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Fort Lauderdale Bankruptcy Legal Blog

Compelling reasons for couples to consider prenups

Most Florida couples preparing to head down the aisle together have many things on their to-do lists, from sending out invitations to writing meaningful vows. While it may seem fatalist, including "have a prenuptial agreement drawn up" on that list may provide much-appreciated peace of mind and added financial security for some soon-to-be-spouses. The purpose of such a document is to predetermine what each party would receive or agree to give up in the event that a marriage comes to an unexpected end.

When a divorce occurs and there is no prenup, the division of property and assets will be determined based on guidelines established by the state. Prenuptial agreements have grown in popularity in recent years, especially among couples entering a second marriage or those with significant assets. In fact, a common reason to have a prenup is because one party has more assets of their own than the other.

Credit card debt delinquency rate rises alarmingly

The number of consumers in Florida and around the country who are finding it difficult or impossible to make their minimum monthly credit card payments is worrying economists. The delinquency rate on this type of debt in the United States has risen from 2.12 percent to 2.47 percent in just two years according to the Federal Reserve Bank of St. Louis, and many experts expect it to continue rising in the months ahead despite a thriving economy and low unemployment figures.

These figures reveal that more than $23 million in credit card debt is currently at least 30 days past due. However, it is the reasons why so many Americans are not paying their credit card bills that are of most concern to financial experts. While some Americans simply forget to make their monthly payments from time to time or sometimes skip a month to take care of an emergency or unexpected expense, research suggests that about one in three Americans do not have enough money coming in to make ends meet and use whatever they have to cover essentials like housing and food.

Is the home loan you co-signed part of your ex's bankruptcy?

Did your former spouse decide to keep the marital home in the divorce? If so, he or she probably also agreed to pay the mortgage loan as well. The problem is that if you failed to have your name taken off that loan, you may still be responsible for it long after your divorce is final.

Perhaps the circumstances at the time did not allow your former spouse to refinance the loan, which would have removed you from the existing loan and removed your obligation to the lender. You believed that your ex would continue to make the payments as he or she agreed in the divorce settlement, but then you discovered that your former spouse filed for bankruptcy. How will this affect you since you remained on the mortgage loan?

Digital assets complicating estate planning

Estate planning in Florida has changed significantly and is likely to continue to change thanks to digital assets. Everything from cryptocurrency and online cash accounts to passwords and online contact lists should be included in many estate plans. As always the most important thing is a communication to the executor of what the assets are and to whom they will pass.

In many cases, it is the access to digital assets that causes problems. People who are making estate plans and who own digital assets should be sure to create a list of crypto keys and passwords and the like so the executor of the estate can be aware of the entire estate. The most important things to convey are the types of assets, the locations of keys and the controls being used for security. Controls might include such things as passwords, timelocks or PINs.

Financial incompatibilities can lead to divorce

Many people in Florida are struggling with massive student loan debt. On average, people who have borrowed student loans owe an outstanding balance of $34,144. For graduates of the class of 2017, that number is even greater, with an average balance of $39,400. Student loan debt is on the rise, and the percentage of people who owe $50,000 or even more has tripled over the past 10 years. Only 22 percent of millennials are debt-free, and student loan debt plays a particularly large role in this debt burden.

Many millennials have postponed marriage due to educational debt, while for those who have chosen to marry, the pressure and stress created by outstanding debt can lead to serious conflicts and even divorce. Educational debt can lead people to delay life plans like having children or buying a home, and conflicts about these issues can expose deeper incompatibilities in a marriage. According to one survey of student loan borrowers, over a third of divorced respondents said that financial issues, including educational debt, played a role in their divorce. Another 13 percent attributed the end of their marriages directly to student loans.

How to handle family issues when estate planning

A TD Wealth poll found that 44 percent of respondents said that family conflicts were the biggest obstacle when it comes to estate planning. This is because there are more blended families in Florida and throughout the country. It is also not uncommon for one spouse to be much older than the other is, which can create problems when trying to create an estate plan.

While parents may believe that splitting assets in an equal manner is fair, this may not be the case. For instance, giving all the children an even share of a family business when they didn't all participate in the company may not be ideal. To prevent family fights, it can be a good idea for parents to talk to their children to address their goals and plans. This may help beneficiaries better understand that assets are being divided in a way that meets their needs instead of serving as an attempt to punish them.

How financial issues lead to divorce

For many couples in Florida, issues about money could lead to marital problems. There are several common financial issues that crop up regularly that may result in divorce. For example, poor communication about money is a problem in many relationships. Usually, this only tends to work out when one person trusts his or her spouse to manage the money, although this can cause problems if the money manager dies.

A lack of savings can also lead to marital strife because it generally means that there will be financial strain in the marriage. A good rule is to have at least three months' worth of expenses saved up. One way to save money is by having the bank deduct a small percentage out of each paycheck.

Early bankruptcy filing can be important

When people in Florida face a growing pile of debt due to credit card bills, medical bills, loans and other issues, bankruptcy can offer a way toward a renewed financial future. At the same time, despite the potential of bankruptcy filings to protect people's financial futures, they may be hesitant to file as soon as it is feasible. Many individuals attribute a sense of economic failure or social shame to filing for bankruptcy, and they may wait for a long time - even years - to file as a result. However, the effects of such a delayed filing can be significantly detrimental to the financial future that can be achieved through a bankruptcy filing.

According to a 2018 law review study, people who continue to struggle for a long period before filing for bankruptcy can find themselves in a much greater financial "hole" from which to emerge. The period prior to a bankruptcy filing is often referred to as the "sweatbox" for the difficult financial conditions that it represents. People in the sweatbox can face lawsuits over unpaid debt, unending collection calls, sales and losses of assets and an inability to pay basic bills like food and electricity.

Veterans with less-than-honorable discharges face hiring troubles

Florida readers may be surprised to learn that military veterans discharged for minor offenses frequently have difficulty finding employment. As a result, the Connecticut Commission on Human Rights and Opportunities recently warned workplaces not to discriminate against veterans based on discharge status.

When a military member leaves service, he or she can receive an honorable discharge, a dishonorable discharge or a less-than-honorable discharge, known as "bad paper." Dishonorable discharges are issued over serious offenses and require a court-martial, but bad-paper discharges can be issued over relatively minor infractions, such as tardiness, talking back or fighting. They can also be issued for suicide attempts or other events associated with mental health problems. According to the commission, these discharges are disproportionately issued to black, Latino and gay veterans. They are also frequently issued to disabled veterans, including those with brain injuries or post-traumatic stress disorder.

What to do with an inheritance

Receiving a monetary inheritance from a loved one who has passed away can be a tremendous help in wiping out old debt or creating a nest egg. However, there are estate administration and probate rules in Florida that govern how the money is to be transferred and what can be taxable after the inheritance. Making the wrong financial decisions regarding an inheritance could quickly cause undue stress and unnecessary costs.

The first step in getting an inheritance settled is to speak with the executor of the estate. They should be able to explain how money and property will be divided and the process by which the transfers will take place. If there is any disagreement in how much is to be transferred or about the process of transferring, it would be advisable to speak to an attorney to help sort things out.

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