More and more people have substantial credit card debts, home equity lines, and/or second mortgages on a home. I see many divorces where the assets are less than the liabilities. This is a situation where there may have to be some creative financing. There may be the necessity for exploring bankruptcy. It may be a situation where some of the credit card companies will negotiate a reduction in debts if there is money to pay them off, assuming someone’s credit has already been hurt by the economy. These are all situations that are happening more and more frequently in our current economic mess.

Last, but not least, bear in mind that as you go through a divorce, creativity is more and more important now than it may have been three or four years ago when people had positive equities in their homes, substantial value in their IRAs, and 401Ks. They also had a belief in a secure job and economic future. Things are different now, and every case must be handled very delicately because of the horrible recession that we are going through, which quite frankly, is worse than any time since the Great Depression over 70 years ago.

Here at Gornbein Smith Peskin-Shepherd PLLC, we would be happy to answer any questions on cases regarding Divorce Law.

These are rapidly decreasing in value. In some cases where there are a lot of debts, and people want to avoid bankruptcy, it may make sense to take the husband’s 401K and/or IRA and roll it over to the wife, if she has an income. This way there are no penalties. She can then take the money out for payment of marital debts, and her taxes will be at a lower rate. These are things to carefully scrutinize in a divorce where there are substantial debts and it may be necessary to go into 401Ks or IRAs to pay them.

I recently had a first in my career where a client was laid off from General Motors, would not be eligible for his pension for approximately 10 more years, and found out that he was able to cash inthe pension for a fairly substantial amount of money based upon the present value of the future benefits. I had never heard of this before, and it may be an option worth exploring in certain cases. In this situation, you are going to be using the pension to pay off debts, and to give each of the parties some money to start rebuilding their lives. There will be no future pension if it is bought out now.

As divorce trials approach, the last hours before the court appearance can be filled with last minute negotiations and rounds of offers and counter-offers. Emotions between the divorcing couple run high, and it’s easy to lose sight of the big picture and the context of where things started. There’s a fine balance between taking on the other person’s perspective to get closer to settlement and making sure you maintain enough of your own perspective that you don’t settle for too little. The current offer must be weighed against the cost of extensive attorney fees for trial and the possibility that a mediated or trial settlement could be better or worse.

Sometimes finding creative ways to reframe divorce settlements can ease tensions. For example, a recent client’s husband found it more palatable to pay attorney fees directly rather than to her as property settlement for her attorney fees. Small shifts can make a big difference when feelings of anger, sadness, or uncertainly are involved. Although I was prepared to improve my client’s settlement, she and her husband came to agreement on our bottom line offer.

If you’re caught up in a last minute divorce settlement, remember to step back and take a deep breath. Remember that there is no sure settlement in court even though the current offer may fall short of your expectations. Weigh in on the costs of continued litigation with the financial reality of the result you seek – and the emotional impact on family members who are directly involved in the restructuring of your family, especially your children.

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Alisa A. Peskin-Shepherd

9. Economic Pressures, especially in these very tough, economic times. People losing jobs, businesses failing, houses with negative equity, and 401Ks drastically being reduced are causing extreme emotional pressure on people.

8. People growing apart and going in different directions. The question that someone should ask is when the children are grown, is this someone you want to spend the rest of your life with? Do you share enough common interests? Will there be a bond to hold you together once you reach an age for retirement? What do you want to do with the rest of your life?

7. Alcohol problems. Alcoholism is a common cause of problems leading to divorce.

6. Drug related problems, including prescription drugs. I have seen more and more cases with not only drugs, such as marijuana and cocaine leading to divorce, but also addiction to Vicadin and other prescription drugs.

5. Gambling problems. Over the years I have seen people lose their jobs, their marriages, their homes, and their professions due to addiction to gambling.

4. Addiction to the internet. This includes people who are on hour after hour, whether it is for shopping, for e-mailing, or just constant searching online to the exclusion of everything else.

3. Addiction to pornography. Addition to pornography is more and more common, and I have seen many cases in my practice. This will often lead to the next issue, which is infidelity.

2. Infidelity. If someone has an affair, can it be forgiven? Can people move on and rebuild? These are questions. Counseling is often critical if there is infidelity.

1. A total inability to communicate. When two people are on different wave lengths, often from the beginning. Perhaps these are people who should never have gotten married in the first place.

9. In many cases, especially where there are not a lot of complicated assets, parties will avoid formal discovery and just exchange affidavits, listing assets and liabilities with documentation. This is under oath, and does provide some protection.

8. In most divorces, interrogatories are filed. These are questions covering assets, liabilities, and any other issues such as employment, health, and anything that is relevant to the case. In Michigan, these must be answered within 28 days under oath.

7. Requests to Admit – This is a tool which requires admissions or denials of key facts and issues in a given divorce case. This can be a very effective technique in certain situations.

6. A Notice to Produce – This is a requirement that certain documents have to be produced by the opposing party within 28 days.

5. Subpoenas – These are documents that are sent to an employer, a bank, phone company, etc. to require that bank accounts, records, retirement accounts, wage or pension information, be supplied to determine assets and liabilities. They can also be used in certain situations such as phone records or text messages, where fault is an issue, such as an extra-marital affair.

4. Depositions – These are proceedings where testimony is taken under oath at an attorney’s office with a court reporter present for discovery of assets and liabilities, or any other relevant issue in a divorce or other type of case.

3. Often where there is a business, professional practice, real estate, or other asset, there will be an expert such as a business appraiser, CPA who specialize in this area, real estate appraiser or other expert, to assist in determining the assets value which can be a key issue in a divorce.

2. In some cases where there are complicated issues regarding discovery and assets, a judge can appoint a discovery master who is an attorney who is brought in to oversee and make rulings on contested discovery issues.

1. Last, but not least, in some cases motions must be filed to compel cooperation by the other party regarding discovery issues. For example, if interrogatories have not been answered in a timely matter, or have not been fully answered, there may be a motion to compel. The same can be said for requirement of someone to appear at a deposition, or other discovery issue. In that situation, the court can compel the discovery and actually assess court costs and attorney fees if someone is being unreasonable with regard to failing to provide responsive answers to discovery requests. It is important to talk to your attorney and make sure that the appropriate discovery is done for your needs. In some cases, a minimum is all that is required and in other cases, you need very extensive and sometimes protracted and expensive discovery.