DAVID PISARRA

DON’T BE A “GOOD GUY” AND PAY OFF THE DEBT!!!!

In Property Issues, Spousal Support, Strategy Issues on August 3, 2008 at 12:15 am

NEVER PAY OFF THE DEBT BEFORE THE DIVORCE!!! 

            When it comes to strategy most men are really good at figuring out when to hold a poker hand, or call a Hail Mary in football. We spend hours talking about what works, what doesn’t and why. Men can spend all afternoon on a boat, with a six pack, talking about how to beat the casinos in Vegas, but when it comes to planning a divorce they clam up and what little instincts we have are usually wrong. A man will tend to do what he thinks is the “right thing” to do, and frequently it is the wrong thing to do, when you are going through a divorce.

            A common occurrence among the men who come to our office is that, they have just recently paid off all the debt. Sometimes they have refinanced their home and used an equity line on their home to get a lower interest rate on their credit card debt, and paid off their soon to be ex-wife’s credit cards.

            These are good things to do, if you are planning on staying married, but they are huge mistakes when it comes to the strategy of planning for a divorce.

            Debt, like assets, must be divided equally upon a divorce. For a man, who is usually the bigger earner, this is a strong piece of leverage to be used. If you think of a divorce like a game of chess. You are the King, and you need to be protected. She is the queen, and like the chess queen, she can be unpredictable in what she can and will do. You need to have pieces in your army to win. Think of child custody like the Rook, it only goes two ways, between you and her. Spousal Support is like the Bishop, it can go as far as the board will allow it. The assets and debts are like pawns, they can only go one way, but there’s a lot of them, and sometimes you have to sacrifice one to same a bigger more powerful piece.

            But if you pay off all the debt, you’re removing pawns, that you might need later to protect your Bishop. If the husband takes half the debt, but he makes 25% more his soon to be ex, then he can ask for half the assets, and since he makes more, will be ahead of the game, because he can pay of the debt faster than she can. This way he ends up with more in the long run

            If you pay off the debt while you are still married, or at pre-filing, you are paying it with Community Property and she doesn’t have to re-pay

 

 

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