Court-ordered child support payments are strictly enforced, and failure to pay on time – or skipping payments – has serious consequences. Child support debt consolidation is an option, preventing you from paying steep interest rates, or facing some of the more dreaded results of getting behind in your payments, including: 

• Suspension of your driver’s license 
• Legally enforced payback interest rates of 10% or more (paid to the child support recipient) 
• Wage garnishment 
• Tax return garnishment 
• Property and/or asset seizure 
• An outstanding warrant for your arrest 
• Jail time 

While it can feel like child support enforcement is out to get you, the system is equally rigged in favor of child support debtors getting back on track. 

Determine If Child Support Debt Consolidation Is The Best Option For You 

Debt consolidation can be a solution, clearing the money you owe (child support arrears), to get you back on track. However, it’s not always the best solution.  

Continue making payments on time 

Keep in mind that you are legally responsible for continuing to make monthly child support payments while a debt consolidation loan is pending. Skipping on payments while waiting for the loan to come through can backfire if you owe thousands more than the debt covers when the loan finally funds. 

Is there a family member willing to provide a low-interest loan? 

Both the interest charged by Child Support Services and the interest charged for most unsecured loans is on the higher side.  

• In California, and here in the Bay Area, the standard interest rate charged by the state for child support arrears is 10%.  
• The average interest rate for a consolidated loan is 8% to 28%, depending on your credit history. 

You may find that taking a loan from a family member or friend, drawing up the paperwork, and deciding on a slightly lower interest rate is the happier medium. 

Secure fixed-rate loans at rates that are higher than what the state charges 

If your child support debt consolidation loan has an introductory rate of 8% but comes with an APR (adjusted percentage rate), you have no control over the amount the interest will raise over the course of the loan term. So, while the original 8% rate feels like a deal, you may wind up paying twice that – or more – over the ensuing months or years.  

It may be worth it to work with the county where the child support order originated – or where the petition to collect back owed child support was filed. They are willing to work with you directly to come up with a reasonable payback plan, and their fixed interest rate may save you money overall. 

Have you looked into child support modification? 

California is known for having higher-than-average child support payments because the state uses an amount per child driven by both parents’ joint income, rather than a fixed “cost per child” amount.  

However, this also means the amount you owe is fluid to a certain point. If your child’s other parent gets raises or bonuses, those need to be reported, as do yours. The same is true if a person makes notably less money than they did when the divorce and child support orders were filed. 

Visit the Child Support Services website, where you can use the online calculator to estimate current payment obligations, speak with a free family law specialist, or begin the process to request a child support modification. The child support recipient is equally obligated to help with this process (the county will take it over if s/he isn’t cooperative) by providing their most recent paystubs and/or tax information.  

If you know s/he is making money under the table, the combination of a private investigator and some well-timed surveillance can result in evidence that not only lowers your payments but results in the other parent having to pay you back with interest. 

Does bankruptcy clear child support debt? 

No, Chapter 13 bankruptcy does not clear child support arrears. Child support debt is considered a “priority debt,” and it will be added into your Chapter 13 priority debt repayment plan – including the state’s additional 10% interest rate. 

Keep this in mind because knowing that may mean that filing bankruptcy will do more harm than good for your overall financial situation. 

If the stress of child support debt is weighing you down, or you’re tempted to bury your head in the sand, it’s time to contact a family law specialist and schedule a consultation. We can help you sort out exactly which plan makes the most sense for getting you back on track, and we can facilitate your request for child support modification. 

We’re Here To Help You

Contact us here at Gerald A Falzone,  to schedule a child support debt consultation, so we can work together to find a solution. We have two convenient office locations – Oakland (510) 521-9500, and San Rafael: (415) 482-7800.

California is considered a community property state, which means all properties and assets acquired after the marriage takes place are considered evenly shared between both parties. When the marriage is dissolved (referred to as a divorce or dissolution of marriage) those properties/assets are divided jointly.

Annulments are very different than a divorce. When a marriage is annulled, it is as if that marriage never took place at all. Once the annulment goes through, there is no legal record of the marriage, and neither party is beholden to any of the laws pertaining to a legal marriage or divorce. For the most part, properties, assets, financial holdings gained individually during the marriage, etc., return back to their pre-marital status.

We recommend reading our post, Annulment of Marriage, to learn more about the ins-and-outs of marriage vs. annulment. You may find that your marriage does not qualify for an annulment, in which case you’ll need to pursue a divorce, and property and assets may be divided after all.

The Basics When It Comes To Property Division

How Annulment Differs from Divorce (or a Dissolution of Marriage)

First and foremost, it’s important to know that annulment isn’t an option for all. The courts only grant an annulment if, there is evidence of fraud that led or induced an individual to get married in the first place:

• Bigamy (one or the other is already legally married to someone else)
• Incest (the individuals are too closely related by blood in accordance with the state’s laws)
• One or both of the parties were married by force
• There is a physical incapacity to consummate the marriage
• One or both of the individuals are 17 years old or younger
• One or both of the individuals are of unsound mind
• Someone was intoxicated at the time
• Domestic violence and/or substance abuse is discovered within 6 months of the marriage date

If you feel your marriage qualifies for annulment, we recommend consulting with an experienced divorce attorney in your area to make sure before moving forward.

Property Division in an Annulment

Assuming your marriage qualifies for an annulment, your assets, retirement plans, properties, etc., you held before you were married automatically return to their original owner/holder. Because most annulments take place within a relatively short time after the marriage, it is relatively easy for the divorce to facilitate their division between both parties.

If, however, you have been married for some time, and have acquired assets or properties together while you were married, things become more difficult. In this case, an experienced divorce attorney is your greatest asset when determining what belongs to who.

Also, the longer a marriage has gone on prior to an annulment, the more likely a court may order temporary alimony if one spouse was dependent on the other for income or financial support. Similarly, the court may order temporary child support for “step-children” to eliminate any chance that innocent parties are negatively impacted by the loss of financial stability. Even so, these orders are typically only temporary, granted for the length of time the court feels is required for the individual to get back on his/her feet and begin earning an income again.

Because the division of jointly held properties, financial assets, a jointly held business, and other assets is so complicated, it is generally recommended that both parties hire an attorney if there is any disagreement about property division.

Child Custody Issues are Handled Separately

If any children were conceived by you and your spouse, or your recently annulled marriage, your state’s child custody laws will dictate how legal and physical custody, visitation, and child support payments are handled. Whether or not your marriage was annulled will have zero effect on how child custody is handled because the law protects a child’s well being above all else.

If there is a question pertaining to the paternity of your child(ren), we recommend visiting our post, What You Need to Know About Paternity Law in California.

Have You Considered Mediation to Settle Your Annulment?

Have you considered mediation, rather than court-based annulment proceedings? Mediation via a professional law professional is a cost-effective – not to mention an emotion-effective – way to settle an annulment.

Mediation can save you thousands of dollars and can prevent things from becoming emotionally ugly. A mediator will explain the law surrounding asset and property distribution during annulment vs. divorce and can offer input as to how the court is most likely to decide things if you pursue your case in court. Mediators are completely neutral parties, which help to de-escalate high tension and emotions.

We’re Here For You

The compassionate team here in the Law Offices of Gerard A. Falzone is here to answer questions pertaining to property divisions in both annulments and divorce. We can serve as mediators or can represent you in court when you need strong and effective support. Contact us to schedule your free consultation.

California is considered a community property state, and a privately owned business is part of that property’s assets. If your spouse owns his/her own business – it may be considered part of the community property, or not, depending on the situation.

If you’re pursuing a divorce and your spouse owns a business, we highly recommend you consult with an experienced family law attorney, rather than relying on blogs or online sources for your answers. Every business is unique, and complex factors affect what – if any – share of the business you have an interest in, as well as whether or not your share of the business is worth fighting for.

Here are some general considerations for anyone facing a divorce where a spouse’s business is in the picture:

When did your spouse establish the business?

If the business was owned by your spouse prior to your marriage, you may not be entitled to an entire 50% interest. It may be that the court determines the entire business – or a larger portion of it – belongs to your spouse.

What funds were used to establish the business?

If the funds came from the two of you, that’s one thing – community property. However, if the initial funds came from elsewhere, or was money your spouse already had in savings before you were married (not considered community assets), then you may be entitled to less than you think when all of the financial analysis is complete.

Is there are prenuptial or postnuptial agreement in place?

If you and your spouse drafted a prenuptial agreement to protect his/her business in the case of a divorce, you may not be entitled to any of it. However, these agreements are often contested during a divorce, especially if:

• You weren’t represented by your own lawyer
• You’ve determined your spouse hid assets or business interests from you when the agreement was drafted
• The agreement was drafted the week or night before you were married, rather than in a more methodical, timely fashion
• Your lawyer finds clear loopholes that slipped by the original lawyers

So, while the prenuptial agreement (prenup) may prevent the business – or a particular share of it – from ever becoming yours, it may also be that the loopholes or shortcomings of the prenup work in your favor.

Did the business’s equity or profitability grow during your marriage?

Even if your spouse protected his/her share in the business before you were married, any increase in the business’s overall value over the course of your marriage is considered community property. Therefore, you are entitled to 50% of that appreciation.

Did your spouse take a salary, or did s/he roll profit back into the business?

If you didn’t benefit financially from the business via your spouse’s competitive salary, because s/he rolled any extra funds back into the business, you may be entitled to more than half of the business since 50% of re-invested funds were actually yours.

How involved were you in the business?

The more involved you were in the business – helping to set it up, participating in decision making, working there, etc., the more shares of the business you may be entitled to.

What is the business’s professionally assessed value?

While the questions listed above can paint a better picture as to whether you’re entitled to your spouse’s business in a divorce, there are additional considerations as well. One of these is the business’s value – and that is assessed professionally. Forensic accountants perform this type of work – assessing the business’s debt to asset ratio.

If your spouse’s business still has considerable debt, that decreases it’s overall “value,” and you may determine you are just fine with allowing him/her to keep the business.

Is your spouse willing to relinquish his/her share of other assets?

If it’s the financial portion of the business’s value that matters most to you, and you aren’t interested in the business itself – there are other ways to divvy up the assets. Sometimes, a business owner is willing to give up his/her share of other shared assets (the house, car(s), retirement account(s), other property, etc.), in which case you can forgo your share of the business and recoup the value by retaining a greater share of other joint assets.

If you’re on the same page about most of the divorce decisions, but things are getting sticky around the business, we recommend meeting with a mediator to see if you can come to a mutual decision without having to go to the more costly, time- and energy-consuming court process.

There Are 3 Ways Private Businesses Are Handled During Divorce

If the court determines that you are entitled to any portion of your spouse’s business, there are three ways to handle it:

1. You become business partners

Often the least desirable outcome, we have also seen cases where ex-spouses become business partners, and the business remains as is with both spouses at the helm. Obviously, this is not the best solution for most couples, particularly if you weren’t emotionally or professionally involved in the business and have your own work and/or source of income.

2. Your partner sells the business

Depending on the situation, you may determine that selling the business is the best solution – particularly if one or the other of you is unable to buy the business from the other spouse, or your spouse is unwilling to grant more of your other shared assets to you, selling the business and splitting the proceeds might be the best way. Keep in mind that this can significantly slow down divorce proceedings if the business doesn’t sell as soon as you’d like.

3. One of you buys the other one out

Once the business’s value is determined, one of you buys the other one out at 50% of the value. This can be a no-brainer solution if you aren’t interested in the business, and your spouse has the means to buy it via cash or a third-party loan.

Again, your best bet is to hire a lawyer to review your options before making any final decisions about whether you are or are not interested in a share of your spouse’s business.

We’re Here To Help You

My name is Gerard Falzone and I am an experienced Bay Area family law specialist. My goal is to help my clients navigate their divorce proceedings without unnecessary angst, animosity, or drama. Contact my office to schedule a consultation at (510) 521-9500.

Every year, more than 800,000 couples throughout the U.S. decide that they want to get a divorce.

Deciding to get a divorce is never easy, nor is it easy to tell your spouse that that’s what you want.

Have you been putting off having this conversation for weeks, months, or even years? It’s a hard conversation to have. The sooner you do it, though, the sooner you can move forward with your life.

If you’re ready to tell your spouse, “I want a divorce” but aren’t sure how to go about it, keep reading.

Listed below are some tips that can make the conversation a little easier.

Be Honest With Yourself

Before you sit down and tell your spouse that you want a divorce, it’s important to know that this is truly what you want.

Once you throw out the “D” word, your relationship to your spouse will change. Don’t say it unless you really mean it.

Knowing whether or not a divorce is right for you is tricky, to say the least.

Be brutally honest with yourself about your desire for a divorce. You may also need to enlist the help of a therapist or counselor to help you figure out whether you want to proceed or not.

Consider Your Spouse’s Current State

Think about your spouse and how they’re feeling at the moment.

Do they seem blissfully ignorant and unaware that you’re unhappy? Or, is it clear that they’re unhappy, too?

Knowing where your spouse stands can help you decide the best way to broach the subject of a divorce.

Choose The Right Time And Place

No matter what your spouse’s current state is, there is definitely such a thing as a good time and place to talk about your desire for a divorce.

Do not bring it up ten minutes before you have to leave for work or while you’re out grocery shopping. Plan ahead for the conversation.

It may seem impossible, but you should try to choose a time and place when your spouse will be most receptive to your comments.

At the very least, plan to discuss it when you both are least likely to be stressed and will have the time to talk things out.

Choose Your Words Carefully

There’s also a right and wrong way to tell your spouse that you want a divorce. 

No matter how fed up you are with the marriage, there’s no need to be cruel. Remember, too, that the words you use will have an effect on the way they react.

If you choose the right words and avoid placing blame on them for your problems, you’re more likely to have a productive conversation. This isn’t always the case, of course, but choosing the right words can definitely help.

Work with a counselor if necessary to figure out what you’re going to say beforehand.

Be Firm Yet Gentle

It’s not just about the words you say. It’s also about the way you say them. Make sure that your tone is firm, yet gentle.

Be clear about what you want. Don’t hedge or try and sugarcoat things. At the same time, though, there’s no need to be overly blunt or aggressive.

You may want to practice expressing your desire for a divorce before you sit down and have the conversation. That way, you can make sure you’re using an appropriate tone. 

Prepare For Their Reaction

In addition to preparing your remarks, you also need to prepare for your spouse’s reaction to those remarks.

Do you think they’ll take it well and agree with you and your concerns? Will they cry or get angry?

No one knows with total certainty how they’re going to handle those situations. It’s a good idea to consider several different possible reactions so you can be prepared no matter how your spouse responds.

Take Safety Precautions If Necessary

Is there a possibility your spouse will become violent when you tell them that you want a divorce? If so, it’s important to take precautions to keep yourself safe.

Consider having the discussion in a public place where your spouse is less likely to make a scene.

If you prefer to talk in private, at least make sure that someone knows where you are and when you’re going to have the conversation. That way, they can come and check on you or be waiting on standby just in case. 

It might be a good idea to have your cell phone handy with 911 pre-dialed before you begin the conversation.

Don’t Discuss The Details Yet

Immediately after you announce that you want a divorce is not the proper time to go over custody issues or other details.

There will be plenty of time for that, and it’s best if you can have those discussions after you’ve officially filed for divorce and have a divorce lawyer or mediator present.

If you discuss details now, when emotions are running high, you’re more likely to act rashly and may say or do things that you regret later on.

Don’t Involve Your Kids

Finally, don’t get your kids involved.

They shouldn’t be present during the discussion and you should do your best to keep them out of the conversation. This is an issue between yourself and your spouse.

Your kids will have to know about the divorce eventually, but they don’t need to be present at this time.

This rule applies whether your kids are adults or are young and still living at home.

What To Do After Saying, “I Want A Divorce”

After you have the hard conversation and told your partner, “I want a divorce,” it’s important to have a plan in place for how you’re going to proceed.

It’s good to have already hired a lawyer, too.

If you live in or around the Bay Area, contact the Law Offices of Gerard a Falzone today.

We make it easy for you to set up a free phone consultation so we can learn more about your case and help you figure out the best course of action.