Divorce nad bankruptcy question

[CGRAY]

What is the name of your state (only U.S. law)? AZ
Here is the situation. Had been hoping wife and I could be amicable about everything but those efforts failed. She went behind me and filed for divorce on her own and the papers I was just served with have her demanding that I assume all debts between us (appx 22K), she cllaim both both minor children on tax, $750/mo child support and $350/mo spousal support for 5.5 years. My major concerns are:
1. Intially, we had determined that a joint bankruptcy would be best for us. Now apparently, she is under the assumption that she can get away with throwing all debts on me(which I wouldn't think would fly in court assuming it ends up getting there). If I were to do a bankruptcy now, would I still be accountable for the debts thru court order on her behalf or would the bankruptcy protection supercede that? If i did this, I think she'd either eventually file bankruptcy herself or have her father pay the debts. I am assuming it would be a couple years before this divorce matter would even make it to court and the debts would be resolved one way or another before divorce proceedings were completed.
2. Am I really accountable for spousal support? According to the papers, the rationale behind it is that 1. I can afford to do so and 2. she contributed to my education. Both of these issues are false. If I pay everything that she is wanting, I'll have to get a second full-time job in order to do so. As for education, the VA paid tuition in compensation for a service-connected disability. I acually had a living expense stipend along with it in which she shared proceeds from as well as I was also working full time during education. She has been and is working now and makes roughly $5K less than I. $350/mo for 5.5 years sounds outrageous to me.

There are many other concerns, but these two are my major ones. I am sure I will have no choice but seek legal representation if she can not come to her senses. In the meantime, any advice as to these 2 issues would be greatly appreciated.

 

[mistoffolees]

What is the name of your state (only U.S. law)? AZ
Here is the situation. Had been hoping wife and I could be amicable about everything but those efforts failed. She went behind me and filed for divorce on her own and the papers I was just served with have her demanding that I assume all debts between us (appx 22K), she cllaim both both minor children on tax, $750/mo child support and $350/mo spousal support for 5.5 years. My major concerns are:
1. Intially, we had determined that a joint bankruptcy would be best for us. Now apparently, she is under the assumption that she can get away with throwing all debts on me(which I wouldn't think would fly in court assuming it ends up getting there). If I were to do a bankruptcy now, would I still be accountable for the debts thru court order on her behalf or would the bankruptcy protection supercede that? If i did this, I think she'd either eventually file bankruptcy herself or have her father pay the debts. I am assuming it would be a couple years before this divorce matter would even make it to court and the debts would be resolved one way or another before divorce proceedings were completed.
2. Am I really accountable for spousal support? According to the papers, the rationale behind it is that 1. I can afford to do so and 2. she contributed to my education. Both of these issues are false. If I pay everything that she is wanting, I'll have to get a second full-time job in order to do so. As for education, the VA paid tuition in compensation for a service-connected disability. I acually had a living expense stipend along with it in which she shared proceeds from as well as I was also working full time during education. She has been and is working now and makes roughly $5K less than I. $350/mo for 5.5 years sounds outrageous to me.

There are many other concerns, but these two are my major ones. I am sure I will have no choice but seek legal representation if she can not come to her senses. In the meantime, any advice as to these 2 issues would be greatly appreciated.

While it's a little counter-intuitive, if you agree to take on debts as part of the divorce process and then the debts are wiped out in a bankruptcy, you could STILL be held accountable under the divorce decree - but typically only if your ex's name is on the debt. The logic is that her credit rating would be harmed because you didn't pay the debt you agreed to pay. If only your name is on the debt, she wouldn't have grounds to come after you.

You didn't say how long you were married. That will be a major factor in determining how long you'd be paying alimony (if at all).

The fact that VA paid for your education doesn't mean that she didn't support you during your eduction. Did the living stipend cover ALL your costs? If not, she was providing some of your support while you were in school. That could enter into the assignment of alimony. It would not affect property division in AZ because AZ is a community property state (all the debts and all the property are considered to be equally split between the two of you).

The thing to keep in mind is that she can ask for whatever she wants - that doesn't mean she will get it. My ex's initial 'request' was for 10 years of alimony which exceeded my gross income each year. Obviously, she didn't get it. Given that it's a community property state and the fact that your incomes are pretty similar, you might be better off to simply let the court decide. Still, it might be worth trying mediation. A good mediator would explain the divorce laws to her and maybe get her to be more reasonable.

 

[CGRAY]

Thanks for a quick reply. We were married for 14 years. The bulk of our debt is held under both our names. I'm not extremely knowledgable with bankruptcy, but was under the assumption, on a joint account, if I were to do it, the creditors would come after her instead. This would force her hand to either use a relative to pay, or hopefully, file herself. She has no prospects of financial gain down the road. She is happy with her small salaried position (even though she complains everyday about it) and will never try to advance herself. She is waiting for her father to pass so that she can collect a large inheritance then. Knowing that, I dont know why she doesnt do a bankruptcy. She will never be able to afford a new home or vehicle with the way things are now and she fully knows that she is just going to tread water until inheritance time.

As for the education deal, does it not make a difference that during the bulk of the time i was in school that I was working fulltime and she was not working? I understand that the term "contributed" could be broadly interpreted, but with her not working at the time, my income probably would not have been sufficient without the additional stipend granted by the VA.

Mediation sounds like a good idea. Hopefully, I can talk her into it. Previously, before she went behind my back and filed, I had been willing to pretty much give her most joint assets, continue her on my health insurance, keep vehicle insurance and cell phone accts combined just to be nice and help her out. But now, I have little desire to help her at all. Hopefully, I can get her to realize that her expectations are unreasonable. At the very least, all community debts will be shared. There is no way I can see that she will be able to get away with it. And hopefully, I can't see justification for the spousal support as well. She is the one pushing for this seperation in the first place. I have made every reasonable effort to seek counseling and work this out. (BTW, the papers served state that we were unable to resolve our differences thru conciliation services and that never happened. She would not allow me to attend meetings with her psych. Not sure if this matters.)

 

[mistoffolees]

Thanks for a quick reply. We were married for 14 years. The bulk of our debt is held under both our names. I'm not extremely knowledgable with bankruptcy, but was under the assumption, on a joint account, if I were to do it, the creditors would come after her instead. This would force her hand to either use a relative to pay, or hopefully, file herself. She has no prospects of financial gain down the road. She is happy with her small salaried position (even though she complains everyday about it) and will never try to advance herself. She is waiting for her father to pass so that she can collect a large inheritance then. Knowing that, I dont know why she doesnt do a bankruptcy. She will never be able to afford a new home or vehicle with the way things are now and she fully knows that she is just going to tread water until inheritance time.

As for the education deal, does it not make a difference that during the bulk of the time i was in school that I was working fulltime and she was not working? I understand that the term "contributed" could be broadly interpreted, but with her not working at the time, my income probably would not have been sufficient without the additional stipend granted by the VA.

Mediation sounds like a good idea. Hopefully, I can talk her into it. Previously, before she went behind my back and filed, I had been willing to pretty much give her most joint assets, continue her on my health insurance, keep vehicle insurance and cell phone accts combined just to be nice and help her out. But now, I have little desire to help her at all. Hopefully, I can get her to realize that her expectations are unreasonable. At the very least, all community debts will be shared. There is no way I can see that she will be able to get away with it. And hopefully, I can't see justification for the spousal support as well. She is the one pushing for this seperation in the first place. I have made every reasonable effort to seek counseling and work this out. (BTW, the papers served state that we were unable to resolve our differences thru conciliation services and that never happened. She would not allow me to attend meetings with her psych. Not sure if this matters.)

If the debt is in her name as well as yours, then the creditors almost certainly would go after her if you filed for bankruptcy - and she would have reasonable grounds to go back on you - so the bankruptcy would not be particularly effective.

Support is exactly that - support. If you were working full time while you were in school and she was not, then it's going to be hard for her to argue that she supported you during your education.

With a $5 K difference in salaries, it's not likely that she'd receive very much in alimony, although she could get some. If she does, 5.5 years is on the long side, but not ridiculous for a 14 year marriage.

The fact that she lied on the papers she submitted about conciliation services doesn't really have any impact. You could challenge it and get the court to order mediation/conciliation, but she can just sit there shaking her head. You'd be out the cost of challenging it and the cost of mediation with no gain. If she really were interested in talking, you can do that even without challenging her documents. That is likely to be one of those battles better left unfought.

 

[CGRAY]

Thanks again for quick response. I messaged her suggesting mediation and implied that she was being unreasonable. Suggested she speak to atty (I think she has only seen paralegal up to now as well as her father who is a major "sea lawyer" <assuming you are familar with the term>). Hopefully, she hasn't spoke to an atty yet and upon doing so, she will see that her damands won't fly and going to court will cost us both money and result in her getting less than she would by just being civil. I'm sure there will be custody issues to work out as well. Because of my job at present, she pretty much has me by the balls right now (I am currently working 4.5 hours away and have to leave for 6 mos soon and upon my return, will be practically unable to enjoy a large amount of custody for at least a year).

 

[nextwife]

Consider accepting 100% of debt IF you also get a commensurately greater amount of marital assets. Insist on alternating years on taxes.

How long were you married, and how much does she/can she earn? It's patronizing to presume that having a uterus is sufficient reason to need to be supported.

 

[mistoffolees]

Consider accepting 100% of debt IF you also get a commensurately greater amount of marital assets. Insist on alternating years on taxes.

That doesn't help - for the reasons discussed earlier in this thread.

If he accepts 100% of the debt and then files for bankruptcy, then the creditors will go back on her - regardless of what the divorce decree says. That would give her grounds to sue him and demand that he pay the debt - effectively negating the bankruptcy.

Since their salaries are similar, alternating taxes (I assume you mean the deduction for the children) might be a good idea. However, they might want to look into it a little deeper. It might be better for one person to get the deduction all the time and then adjust the child support payment to adjust for that (of course, that would require them to be able to agree on things which might be an issue).

 

[CGRAY]

Consider accepting 100% of debt IF you also get a commensurately greater amount of marital assets. Insist on alternating years on taxes.

The liquidity of assets don't compensate for the debt unfortunately. The only other option would be seek reduced child support in exchange and that would not be in the best interests of the children.

How long were you married, and how much does she/can she earn? It's patronizing to presume that having a uterus is sufficient reason to need to be supported.

14 years. Cumulatively, earnings overtime were fairly equal, if not in her favor.Right now, 4-5K difference in my favor as of Feb 2009. Would it be a crazy idea for her to claim one and me claim the other?

Spoke to attorney over the phone today to setup consultation next week. I work out of town from where divorce was petitioned. Over the phone, when told of everything she is wanting, his reply was that she is not very realistic at all. Since money is very tight on my end, and she is reaching into daddy's bottomless pockets, I'm at extreme disadvantage. Hoping attorney will accept small retainer and accept allotment setup to compensate. My work is now with Fed Govt so paycheck is fairly secure.
Seems like she has only spoken to paralegal so far so hopefully, she'll take my advice and speak to actual attorney and decide to comply with a mediator. If forced to hire attorney and go to court, I'll fight for everything I can get my hands on to compensate myself for the trouble. Would much rather it not come to that.

 

[Ronin]

Filing for bankruptcy if you are employed will no longer zero out your debt as it used to, and you will still be obligated to repay a portion of that debt.

So, unless the amount of debt you are actually relieved of is really big, the downsides and ripple effects of a bankruptcy will almost surely far outweigh any short term benefits.