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Equitable distribution insights welcomed

heathenchristian posted 4/26/2020 09:10 AM

So I'm worried that I will be held partially responsible for stbxh latest school loan. I feel so screwed right now. He is such a jerk, still playing victim even though he took out 401k loan right before I filed. He hasn't used his degree. Still in same position. I am hoping that when it comes down to it, I can walk away with my debt, he walks away with his. He hasn't even provided all his financials. I want to see where all his $ went. If I had to turn mine over he better do so as well. He makes twice as much as me. He will be living with his mom and/or gf....so no rent or mortgage. I'm the one still getting screwed here, no matter what. I'm trying to make sure to stay in area so our child can go to school with friends...he doesn't seem to get that, that it is important to the child to remain with friends.

Phoenix1 posted 4/26/2020 14:45 PM

Was the school loan incurred during the marriage? Does your state recognize dissipation of marital assets (i.e., the 401k loan, depending on what it was used for)?

TrustedHer posted 4/29/2020 18:06 PM

Illinois sucks. Big time. "Equitable" is a joke.

You need your lawyer involved.
If you co-signed the loan, you're probably on the hook.

It may end up being marital debt anyway.

And in the end, the judge is a dictator who can ignore the "equitable" part and decide whatever she wants.

If you're lucky, you'll get a man-hating judge like I did. That would work in your favor the same way it worked against me.

Once again, you need a good lawyer to navigate this minefield.

heathenchristian posted 4/29/2020 19:18 PM

You need your lawyer involved.
If you co-signed the loan, you're probably on the hook.

I did not sign anything and he got some reimbursement from his company.
My lawyer/paralegal are involved...we just haven't gotten that far yet in the process yet.
My lawyer was highly rated, I even verified reviews with actual cases from court records to make sure her clients reviews were actually her client cases.
Edit: our judge is male

[This message edited by heathenchristian at 7:20 PM, April 29th (Wednesday)]

CallingSpades posted 4/29/2020 20:34 PM

Even with a male judge, you could do ok. Mine is very conservative and hates infidelity. Do you have proof if needed?

Division of assets here (PA) is mainly based on childcare responsibilities, income and need. STBX makes 3x what I do! And I have the kids 100% of the time just due to circumstances. My attorney thinks I'll reasonably get a 60/40 split in which I take 60% of assets, 40% of debt - and this is for things like mortgage and car loans which are definitely marital debt, not for some personal loan you've never seen a dime of. Also he's responsible for 66% of expenses under an existing agreement for child and spousal support, and I'm asking he pay legal fees and counseling. I was not unhappy with the final (proposed) amount.

So I think you could get a reasonable share if you make sure debt distribution is skewed appropriately. If that loan has to be included, maybe try asking to take on the smallest percentage possible of all debts. Equitable isn't equal.

Still, if it's a large loan and he can't account for where it went, it might be reasonable to hire a forensic accountant. It seems pretty clear that it was not used (or taken out with the intent) to benefit the marriage.

heathenchristian posted 4/30/2020 20:46 PM

So his school loans are about $50,000 combined...Prior to marriage about $25k and the one during the marriage about $27k. The one prior to marriage I agreed when we refinanced our HELOC to include the school loan...lower rate. Stupid on my part I guess, cause I will probably be held accountable.
His current 401k was probably taken out to pay for the divorce and his bills...but he pretty much drained our childs savings acct to $23 when it had over $300 in it.... he said he needed it to pay bills. but according to his financial affidavit there was over $10k in his savings acct.
Plus in 2018 he went out and bought new car for $26k...that has sat in the garage for the past 2 yrs basically. I mean he is the one who will be living with OW/GF or his mom for little to no rent I am sure.
I found his application for the most current school loan and I am not a co-signer.
I found some cc receipts for things he bought during marriage he can't claim as non-marital. I am willing to let that go for not being responsible for the school loans.
I'm going to fight to the end as best as I can. It is all I can do.

Phoenix1 posted 4/30/2020 23:41 PM

Disclaimer: Your attorney will know best for your state, and I am only speaking about my experience in my state with regard to equitable distribution.

Equitable distribution means fair, not necessarily equal, and anything (both assets and debts) acquired during the marriage is included (some inheritances can be excluded). Because of this, since you refinanced the first student loan with the HELOC during the marriage, you are likely on the hook. Same for the second student loan since it was acquired during the marriage, whether you signed the document or not. He could argue that his education gained from that loan benefited the marriage. Obviously, there are a lot of possible facets to such an argument. I'm speaking in general terms. And, of course, arguing in court or through attorneys can get very expensive.

That new car sitting in the garage? You are entitled to half the value as a marital asset (look up NADA/Kelly Blue Book value), as well as any other vehicles.

You can also demand an accounting of the money taken out of the 401k, but if it was spent in cash, he will probably lie and it will be difficult to prove anything.

My state allows for recouping assets that were dissipated. For example, if money was squandered on entertaining/supporting his side pieces I would have been entitled to half as it was marital money spent.

So, with all that, you have to determine a game plan of what you *really* want out of the settlement. Then negotiate accordingly to try to get it. What do I mean by that?

I'll use my case. Xhole dissipated easily in excess of $50,000 on one of his OW alone over a 15 year period. And I could prove it. I kept that info in my back pocket for the time being.

What I really wanted was the marital home and all equity (he squandered all liquid assets). But I also knew he wanted all the recreational toys and his firearm collection. Those toys and that collection was worth a good chunk of change. All assets need to have a value placed on them - market value. I went through the effort of valuing everything, documenting my claim as to their values (so he wouldn't come back and say it was just my opinion, which is all he had).

You list all assets (with their values) and all debts acquired during the marriage and split them up (by value). In our case, the judge looks for "fair," not necessarily equal. But there needs to be something compelling to justify anything less than somewhat equal. That's when dissipation of assets comes in.

I *could* have claimed more of the assets due to the documented dissipation. However, he would have fought that and it would have required a contested divorce, meaning much more legal cost as opposed to a cheap dissolution (uncontested divorce).

So I came up with a list of everything divided up. To make it somewhat equal to appease Xhole, I took on a little more of the debt. He got all the toys and firearms that he really wanted. The bottom line net (assets + debts) for both of us was pretty close to being equal.

The reason I took on a little more debt is because my name was tied to it, and I did not trust him to pay it off and not flush my credit any further down the toilet than he had already done. In hindsight, it was the best decision I made because he ended up with default judgments against him down the road for failure to pay debts.

Back to the dissipation of assets. When Xhole started to balk a little I told him if he didn't want to agree, we would go through a contested divorce and I would drag him and his OW through the mud in public for all to see. I would also fight for my half of all dissipated assets and he would be paying me likely for the rest of his life, with his image publicly torn to shreds (his image as a good guy means everything to him).

He then decided my initial offer was fair and signed the papers. The judge asked during the hearing why I was getting the house and all equity, but once he saw that Xhole was getting other assets in exchange (as well as less than half the debt) and the net values were close to equal he didn't bat an eye. That meant a successful, cheap, and very fast uncontested divorce.

I also knew that I would be fighting him endlessly for payment of those dissipated assets for years because of his financial ineptitude and it was worth it NOT to actually go after them. Just having the info as legal ammunition for a viable threat was what helped.

I explained all that to show that equitable distribution is all about negotiation and strategy. You generally ask for more initially knowing you can relinquish some things during the negotiation that you never cared about anyway.

If your state has alimony/spousal support, you can also look into that since he makes much more than you. In my state it is really not an option except under extreme cases.

If you want less of the debt, that generally means he will get more assets to offset it (to compensate for him taking more debt). Think of ALL assets and put values on them - house, cars, furniture, collections, expensive toys, etc. It all adds up. Think Craigslist/garage sale values (market values).

Have your attorney push for the financial disclosures from him. Anything earned in the 401k during the marriage is a marital asset (the same goes for any retirement you may have), and it gets included in the negotiations, regardless of what he spent it on.

To reiterate, all this is what my experience was with regard to equitable distribution in my state. Your state laws may be entirely different and you need to talk to your attorney and/or do some homework online to see how it plays out in your state. And, of course, the issue of child support is separate and generally driven by a standard formula in your state that you can usually look up online.

Lastly, not to sound like a real downer, the judge won't give a rip where your STBX lives after he moves out and whether he pays for rent or not. And your STBX may be of the opinion that your child can make new friends in a different school if you can't afford to stay where you currently live. Regardless of how cold he may be about it, it likely won't play into the legal part of an equitable distribution negotiation (but discuss with your attorney).

I'm sorry you are going through this. It truly sucks.

homewrecked2011 posted 5/1/2020 22:09 PM

One thing I tried to remember throughout all this is that I wanted my kids around xh and ow as little as possible, and I wanted the house, all equity and never have to refi. But of course I never told him. It worked out for me, I just kept stressing to my atty that the kids needed one thing stable-us not moving).

That said, things can go kind of quickly, but everything can be negotiated. If there’s $ left in the 401k you can actually be given money from it called a QUADRO. I got 25,000 instead of lifetime alimony. Some people thought that was dumb, but I got the $$ in 3 months and with alimony he could have died a week after the D and I would have gotten zero.

You can get his life ins policy, you take over payments and are named permanent beneficiary, or in my case the kids were benef til last one turned 18.

You can get someone to come over and give estimates on what needs to be fixed in the house, and that figure can be taken off your liability on the student loans.

Be sure you get to claim your child on taxes. I got a lot of $$ in refunds due to claiming head of household, child tax credit, etc.

Put your foot down with your atty about getting your husbands financials. I did not and my attys dropped the ball on this.
ALSO very important. Do not use his w-2 as income! Use his last paycheck stub of the year, bc that will show income BEFORE 401k, health ins pre tax withdrawals.

On the house- make sure it’s part of the decree that he must sign the quit claim deed with in 10 days of your atty preparing it.

Hang in there, it’s so much better when you can live your life peacefully.

Simplicity posted 5/5/2020 01:17 AM

Unless your name is on the loan somewhere, student loans are special in that they are solely the responsibility of the student. So as long as, like parents often do, you didn't cosign anything, it is his and his alone. In fact it is one of the few loans where it dies with the student as well (as in if he died while you were married, that is not debt you need to repay, unless, again, you cosigned the loan). Double check with an attorney, but that is the general nature of student loans.

heathenchristian posted 5/5/2020 13:16 PM

This is what I've found online... Like with assets, distribution of debt typically only debts that were acquired during the marriage. As such, student loans that were obtained before marriage are likely to be excluded from the marital estate. It is important to note, however, that student loan debt does not automatically become a part of the marital estate, just because the debt was incurred over the course of the marriage. Instead, there are several factors that may be used to determine whether the student loan debt is a part of the marital estate. These factors include:

When in the marriage the debt was incurred;
How the money was used (i.e. student loans used to cover housing expenses may become marital property);
If a degree was obtained;
Who benefited from the debt (if the debtor graduated just before the divorce, the debtor may be considered the sole beneficiary, which may exclude the debt from the marital estate);
The earning power of each party; and
Any tax implications related to the debt.
Even when taking these factors into consideration, it is important to note that courts are not always consistent in their division of student loan debts. As such, it is important to have someone representing your rights and best interests throughout the divorce process.

Dividing Student Loans in Divorce

Whenever student loans are included in the marital estate, they are divided according to the state’s divorce laws. In Illinois, an equitable distribution state, that means the debt is divided “fairly” rather than equally. Unfortunately, the definition of “fair” can vary, depending on your perspective. As such, the courts have several factors that they use to determine how debts and assets should be divided in an Illinois divorce. These factors include the:

Duration of the marriage;
Earning power of each party;
Income and assets of each party;
Realistic earning capacity of each party;
Impairment of earning capacity of each party (if any);
Standard of living established during the marriage;
Allocation of parental responsibilities;
Parenting time distribution;
Tax implications of debt and asset distribution;
Pre-existing agreements between the parties (i.e. prenuptial agreement); and
Any other factors the courts deem relevant.

So potentially I could be partially responsible...however he makes double what I do. So maybe not...I am making a list of questions for my lawyer.

Thank you for your insights.

LadyG posted 5/13/2020 21:05 PM

My Lawyer advised that I am better off waiting for STBXH to hand over his Financials 1st.

I will then pick holes in it and force Disclosure before submitting anything.

It’s awful but I am too kind and although it has been a long process, sitting back, I found another $100k in joint assets which I totally forgot about.

I am taking it slow as STBX was in a hurry to get FINANCIAL SETTLEMENT in place before DIVORCE.

We have the option to DIVORCE first with FINANCIAL SETTLEMENT still Pending. I have ensured that his excessive spending and lifestyle have been stopped.

Good luck. Be patient and you shall be rewarded. 🙏🏼

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