Prior to getting a divorce, divorcees often have many questions regarding the process and what to expect. Here are some frequently asked questions about divorce and some answers from divorce lawyer Roger Stelk.
What is a No-fault Divorce?
In the past, the only way for couples to get a divorce was to prove that one spouse was at fault and that he or she did something that warranted divorce. Some of these justifications included spousal abuse, prison sentencing, adultery, or insanity. Today, no-fault divorce allows a divorce to take place if one of the parties is unhappy in his or her marriage.
How Much Does a Divorce Cost?
Divorces come with a combination of variable and fixed costs. Fixed costs are fees that individuals pay to the court, along with fees paid for serving legal papers for a party to review and sign. Variable fees, on the other hand, are fees for legal representation and document preparation. These fees will vary from state to state and from case to case. Extra costs could also arise if disputed issues require mediation or there’s a need for a financial analyst’s involvement regarding property issues.
How Does a Spouse File for Divorce?
The divorce process begins when a spouse files a certain document with the court known as a Petition or Complaint, depending on the state in which the divorce is to take place. Some states also refer to divorce as a “dissolution of marriage.” The other spouse receives a copy of the Complaint or Petition through either a process server or the local sheriff’s office. This form may not be needed if both spouses agree to a divorce.
Once the spouse receives the Complaint, the proceeding steps will depend on how he or she responds to that form, as the individual might respond in disagreement with the form or choose not to respond at all. Financial statements and other documents may also come into play. In some cases, the process could become complicated, which makes working with an attorney ideal to ease the process.
How Long Does a Divorce Take?
There are many different factors that can influence the amount of time a divorce requires to resolve. These requirements can include state residency, living separately for a period of time, state-mandated waiting periods, and other state requirements.
Keeping these aspects in mind, individuals can find out their state’s divorce requirements.
When a marriage is ending, properly preparing for divorce can be one of the smartest things spouses ever do. Family lawyers in the Chicago area often help divorcing spouses understand their legal options and how to prepare when their marriages are failing.
Dealing with Emotions
The divorce process can bring the worst out of all involved. Minor disagreements can quickly spin out of control. Individuals who are going through a divorce should learn to keep their emotions under control. This could involve hiring a divorce coach, therapist, or joining a support group to deal with emotions during a divorce.
Organization is Key During a Divorce
The stress of divorce can interfere with organization. From the initial filing to the final decree, the divorce process is document-driven. Spouses that plan to file for divorce should get a head start with gathering documents like:
Income tax returns
W-2 forms and paycheck stubs
Retirement and investment account statements
Credit card statements
Household bills, including mortgages, car loans, and medical bills
It is important to have all these documents organized and ready for the family lawyer who will be handling the divorce filing. This helps save time and expense as the divorce proceeds.
Understanding Finances and Preparing for Life After Divorce
Parties in a divorce should understand their finances. If one spouse handled paying bills, all investments, or retirement accounts, the other spouse could be at a disadvantage. Both spouses should understand what assets the couple has so they are not shortchanged during the divorce.
Spouses also need to prepare financially for life after divorce. With many households having two incomes, plans need to be made to handle the decrease in income. Until a divorce is finalized, any maintenance or child support amounts may be in question. Bills will still need to be paid and both spouses and any children involved will need somewhere to live.
Learning About Divorce Options Before Filing
Before making the decision to file for divorce, spouses should understand the options that are available. It is not always necessary to go through a drawn out and expensive divorce trial. In Illinois, divorcing couples can opt for a collaborative divorce, or investigate mediation or arbitration methods in lieu of litigation. A family lawyer can help couples decide which option would be best for their divorce.
The spring homebuying season is off to a slow start in Chicago and the weak housing market could make it more difficult for Arlington Heights’s homeowners to sell their homes. Local real estate lawyers report that spring and summer months are typically the best time of the year to sell a home. Home sellers need to prepare themselves as the market continues its buyer-friendly tilt.
What is Fueling the Current Decline?
A late 2018 Realtor.com survey predicted that Chicago’s residential real estate market was going to have a bad 2019. Predictions included declines in median home prices by 1.9 percent and the number of home sales by 7.4 percent. The survey pointed to Chicago’s slower population and employment growth in comparison to other areas in the country.
Adding to metro Chicago’s woes, housing inventory has fallen. Additionally, mortgage rates for a 30-year fixed mortgage have risen 5.1 percent. This has caused some buyers to be priced out of price bands where inventory does exist.
According to the Illinois Association of Realtors, more homes sold in March than in February 2019. However, while 8,122 homes sold in the metro Chicago area, this was a 10 percent decrease from last year. February’s 5,600 sold homes was just a 4 percent decrease from February 2018 numbers.
Despite the increase in homes sold in March, it was not the spring rebound that was expected by realtors. Median home prices increased by only 0.4 percent to $240,000 in March. This is after a 1 percent gain in February. In Chicago proper, home sellers are facing a bigger challenge. March home prices decreased by 13.6 percent since last year while prices dropped 6 percent since 2018.
Local Real Estate Experts Express Optimism
Despite the gloomy forecast for Chicago’s housing market, optimism remains. Local real estate experts, like Tommy Choi, president of the Chicago Association of Realtors, expressed optimism by stating “As the spring selling season ramps up, we’ll start to see more activity again, although at a more measured pace reflective of the current consumer climate.” Lower interest rates, increased inventory and growing Millennial interest in buying a home could give the market the jump start it sorely needs.
Interest rates are not expected to increase for the rest of the year, and even with slightly higher gains in home prices, Chicago is expected to stay buyer-friendly during the next few years according to a report from the Illinois Association of Realtors.
Finding mold in a home can complicate real estate transactions, and it is even worse when the problem is found after the sale. While a mold disclosure form is commonly used at real estate closings, Illinois law does not require sellers to fill it out. This form states whether a mold test was conducted and if mold was found. This could leave homebuyers dealing with an expensive problem that could jeopardize the health of their families.
Hazards of Mold in the Home
Mold in a home is considered a health hazard. It can cause or exacerbate existing respiratory conditions. People who suffer from asthma or COPD or are very young or elderly are especially at risk. The cost of removing mold and repairing the damage takes time and can be very expensive.
Signs that a Home May Have Mold
Buyers who are considering making an offer on a home should look for any obvious signs of water damage or mold, including:
Musty smells in the home, especially in rooms that have plumbing, including bathrooms, kitchens, laundry rooms, or basements
Water stains on walls, ceilings or inside cabinets
Standing water in basements
What Can Buyers and Sellers Do?
Even though a mold disclosure is not required in Illinois, a buyer can still request that a seller disclose if the home has a mold problem. Mortgage lenders often require an inspection of a home before agreeing to fund a mortgage. If the inspection uncovers signs of water damage and mold, the lender might not approve the mortgage unless the damage is repaired.
It is always a good idea for buyers to make sure their real estate lawyer includes a mold contingency within their sales contract that could allow them to walk away from the sale. The presence of mold is not always a deal killer in a home sale. A buyer can use it as a bargaining chip in the sale to request a lower sales price or require the owner to have mold remediation before continuing with the sale.
When mold is discovered after the sale, it may be possible to seek recourse from the previous owner. If there is reasonable evidence that the seller knew of the presence of mold and mislead the buyer, he may be liable to the buyer for failure to disclose.
Parents who plan to file for custody should familiarize themselves with Illinois custody statutes. Illinois’ family courts base their child custody decisions in the best interest of the child. In doing so, the court considers multiple factors before issuing its decision.
Illinois Court’s Stance on Custody
Whenever possible, the court prefers that both parents be awarded joint legal custody. Joint physical custody depends on the parents’ ability to come to an agreement on parenting time. When they cannot agree, the court will determine physical custody.
Making Efforts to Negotiate in Good Faith
It is always in the best interest of the children for the parents to attempt to negotiate in good faith and arrive at an agreement regarding how parenting time and responsibility will be allocated. When parents reach an agreement, it will be put into the Parenting Plan. This plan describes who will be responsible for making different types of major decisions regarding the child(ren) life(s). It also includes which days of the year each parent is responsible for the physical custody of the child(ren).
When Parents Cannot Agree on Custody Issues
When parents fail to agree on parenting time and responsibility, the court may refer them to mediation with their child custody attorneys. If mediation is not successful, the court will need to make a decision based on what would be best for the child(ren) and each parent’s living situation. The court will appoint one or more experts who will evaluate both parents, the child(ren), and the living situations. The expert(s) will write a report with their recommendations. Factors that the court will consider, include:
A parent’s willingness to encourage the child(ren)’s relationship with the other parent
In a trial, the court will determine whether one or both parents should have physical custody. When a parent is not granted custody, he or she is still entitled to reasonable visitation unless there is the reason to believe the child(ren) would be put in danger.
Once the court has signed a custody order, it may not be modified for at least two years. The exception to this rule is if the current arrangement is endangering the child’s physical, emotional, mental, or moral health.
Projections from industry experts suggest that Chicago’s difficult housing market could be improving in 2019. Lower interest rates could help increase buying activity. However, buyers and sellers need to be realistic with their expectations and be flexible.
Chicago’s Real Estate Market in 2019
Rising interest rates, volatility with the stock market, and political strife has made a negative impact on Chicago’s and the nation’s housing markets. This discord has made buyers and sellers hesitant because they think things are too crazy right now to buy or sell a home. But housing prices are expected to grow slightly throughout the entire United States during 2019. With that rise, the inventory of homes for sale could increase.
The key factor to Chicago’s housing market success is the Millennial generation that accounts for 45 percent of mortgage borrowers. When comparing Millennials to Baby Boomers who hold 17 percent and Gen X who hold 37 percent of mortgages, this segment will only continue to grow. It is expected that Millennials will gravitate to Chicago’s Downtown because many jobs have moved there from the suburbs. This is great news for the housing market, but it also brings about affordability challenges as housing inventories shrink as sales are expected to increase by 1.5 percent.
South Side neighborhoods are also expected to see stronger home sales during 2019. The reasons for this could be because of newly created Opportunity Zones and the future opening of the Barack Obama Presidential Liberty. These neighborhoods include Bronzeville, Woodlawn, and South Shore.
A Silver Lining Does Exist
Some industry experts, like Curt Beardsley, Zillow’s vice president of industry development believes that 2019 will be a better year than 2018 in home sales. Home builders are beginning to drop prices on new homes. In Chicago, the prices of 21.3 percent newly built homes were lowered at the end of 2018. While the average cut was only about 0.2 percent, it is a sign that new homes may become more affordable.
But the greatest glimmer of hope for the housing market may be that the Federal Reserve announced recently that it does not plan to raise interest rates for the remainder of 2019. This has already given some housing markets across the country a much-needed boost as the number of mortgage applications filed is already increasing.
Certain financial mistakes made during divorce settlement may mean the difference between setting one or both spouses up for success or future financial failures. Here are five financial mistakes that divorcing couples should avoid.
Mistake #1 – Forgetting to Make a Post-Divorce Budget
People need to have an accurate picture of what they can realistically afford on their own before agreeing to the terms of a divorce. Making a budget requires people to face their financial circumstances, no matter how uncomfortable they may be. Failing to create a post-divorce budget before settling a case could lead to financial problems that last long after the divorce is finalized.
Mistake #2 – Not Having an Accurate Picture of Financial Situation
It is important for each spouse to have an accurate picture of each other’s financial situation. Having a budget and financial balance sheet is great, but the financial documents that support those documents are needed. Not taking the time to do due diligence with financial information is a mistake to avoid because it could lead to one spouse getting short-changed in a divorce settlement.
Mistake #3 – Not Understanding Financial Documents
Once all financial documents have been obtained, they need to be read and understood by each spouse. Understanding financial documents may require help from a divorce lawyer, an accountant, or a financial consultant if complicated liabilities, retirement accounts, or investments exist.
Mistake #4 – Not Properly Valuing Assets
Both spouses need to have their assets properly valued to ensure that each spouse walks away with assets of approximately equal worth. Dividing assets without having them accurately valued could be a very costly mistake for either spouse.
Mistake #5 – Not Looking Toward the Future
Trying to rush to arrive at a settlement could lead litigants to forget about the future. There are multiple financial issues that need to be considered, including:
Rising interest rates and home prices are expected to make buying or selling a home more difficult in 2019 according to real estate experts. While housing inventory is expected to increase, it could be challenging for many buyers to afford entry-level real estate. Buyers will need to adapt to higher rates and prices. Sellers, on the other hand, should be ready for more competition.
Rising Rates on the Horizon
According to a forecast from Realtor.com, mortgage interest rates will rise average 5.3 percent and top out at 5.5 percent by the end of 2019. This would make most mortgage payments for new buyers almost 8 percent more a month than seen in 2018. Home prices are also expected to rise slowly at a 2.2 percent rate over 2019. Meanwhile, it is expected that inventory will moderately increase with an almost 7 percent gain. When crunching these numbers, it is expected there will be a 2 percent decline in home sales. It is expected that the buyer’s market will not return for at least five years if rates continue along this path.
Further 2019 Challenges Complicating Matters
The new tax changes will affect the affordability of owning a home beginning in 2019. Previously, homeowners could reduce their taxable income by deducting the interest paid on mortgages up to $1 million along with the interest on some home equity loans and lines of credits. In 2019, homeowners can only deduct paid interest on up to $750,000 in mortgage debt. Interest paid on home equity loans and lines of credit is limited to funds that are used for renovations or home improvements. And the $10,000 SALT cap is also expected to affect housing markets.
There May be a Silver Lining for Some
Despite the challenges, there may still be an opportunity to be had by some buyers and sellers. It is still a seller’s market and sellers can benefit if they are willing to be flexible. And for buyers, there is less competition and a bigger inventory of houses to choose from.
Help May Be on the Way
The Federal Housing Finance Agency is raising the amount that home buyers can borrow with a conforming loan up to $484,350 in 2019 from $453,100. This will allow homebuyers to borrow more money without having to qualify for a Jumbo Mortgage.
Family law attorneys often advise their clients to avoid using dating apps and other types of social media during divorce. The information used on these sites, whether true or not is public and could further complicate matters regarding finances and custody issues.
Avoiding Dating Prematurely
It can be tempting to jump into dating when one’s spouse has already moved on with a significant other. The basic human needs for companionship, affection, validation, and desire can push people into dating when they are not emotionally ready. The convenience of dating apps and social media can make the temptation to date prematurely even stronger.
Using Caution with Dating Apps and Social Media
The average divorce may take up to 13 months to finalize. But when a divorce drags on for years because of complex issues like custody disputes or division of marital assets, it may not always be practical to wait to date. If a person chooses to date, he or she needs to think twice about using dating apps before the divorce is finalized.
Negative Implications of Using Dating Apps
The information that users provide or generate through interactions on dating apps can be used as evidence in a divorce case. This could lead to negative implications. For example, if a spouse is claiming he cannot afford child support, but he has an active dating life and is spending large sums of money, he can be found out easily.
Spouses Should Be Mindful When Using a Dating App
If a dating app must be used, the person needs to be careful about what information is shared and be truthful in how he is representing himself. Any lies can come back because of discovery and have a negative effect on the user’s side of the case. Apps that are connected to social media sites like Facebook make it easy to find the username and should be avoided. Instead, divorcing spouses should use an app that allows users to create independent usernames and profiles that are not connected to another site.
Dating Apps Designed Specifically for Divorced People
Dating after a divorce is not always easy, especially when dealing with a difficult ex and co-parenting. There are dating apps that are designed specifically for divorced people. These apps increase the likelihood of meeting someone who is better equipped to understand the issues divorced people go through because of his or her own divorce.
The new five-page Closing Disclosure makes home loans easier to understand and must be provided to borrowers at least 72 hours before their closing dates to allow them more time to review what they are signing. This new disclosure replaces the HUD-1 Settlement Statement. Previously, the HUD-1 Settlement Statement was provided to a buyer at closing.
Easy to Understand Format
The Closing Disclosure is a statement of the final loan terms and closing costs. The information on this disclosure should be compared with the Loan Estimate that the borrower received when applying for his or her mortgage. Each page of the document lays out the key terms and details of fees and other costs associated with finalizing the mortgage at closing.
The first page of the Disclosure displays information regarding the buyer and seller, loan information and closing date and location. The loan information includes information that should match what the borrower was offered while applying for the mortgage, including:
Projected payments, including a breakdown of principal and interest, PMI if applicable, taxes, homeowners’ insurance, and escrow
Costs at closing
The second page of the Disclosure gives a breakdown of all the closing costs associated with the mortgage loan. Costs include loan origination charges, services the borrower did not shop for, such as the bank’s appraisal fee, and services the borrower did shop for, like survey or inspection fees. Other costs refer to various expenses that may have been prepaid by the borrower or seller.
The third page of the Disclosure provides the calculations that are used to calculate the cash needed to close and summaries of both the borrower’s and seller’s transactions. These summaries are a record of all charges, adjustments, and payments for both entities.
Pages Four and Five
The final two pages of the Disclosure provide additional information about the loan including late payment fees, escrow information, and loan calculations. All contact information for the lender, mortgage broker, real estate brokers for buyer and seller, and settlement agent are provided on the final page. The borrower signs the bottom of the last page to confirm they have received the Disclosure.