where the items are located. Taking photographs can be helpful as well.

6. Identification Documents for yourself and your children

You will want to obtain the originals, or at least copies, of all identification documents for yourself and your children, such as birth certificates, passports, social security cards, driver’s licenses, or other photo IDs.

Immunization records are also required for school enrollment, so you will want copies of those as well.

7. Copies of regular recurring monthly bills

When you get divorced, you often need to figure out your monthly living expenses, as that is relevant to issues such as alimony. Sometimes, it is hard to figure these out without copies of the bills.

Gather copies of your regular bills for the past 6-12 months so you can determine your average monthly expenses.

Examples would include the items listed above plus power bills, water bills, cable/internet bills, invoices related to your children’s school and extracurricular expenses, grocery and gas receipts, and medical and dental bills which are not covered by health insurance.

8. Cellphone bills

If you are on a family cellphone plan, you can request itemized cellphone bills for all the phones on the plan. The bills will reveal both incoming and outgoing phone calls and text message activity.

It will not reveal the contents of text messages, unfortunately, but knowing who your spouse is communicating with and when can be very valuable information in a divorce.

We have even had a client whose spouse bought another unknown person a $1000 cellphone on the family plan, and the client did not even know it until they obtained a copy of the itemized bill!

9. Relevant evidence in your case

Any items you have access to can be relevant evidence in your case. This could include items on your own cellphone, such as text messages with your spouse, photographs, or video and audio recordings. It could also include video footage from your home security cameras, or mail, receipts, or other paperwork you have found in your house.

Remember though, if you bombard your lawyer and their staff with thousands of text messages, it will make your legal fees go up as the team has to spend time reviewing everything you provide. When you gather evidence, keep in mind what you are trying to prove or show.

A text message between you and your spouse that says “Please pick up our daughter’s birthday cake,” and they reply “OK,” does not really prove anything. If your spouse texts you, “I am really sorry I cheated on you and I promise I will never do it again” — that could be important to your case.

10. Your calendar or log of significant events

A divorce case in Mobile, Alabama can take a year to get to trial sometimes. Unlike other types of legal cases, the parties to a divorce are often frequently interacting with each other throughout the pendency of their case; therefore, they can almost constantly create new evidence through these interactions.

There can be ongoing new developments that affect your case – someone gets arrested, someone files bankruptcy, someone goes to the hospital, etc.

It can be impossible to remember everything that has occurred over what is probably the most stressful year of your life, so it is a very good idea to keep a log or calendar to note down any significant events that occur leading up to your divorce being filed and while your divorce case is pending.

Conclusion

If you spend some time and effort really getting organized, you will feel much more prepared, informed, and confident going into your divorce. Knowledge is power! These ten items are a great place to start.

Author: Alison Herlihy

Family law attorney Alison Herlihy is a native of Mobile, Alabama. Alison has engaged in the private practice of family law since 2005, focusing primarily on domestic relations, divorce and child support, child custody law, adoption law, juvenile, probate practice, and wills.

Alison Baxter Herlihy earned the prestigious AV Preeminent peer review rating from Martindale-Hubbell, which recognizes attorneys for the highest levels of legal ability and professional ethical standards. Alison is a certified Guardian Ad Litem. In 2015, Alison became a Registered Mediator on the Alabama State Court Mediator Roster, in both general and domestic relations mediation.

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Top 2 Mistakes Made When Getting Divorced Without An Attorney

by Alison Herlihy | Jul 24, 2023 | Alabama, Child Support, Children, Custody, Division of Assets, Divorce, Family Law, Significant Decisions, Uncategorized

Top 2 Mistakes Made When Getting Divorced Without An Attorney

What if there are no attorneys involved at all?

In recent years, there has been a proliferation of websites and services that promise they will sell you a simple and easy set of “do-it-yourself” divorce papers for as low as $99!

Have you ever heard of that old saying – you get what you pay for? Well, that is as true in the legal world as anywhere else.

We have represented countless clients over the years who purchase “do-it-yourself” divorce papers from an online service only to find that the papers are not in compliance with state and local requirements.

In Alabama, there are several other forms required along with your signed agreement when you file an uncontested divorce. In every divorce case, the Defendant must sign an answer and waiver form, and you must prepare a proposed Judgment of Divorce order for the judge to sign.

If you have children, there are even more forms that are required by the State of Alabama, including CS-41 income affidavit forms for both parties, CS-42 child support guidelines, and a CS-43 notice of compliance form.

Additionally, when you have children, the agreement itself has numerous required provisions that must be included, such as that both parties must attend a parenting class, specific language for an income withholding order for child support, and the entire text of the Alabama Parent-Child Relationship Protection Act.

If you file your divorce papers with no attorneys involved, and the paperwork is incorrect, the Clerk of Court will flag the paperwork and it will not even be sent to the child until the paperwork is corrected.

Here is the catch – the clerk of court cannot give you legal advice to explain to you how to correct the paperwork, so oftentimes clients end up hiring our office to re-file the correct paperwork after they have already had to pay for a “do-it-yourself” divorce.

If your paperwork is incorrect and your filing is flagged, the clerk will set a deadline in your case called a “disposition docket,” which means you have until that date to submit corrected paperwork.

If you don’t meet the deadline, your case will be dismissed. If your case gets dismissed, and you have to re-file for divorce, you will have to pay a second filing fee to the court.

The moral of the story is, if neither party has an attorney, you might end up having to pay for your divorce twice.

What if my spouse has an attorney and I don’t?

In Alabama, divorce lawyers are not ethically permitted to represent both parties in a divorce case. Even if you agree on everything, a lawyer can only represent one party.

I cannot begin to count all the clients I have met with over the years who have told me, “When we got divorced, we used the same attorney.” I end up having to explain to them that that means their spouse had an attorney, and they did not.

This type of client is typically in my office because they did not understand the agreement they signed or they are dissatisfied with it in some way. Unfortunately for this client, there are limited circumstances under which you can change the terms of a divorce decree by an agreement that has already been entered by the court.

Often, these clients are stuck with unfavorable terms that they agreed to because they chose to sign an agreement without getting legal advice. Any terms of your divorce that are related to assets and debts are final when the divorce is final, and are not modifiable.

Terms of your divorce that relate to child custody, visitation, and child support can be modified but only if there has occurred a sufficient change in circumstances since the divorce was granted.

If your spouse hires a lawyer to draft up the paperwork, your choices are either (a) get your own lawyer, or (b) proceed without a lawyer.

If you choose to proceed without a lawyer, that means you have no one to obtain legal advice from if you have questions about what you are legally entitled to or what is fair. Your spouse’s lawyer’s job is to do what is best for your spouse, not you.

For example, say you and your spouse jointly own your marital home together, with both of your names on the deed and mortgage. You agree your spouse can keep the house, and their lawyer draws up a divorce agreement that says you will deed the property over to your spouse.

If you choose not to obtain your own legal advice, you may not know or understand that signing a deed will not remove your name from the mortgage.

As stated earlier, matters related to assets and debts are not modifiable.

This means that you are now stuck with your name on a joint mortgage with your ex-spouse! If they make the payments late, this will hurt your credit. Even if they make the payments on time, having your name on this mortgage may prevent you from being able to qualify for your own mortgage for years to come.

As you can see from the very common example above, even a one-time consultation with their own divorce lawyer could have saved this client from a very costly mistake.

If you are considering divorce and you’re not sure if you should hire a divorce lawyer, schedule a private consultation with one of our experienced divorce attorneys today.

Author: Alison Herlihy

Family law attorney Alison Herlihy is a native of Mobile, Alabama. Alison has engaged in the private practice of family law since 2005, focusing primarily on domestic relations, divorce and child support, child custody law, adoption law, juvenile, probate practice, and wills.

Alison Baxter Herlihy earned the prestigious AV Preeminent peer review rating from Martindale-Hubbell, which recognizes attorneys for the highest levels of legal ability and professional ethical standards. Alison is a certified Guardian Ad Litem. In 2015, Alison became a Registered Mediator on the Alabama State Court Mediator Roster, in both general and domestic relations mediation.

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Do you have to pay child support if you have joint custody in Alabama?

by Alison Herlihy | Jun 26, 2023 | Alabama, Child Support, Children, Custody, Divorce, Uncategorized

Do you have to pay child support if you have joint custody in Alabama?

Wondering do you have to pay child support if you have joint custody in Alabama?

First, let’s talk about what joint custody is exactly because joint custody means a lot of things to a lot of people. When it comes to custody laws in Alabama, it is the state policy in Alabama, whether parents are divorced or have never been married, that it is in the best interests of children to have frequent and meaningful contact with both parents, as long as they are fit parents; however, joint custody does not necessarily mean equal physical custody.

Joint Legal Custody

Joint Legal Custody means both parents have equal rights and responsibilities for major decisions concerning the child, including, but not limited to, the education of the child, health care, and religious training. The court may designate one parent to have sole power to make certain decisions while both parents retain equal rights and responsibilities for other decisions. Ala. Code 30-3-151 Definitions (Code Of Alabama (2023 Edition)).

Joint Physical Custody

Joint Physical Custody means physical custody is shared by the parents in a way that assures the child frequent and substantial contact with each parent. Joint physical custody does not necessarily mean physical custody of equal durations of time. Ala. Code 30-3-151 Definitions (Code Of Alabama (2023 Edition)).

Although equal durations of time are not required under the law, the most common form of joint physical custody is alternating weeks, so as to promote stability for children after a divorce or after their never-married parents’ relationship is over.

In the past, there has been no set rule for how to calculate child support in a joint physical custody scenario. Joint physical custody was always considered to be a reason to deviate from what the state of Alabama guidelines call for in child support.

New Amendment in Alabama and Joint Custody

The Alabama Supreme Court has passed an amendment under the rules of Judicial Administration (ARJA Rule 32), which specifically sets out how an Alabama child support payment is to be calculated in a joint custody situation. You can find the entire text of these amendments here:

https://judicial.alabama.gov/docs/rules/OrderonRule32AlabamaRulesofJudicialAdministration.pdf

Under the amended rules, there are specific forms and guidelines that must be followed to calculate child support in a joint physical custody arrangement. There is a key difference between the requirements under this rule and the state statute regarding joint physical custody.

The child support rules use the term shared physical custody, which refers to a court-ordered physical custody arrangement whereby each parent retains physical custody of a child 50% (or approximately 50%) of the time. A scenario where parents alternate custody on a week-on, week-off basis would meet this definition.

This new rule means that there are child support guidelines that must be followed and complied with in a shared physical custody arrangement. Although every case is different, it is likely that if one parent earns significantly more money than the other, there will be child support; whereas, if the parents make the same amount of money, there may not be child support or there may be minimal child support.

Again, every case is different and your attorney will have to calculate child support based on the facts of your particular case.

There is also a very significant except to this new rule regarding child support and shared physical custody – if a parent wilfully fails to exercise their parenting time for more than 14 days in a 12-month period, the court may consider that failure to exercise physical custody as a material change of circumstances sufficient to support a modification of child support.

In other words, the Court does not have to calculate child support based on shared custody if one of the parents fails to exercise their shared custody according to their court order.

If you are considering divorce, a modification of custody or support, or you are a never-married parent seeking a custody order for the first time, these new rules and regulations about joint or shared physical custody and child support are very timely because these new rules went into effect on June 1, 2023.

If you think the new rules about joint custody or shared custody and child support may apply to your situation, contact our office for a consultation.

Author: Alison Herlihy

Family law attorney Alison Herlihy is a native of Mobile, Alabama. Alison has engaged in the private practice of family law since 2005, focusing primarily on domestic relations, divorce and child support, child custody law, adoption law, juvenile, probate practice, and wills.

Alison Baxter Herlihy earned the prestigious AV Preeminent peer review rating from Martindale-Hubbell, which recognizes attorneys for the highest levels of legal ability and professional ethical standards. Alison is a certified Guardian Ad Litem. In 2015, Alison became a Registered Mediator on the Alabama State Court Mediator Roster, in both general and domestic relations mediation.

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3 Reasons Why Divorce is Not Bad for Your Children

by Alison Herlihy | May 25, 2023 | Child Support, Children, Custody, Divorce, Family

3 Reasons Why Divorce is Not Bad for Your Children

Wondering if there are reasons why divorce is not bad for your children? There are many proven reasons why divorce is better for your children than keeping them in the presence of a bad relationship.

Oftentimes, people who want to get divorced may choose to stay together because they think it is better for the children. Staying together versus getting divorced is not always bad for children.

Here are three reasons why divorce is not bad for children:

1) The environment is less contentious after divorce

Divorce is not bad for children because parents who are divorced can often have a better, or less contentious, relationship than parents who stay married when they shouldn’t.

Think about it – if you think you may want to get divorced, what are the reasons why?

Reasons you are considering divorce might involve, arguing, yelling, tension in the home, financial problems, infidelity, domestic violence, emotional or verbal abuse, or a host of addictive behaviors related to alcohol, drugs, gambling, pornography, or other issues. Despite your best efforts, your children will see and feel this conflict in the home.

Children crave peace, structure, and stability in their environment. If your marriage is tumultuous, divorce may help bring more peace into your children’s lives, and yours.

2) Children have better role models after divorce

The number one way you teach children is not with what you say but with what you do. For this reason, divorce is not bad for your children, and to the contrary, is often a better situation for them.

Every day, you and your spouse are modeling behavior for your children, which is how your children learn how they should be treated and how to treat others in relationships.

If your spouse is mistreating you to the point that you wish you could get divorced, consider what example it is setting for your children if you stay. Your children will be learning that both the mistreatment of a spouse and the tolerance of that behavior are normal and acceptable.

Simply by taking the appropriate action, you will be communicating to your children that mistreating your spouse is unacceptable and should never be tolerated.

3) High-conflict marriages result in poorer outcomes

There is now a huge amount of psychological research and literature that shows that children of divorce do not have poorer outcomes in life than children whose parents are married, but children whose parents have a high-conflict divorce do have poorer outcomes in life.

Examples of a high-conflict divorce include things such as repeated and protected litigation, constant arguments between the parents about minor issues, expecting the children to take sides, and putting the children in the middle of adult matters and arguments.

If you and your spouse can learn to co-parent in a peaceful and constructive manner, despite your differences which led you to divorce, your children can flourish.

There are many reasons why divorce is not bad for your children. If your goal is to have a peaceful divorce that helps create a fresh start and a brighter future for you and your children, please give us a call or schedule a consultation. Our team of expert divorce attorneys is happy to help you achieve these goals for your divorce and your children.

Author: Alison Herlihy

Family law attorney Alison Herlihy is a native of Mobile, Alabama. Alison has engaged in the private practice of family law since 2005, focusing primarily on domestic relations, divorce and child support, child custody law, adoption law, juvenile, probate practice, and wills.

Alison Baxter Herlihy earned the prestigious AV Preeminent peer review rating from Martindale-Hubbell, which recognizes attorneys for the highest levels of legal ability and professional ethical standards. Alison is a certified Guardian Ad Litem. In 2015, Alison became a Registered Mediator on the Alabama State Court Mediator Roster, in both general and domestic relations mediation.

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