Debts Archives - Ohio Family Law Blog

How are Student Loans Treated in an Ohio Divorce?

Who Owes Student Loan Debt in a Divorce…is it Joint?

In the US Americans owe approximately $1.77 trillion dollars in student loan debts. That is a staggering figure! So, understandably, figuring out how these loans are dealt with can be very important for couples contemplating a divorce. In Ohio, there are many factors that need to be considered. Ohio is an equitable property division state. That means that the Court does not have to divide marital debts equally but only in a “fair or equitable” manner.

WAS THE DEBT INCURRED BEFORE THE MARRIAGE?

If so, the general rule in Ohio is that such a loan would be considered personal to the individual who incurred it. That person would continue to be solely responsible to pay his/her student debt loan.

WAS THE STUDENT LOAN DEBT INCURRED AFTER THE MARRIAGE?

Student loans obtained by one spouse during the marriage may be categorized as marital debt subject to equitable distribution. Heavilin v. Fillman, No. 2019-AP-04-0014, 2019 Ohio App. LEXIS 5502, at *10 (Ohio Ct. App. Dec. 23, 2019); Harris v. Harris, No. 2006-CA-0003, 2007 Ohio App. LEXIS 1160, (Ohio Ct. App. March 16, 2007); Webb v. Webb, No. CA97-09-167, … Read More... “How are Student Loans Treated in an Ohio Divorce?”

5 Tips for Smart Money Management and Creating a Good Credit Score During a Divorce

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How To Maintain a Good Credit Report During Divorce

Debt and Credit Issues Can Create Complicated And Stressful Times. How To Maintain A Good Credit Report During Divorce

Folks going through a divorce have many things on their mind. It can be a very emotional and stressful time! At some point you will inevitably need to start looking carefully at your debt and financial situation. When you are at that point, here are 5 basic tips:

Deal with Your Debt – Don’t Ignore it!

Request a Free Credit Report

The first step you should do is order a credit report from at least one of the three major credit reporting agencies (Equifax, Transunion and Experian). This will list debts attached to your name, both individually and jointly with your spouse.

There are 3 major credit reporting agencies Equifax, Experian and Transunion. You may want to order a report from one or all of them. You can also obtain one free credit report per year through annualcreditreport.com . Your divorce lawyer will want a copy anyway. Once you receive it, take time to thoroughly study it. Make sure it appears accurate. Look for errors such as credit lines

The Ohio Supreme Court Gives a Win to Surviving Spouses Over Creditors

Ohio Supreme Court Rules That A Creditor Must Look At The Deceased Spouse’s Estate Before Pursuing A Surviving Spouse For Debt Payment

In a somewhat surprising decision, the Ohio Supreme Court on December 12, 2018, in Embassy Healthcare v. Bell provided some relief to surviving spouses for the debts of their deceased spouses under certain situations. Now, a creditor must look to the deceased spouse’s estate first before pursuing the surviving spouse for payment.

To understand the argument on both sides, one must first look to the existing statutory law. Under current existing Ohio statutory law, any creditor looking to be paid by a debtor’s estate must present a claim to the estate of the decedent within 6 months of the decedent’s death or the claim is banned forever. However, there is also the “necessaries statute” that states every spouse is directly responsible to care for his or her spouse if they are unable to do so. This has always been interpreted to mean that the surviving spouse is directly responsible for the funeral bill or last medical bills of the deceased spouse. Under R.C. 3103.03, the necessaries statute, the debtor spouse has primary liability for his/her own debts. The … Read More... “The Ohio Supreme Court Gives a Win to Surviving Spouses Over Creditors”

The “Un-Advisability” of an “Un-Divorce” Arrangement

Psychotherapist and Guest Contributor Donna F. Ferber sent me an email a month or so ago encouraging me to read Suzi Parker’s article about famous couples who chose, rather than going through a divorce, to simply live separate lives. Click here to read Ms. Parker’s article about a trend some people call an “un-divorce.”

We both agreed to attempt to fairly evaluate the “pros and cons” of this option: she from a psychological perspective and me from a legal perspective. Initially, Donna was much more open to the possible merits of this arrangement than I was. She made it clear that she was most interested in hopefully reaching and empowering people who are in unhappy marriages and who feel trapped by fear, ignorance, and the lack of financial and emotional resources. Donna and I continued to exchange numerous emails over the last six weeks about this “un-divorce” arrangement, discussing the relative merits of couples remaining married but living separate lives. By reading the title of this article, I suspect you can tell that I am not impressed with the overall wisdom of such a relationship. While it is certainly possible to construct various hypothetical situations when an “un-divorce” arrangement might … Read More... “The “Un-Advisability” of an “Un-Divorce” Arrangement”

The Nuts and Bolts of Real Estate “Short Sales”

Recent estimates indicate that possibly more than twenty-five percent of all homeowners are upside-down on their home mortgages, meaning that they owe more on their home loan or loans than the fair market value of the residence. This makes it virtually impossible to sell at a private sale. When a couple goes through a divorce or dissolution and needs to divide the assets including such a home, what are they to do? One answer is to walk away from the house, which will lead to foreclosure litigation and a crippled credit rating. Another possible answer is to complete a “short sale”.

A “short sale” is when a lender agrees to the sale of a property by the owner for less than the amount owed to the lender. It means that the lender is willing to accept less than the amount owed. Except for those lenders who are participants in the Home Affordable Foreclosure Alternatives Program (HAFA), the lender may or may not pursue the difference against the borrower. If the lender does forgive the difference, it likely will not be considered as income by the IRS as long as it complies under the Mortgage Forgiveness Debt Relief Act of 2007(which … Read More... “The Nuts and Bolts of Real Estate “Short Sales””