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DuPage County divorce attorneyEven if you and your spouse own significant assets, you may experience financial difficulties after your divorce. This can occur because of large costs during the divorce process, due to wasting or dissipation of assets by one spouse, or because you have trouble covering your ongoing expenses on a single income. The situation can become even worse if the IRS informs you that you owe money based on tax returns that were filed while you were married. Fortunately, you may have options for addressing this issue and ensuring that you will not be penalized for your spouse’s actions.

Understanding Post-Divorce Tax Debts and Innocent Spouse Relief

Both you and your ex-spouse are responsible for taxes on any joint tax returns you filed while you were married. This means that if the IRS decides to audit you based on any of these tax returns and it determines that taxes are owed, it can take action to collect the amount owed from both you and your spouse. Even if your divorce decree states that your spouse will be solely responsible for these tax debts, the IRS can disregard the court’s orders in these matters and collect money from both of you.

However, if errors on your tax returns were the sole fault of your ex, you may be able to avoid liability through innocent spouse relief. To qualify for relief, you will need to show that any underpayment of taxes occurred because of errors made by your ex-spouse on a joint tax return. At the time you signed the tax return, you must not have known or have had any reason to know about these errors. If the IRS determines that the tax debts are the fault of your ex-spouse and that it would be unfair to hold you responsible for these errors, you will not be required to pay these debts.

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DuPage County family law attorneyEvery year, we publish dozens of blogs about a wide variety of topics related to divorce and family law. Our goal is to provide people with helpful information about issues that they may need to address when getting divorced, settling disputes over marital property or child custody, or handling other matters in family court. Our most popular blogs that people have read over the past year have covered many areas of the law and other issues that affect families, and we encourage you to read these articles and share them with those who may find them helpful:

  1. When You Can Extend Child Support Beyond Age 18 - We look at when divorced parents may be required to contribute to their children’s college expenses or provide other forms of financial support.

  2. Remarriage Can Affect Child Support Payments - While child support payments are typically based on parents’ incomes, in some cases, a parent’s marriage to a new spouse may affect the amount they will be required to pay.

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Naperville IL divorce attorneyFor some couples, the idea of planning for divorce seems downright unnecessary. Not everyone sees the end of their marriage coming, even when it has been unraveling for some time. It is easy to remain in denial or to be so swept up in work, friends, and other activities that you do not realize the marriage is over until the warning signs are unmistakable. Marriages can end suddenly, and when they do, couples are often left to race around and pick up the pieces, with little to no preparation at all. 

How to Start Preparing for an Illinois Divorce

If you were not expecting your relationship to end so abruptly, you may be left with little choice but to face the music and begin chipping away at the filing process. Even the most peaceful splits entail a great deal of work from both parties. From arranging parenting plans and discussing possible spousal maintenance to dividing assets and planning for relocation, your hands will likely be full as you are thrust into the separation experience.

If you, like many spouses, feel blindsided by your suddenly imminent divorce, you can make the filing process as efficient as possible by making the following preparations:

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DuPage County divorce attorney asset division

Financial struggles are cited as one of the most common causes of divorce. Heavy debt and being unable to pay the bills is stressful, which can damage the couple’s relationship. Monetary troubles can also highlight the spouses’ conflicting spending and saving habits. Bankruptcy is one way that a couple may try to resolve their debts and get a clean start, but it may not be enough to save a marriage that has crumbled under the stress. If you are considering both divorce and bankruptcy, you should understand how the two could affect each other. 

Should Divorce or Bankruptcy Come First?

It would be chaotic to file for divorce and bankruptcy at the same time. Not only would you be juggling two major court cases, but most of your marital assets would be tied up in the bankruptcy. Which you file for first may depend on these factors:

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Naperville divorce lawyersMost divorces require at least one of the spouses to find a new place to live. If you know you will not keep the marital home as part of the division of property, your housing search will be one of your top priorities. How do you begin such a search? How will your divorce affect your search? How do you know what is the right home for you? Here are three important tips for finding a new place to live during and after your divorce:

  1. Choose Something You Can Afford: Your housing expenses will be a key component of your post-divorce budget. Whether you are paying rent or a mortgage, your new home must fit within that budget. Determine what you can afford to pay each month, given your income and expenses. Keep in mind that you may have continued expenses related to your divorce, such as child support and spousal maintenance. On the other hand, receiving spousal maintenance may help you afford a better living situation.
  2. Consider Where You Want to Live: Many divorcees have ties to their current area, whether it is their work and social life or their children. You may need to limit your housing search to somewhere that is reasonably close to your children’s primary home if you want to be a regular and active part of their lives. However, divorce is also a chance to start over somewhere new. You may be free to pursue a new job or move to a place where you have wanted to live but could not while you were married. Some divorcees want to move closer to their families if they feel no connection to where they have been living.
  3. Make Sure You Are Compensated in Your Divorce: Illinois divorce law practices equitable division of property, meaning spouses are required to divide their marital properties in a way that is fair but not always exactly even. Your marital home may be the most valuable asset in your divorce agreement. If your spouse is keeping the house, it is reasonable for you to request other valuable assets in return. This could even mean protecting marital properties that you otherwise would have to share, such as your retirement benefits or business interests.

Contact a DuPage County Divorce Lawyer

The assets you receive in your divorce agreement will help determine where you can afford to live following your divorce. By working with a Naperville, Illinois, divorce lawyer at Calabrese Associates, P.C., you can negotiate an agreement that gives you the financial resources you need to start your new life. To schedule a consultation, call 630-393-3111.

 

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Ways Women Can Be Financially Unprepared During DivorceA financial literacy gap between spouses can cause problems when you are trying to support yourself after a divorce. If you are unsure of how to use your divorce to secure your financial future, you need to address the issue with your divorce attorney and a financial adviser before you start the negotiations. Traditionally, women were at a disadvantage when it came to financial literacy in a marriage. That has changed in recent decades as more women are in charge of or share responsibility for their marital money. However, a recent survey conducted by Worthy and the Association of Divorce Financial Planners found that some divorcing women are still uncertain about their personal finances:

  1. Few Women Used Financial Planners: Only six percent of the women who answered the survey said that they used a Certified Divorce Financial Analyst during their divorce. Sixty percent were unaware of CDFAs, and 30 percent could not afford one. This does not mean that they were without any financial advice because attorneys can help their divorce clients with financial planning. However, 61 percent of the women said it would have been valuable to work with a financial planner in addition to their attorney. 
  2. Women Were Less Confident About Finances Outside the Household: More than half of the women said that they had enough knowledge to make informed decisions about household expenses, health insurance, debts, and dividing assets. If they had children, they also considered themselves knowledgeable about child-related expenses. They were more likely to say that they were unfamiliar with spousal maintenance and taxes. To be fair, most people do not have a reason to be familiar with spousal maintenance while they are married.
  3. Many Women Did Not Have a Plan to Replace Maintenance Payments: Thirty-five percent of the women said that they receive monthly support payments, and 42 percent of those women said that they have not planned for how they would replace the income from support payments if they end. Even if you are receiving permanent spousal maintenance, you may need a backup plan if your former spouse dies or loses a significant portion of their money. Plans could include increasing your work income, cutting down on your living expenses and selling luxury items.

Contact a DuPage County Divorce Lawyer

Financial planning is an important consideration for everyone because of the ways that divorce can affect your savings, disposable income, and retirement benefits. A Naperville, Illinois, divorce attorney at Calabrese Associates, P.C., can work with a financial planner to help you with your post-divorce finances. Schedule a consultation by calling 630-393-3111.

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