Domestic violence wreaks emotional and physical havoc on the victim and the other innocent family members. While its clear that in a family law case the victim can procure protective orders from the court, victims of abuse may be unaware that they also have a right to sue in civil courts for their emotional and physical damages.
Just because you are in a marriage or partnership does not rule out your right to seek money damages in the civil courts for the abuse. Besides seeking recovery for wage losses and medical treatment, the victim can ask for damages for pain and suffering. Children that are direct victims or witnesses to abuse are also entitled to recovery for their physical and/or emotional damages.
The most recent California case in point decided November 2010 is Boblitt v. Boblitt (11/30/10) 3 Civ C061307 (Robie) 2010 WL 4851085.
Before their marriage and the very day that wife moved in with husband he began verbally abusing her. Verbal abuse escalated to physical abuse. Husband broke wife's jaw.. The abuse did not end when they were married in late 1989, but continued up to and beyond wife's divorce filing in 2004.
In 2007, wife filed a separate tort action against husband, seeking damages for domestic violence, assault and battery, breach of fiduciary obligations, and intentional and negligent infliction of emotional distress. Wife's claims of domestic violence were also raised in the divorce action. In the divorce, wife asked for lost wages and other economic help.
In the family law trial court decision, the judge noted that he was remedying detrimental effect of husband's actions on wife's finances by awarding eight months of spousal support, conditioned on no contact between parties. Wife's request for award of funds for past and future medical bills, counseling, and pain and suffering was denied by the family law judge who noted that such an award would be inappropriate. After moving unsuccessfully for new trial, W appealed.
Wife filed a separate civil tort action and in response to that lawsuit husband moved for judgment on the pleadings in wife's tort action, claiming that because of the family law ruling and award of support to wife, all causes of action could have been or were tried in parties divorce case(including domestic violence and wife's request for reimbursement of medical bills, and for pain and suffering), which barred their re-litigation.
Wife replied in the civil case that tort action was not precluded because the family law judgment was not final (an appeal was still pending) and domestic violence issues were not litigated in the family court.
The civil litigation trial judge granted husbands motion dismissed wife's tort action.
Wife filed an appeal to the dismissal and the California Court of Appeal reversed the lower court, agreeing with wife and found that: (1) Wife has not waived her arguments because they present questions of law and are not based on disputed facts; (2) Wife’s domestic violence claims are not precluded because they are not based on same primary right (the wife's spousal-support request is not based on primary right to be free from personal injury.)
Even though the family law judge awarded money to the wife as a backdrop to her request for compensation due to husband's abusive conduct, wife still had a right in tort law to seek right of compensation and recovery from husband for her damages.
Victims of domestic violence are entitled to the full protection the law affords in criminial, family law and civil courts. Each court has a different remedy so its important to ensure you are protecting your legal rights by getting legal representation from an attorney skilled in handling these difficult and dangerous cases.
Wednesday, December 29, 2010
Thursday, November 18, 2010
PSYCHIATRIC EXPERTS ASSESS PARENTAL ALIENATION
Psychiatric experts assess parental alienation
Published October 01, 2010
Associated Press
NEW YORK – The American Psychiatric Association has a hot potato on its hands as it updates its catalog of mental disorders — whether to include parental alienation, a disputed term conveying how a child's relationship with one estranged parent can be poisoned by the other.
There's broad agreement that this sometimes occurs, usually triggered by a divorce and child-custody dispute. But there's bitter debate over whether the phenomenon should be formally classified as a mental health syndrome — a question now before the psychiatric association as it prepares the first complete revision since 1994 of its Diagnostic and Statistical Manual of Mental Disorders.
"We're gotten an enormous amount of mail — more than any other issue," said Dr. Darrel Regier, vice chair of the task force drafting the manual. "The passions on both sides of this are exceptional."
On one side of the debate, which has raged since the 1980s, are feminists, advocates for battered women and others who consider "parental alienation syndrome" to be an unproven and potentially dangerous concept useful to men trying to deflect attention from their abusive behavior.
"This is a fabricated notion — there's no science to support it," said Joan Meier, a professor at the George Washington University Law School who has written extensively on domestic violence and child custody.
On the other side are legions of firm believers in the existence of a syndrome, including hundreds gathering for a conference on the topic this weekend in New York. They say that recognition of parental alienation in the psychiatrists' manual would lead to fairer outcomes in family courts and enable more children of divorce to get treatment so they could reconcile with an estranged parent.
"This is a problem that causes horrible outcomes for children. ... All the arguments I've heard against it are trivial," said Dr. William Bernet, a psychiatry professor at the Vanderbilt University School of Medicine.
Bernet is among the speakers at this weekend's conference, which organizers bill as the largest ever on parental alienation. He will be describing his efforts as lead author of the proposal submitted to the psychiatric association to recognize parental alienation either as a "mental disorder" or a "relational problem."
The psychiatric association first published its manual of diagnostic disorders, known as the DSM, in 1952. The last major revision was published in 1994 and updated in 2000, and the fifth edition — DSM-5 — is due for publication in May 2013.
Work groups in various fields have been reviewing numerous proposals for additions to the 283 disorders in the current edition. Parental alienation remains on a list of proposals that are subject to further review, though it did not pass muster with the work group dealing with childhood and adolescent disorders.
"There is not sufficient scientific evidence to warrant its inclusion in the DSM," Regier said in a statement.
In an interview, Regier — who directs the APA's research division — said the proposal technically remains alive pending final presentations by the end of 2011. But he described chances for inclusion of parental alienation as "slim" — given that it has not been selected for field trials that normally would be a prerequisite for official recognition.
Bernet said it was "flatly ridiculous" for the APA to contend there is not enough information available to warrant including parental alienation in the DSM. He cited legal developments and new research in numerous foreign countries.
His proposal defines parental alienation disorder as "a mental condition in which a child, usually one whose parents are engaged in a high conflict divorce, allies himself or herself strongly with one parent, and rejects a relationship with the other parent, without legitimate justification."
The weekend conference at the Mount Sinai School of Medicine is the brainchild of Joseph Goldberg, who is based near Toronto and in 2008 founded an organization called the Canadian Symposium for Parental Alienation Syndrome.
Goldberg runs a consulting service for lawyers and parents litigating issues related to parental alienation. In his online biography, he says he "fought one of the most brutal case of parental alienation in Palm Beach County history" during a child-custody dispute with his ex-wife in Florida that extended from 2003 to 2006.
"This touches lives of more people than anyone imagines," Goldberg said by telephone from Canada. "It's not just about a child turned against a parent, through hatred. This affects grandparents, aunts and uncles, cousins, friends — all of them thrown out when a child rejects a parent."
Some of Goldberg's allies doubt the psychiatric association is ready to include parental alienation in its manual. New York-based psychologist Amy Baker, who has written a book about parental alienation, suggested the association might "play it safe" and decline to recognize it for fear of provoking feminist groups. However, Goldberg is hopeful.
"There's a long way to go over the next few years before they make a final decision," he said. "There will be enormous pressure. ...I think it will be difficult for the APA not to include it."
Parental alienation surged onto the pop-culture radar screen a few years ago as a consequence of the bitter divorce and child custody battle involving actors Alec Baldwin and Kim Basinger. Baldwin was harshly criticized by some feminist groups for citing parental alienation syndrome as a source of his estrangement with his daughter.
The concept is a source of confusion and division in the legal profession, as some lawyers try to evoke parental alienation and others challenge that tactic.
Texas Supreme Court Justice Debra Lerhmann, chair of the American Bar Association's family law section, said the issue of possible alienation can be raised in child custody proceedings whether or not any such phenomenon is classified as a disorder by health professionals.
"Anyone who's in this business knows there are situations where that in fact is happening — and sometimes it's alleged but is not happening," she said. "Even if it's not in the manual, relevant evidence can still be brought in."
Meier, the George Washington law professor, has urged judges to be cautious in how they allow the topic to be raised in cases where one estranged parent is accused by the other of abuse.
"You've got to assess the abuse first, without poisoning it with a claim of alienation," Meier said. "Only after abuse is ruled out do you then move on to the question of alienation."
Elizabeth Kates, a Pompano Beach, Fla., lawyer who deals often with child custody cases, is skeptical of the role parental alienation can play in such disputes: "It's a very easy claim to make ... but the problem arises when it's used in court to obscure the investigation of whether there's been abuse."
She said the initial impetus for recognition of parental alienation syndrome came in large part from the fathers' rights movement, but suggested much of the momentum now comes from psychologists, consultants and others who could profit if the concept had a more formal status in family court disputes.
"It's monetary," Kates said. "These psychologists and therapists make huge money doing the evaluations and therapies."
___
Published October 01, 2010
Associated Press
NEW YORK – The American Psychiatric Association has a hot potato on its hands as it updates its catalog of mental disorders — whether to include parental alienation, a disputed term conveying how a child's relationship with one estranged parent can be poisoned by the other.
There's broad agreement that this sometimes occurs, usually triggered by a divorce and child-custody dispute. But there's bitter debate over whether the phenomenon should be formally classified as a mental health syndrome — a question now before the psychiatric association as it prepares the first complete revision since 1994 of its Diagnostic and Statistical Manual of Mental Disorders.
"We're gotten an enormous amount of mail — more than any other issue," said Dr. Darrel Regier, vice chair of the task force drafting the manual. "The passions on both sides of this are exceptional."
On one side of the debate, which has raged since the 1980s, are feminists, advocates for battered women and others who consider "parental alienation syndrome" to be an unproven and potentially dangerous concept useful to men trying to deflect attention from their abusive behavior.
"This is a fabricated notion — there's no science to support it," said Joan Meier, a professor at the George Washington University Law School who has written extensively on domestic violence and child custody.
On the other side are legions of firm believers in the existence of a syndrome, including hundreds gathering for a conference on the topic this weekend in New York. They say that recognition of parental alienation in the psychiatrists' manual would lead to fairer outcomes in family courts and enable more children of divorce to get treatment so they could reconcile with an estranged parent.
"This is a problem that causes horrible outcomes for children. ... All the arguments I've heard against it are trivial," said Dr. William Bernet, a psychiatry professor at the Vanderbilt University School of Medicine.
Bernet is among the speakers at this weekend's conference, which organizers bill as the largest ever on parental alienation. He will be describing his efforts as lead author of the proposal submitted to the psychiatric association to recognize parental alienation either as a "mental disorder" or a "relational problem."
The psychiatric association first published its manual of diagnostic disorders, known as the DSM, in 1952. The last major revision was published in 1994 and updated in 2000, and the fifth edition — DSM-5 — is due for publication in May 2013.
Work groups in various fields have been reviewing numerous proposals for additions to the 283 disorders in the current edition. Parental alienation remains on a list of proposals that are subject to further review, though it did not pass muster with the work group dealing with childhood and adolescent disorders.
"There is not sufficient scientific evidence to warrant its inclusion in the DSM," Regier said in a statement.
In an interview, Regier — who directs the APA's research division — said the proposal technically remains alive pending final presentations by the end of 2011. But he described chances for inclusion of parental alienation as "slim" — given that it has not been selected for field trials that normally would be a prerequisite for official recognition.
Bernet said it was "flatly ridiculous" for the APA to contend there is not enough information available to warrant including parental alienation in the DSM. He cited legal developments and new research in numerous foreign countries.
His proposal defines parental alienation disorder as "a mental condition in which a child, usually one whose parents are engaged in a high conflict divorce, allies himself or herself strongly with one parent, and rejects a relationship with the other parent, without legitimate justification."
The weekend conference at the Mount Sinai School of Medicine is the brainchild of Joseph Goldberg, who is based near Toronto and in 2008 founded an organization called the Canadian Symposium for Parental Alienation Syndrome.
Goldberg runs a consulting service for lawyers and parents litigating issues related to parental alienation. In his online biography, he says he "fought one of the most brutal case of parental alienation in Palm Beach County history" during a child-custody dispute with his ex-wife in Florida that extended from 2003 to 2006.
"This touches lives of more people than anyone imagines," Goldberg said by telephone from Canada. "It's not just about a child turned against a parent, through hatred. This affects grandparents, aunts and uncles, cousins, friends — all of them thrown out when a child rejects a parent."
Some of Goldberg's allies doubt the psychiatric association is ready to include parental alienation in its manual. New York-based psychologist Amy Baker, who has written a book about parental alienation, suggested the association might "play it safe" and decline to recognize it for fear of provoking feminist groups. However, Goldberg is hopeful.
"There's a long way to go over the next few years before they make a final decision," he said. "There will be enormous pressure. ...I think it will be difficult for the APA not to include it."
Parental alienation surged onto the pop-culture radar screen a few years ago as a consequence of the bitter divorce and child custody battle involving actors Alec Baldwin and Kim Basinger. Baldwin was harshly criticized by some feminist groups for citing parental alienation syndrome as a source of his estrangement with his daughter.
The concept is a source of confusion and division in the legal profession, as some lawyers try to evoke parental alienation and others challenge that tactic.
Texas Supreme Court Justice Debra Lerhmann, chair of the American Bar Association's family law section, said the issue of possible alienation can be raised in child custody proceedings whether or not any such phenomenon is classified as a disorder by health professionals.
"Anyone who's in this business knows there are situations where that in fact is happening — and sometimes it's alleged but is not happening," she said. "Even if it's not in the manual, relevant evidence can still be brought in."
Meier, the George Washington law professor, has urged judges to be cautious in how they allow the topic to be raised in cases where one estranged parent is accused by the other of abuse.
"You've got to assess the abuse first, without poisoning it with a claim of alienation," Meier said. "Only after abuse is ruled out do you then move on to the question of alienation."
Elizabeth Kates, a Pompano Beach, Fla., lawyer who deals often with child custody cases, is skeptical of the role parental alienation can play in such disputes: "It's a very easy claim to make ... but the problem arises when it's used in court to obscure the investigation of whether there's been abuse."
She said the initial impetus for recognition of parental alienation syndrome came in large part from the fathers' rights movement, but suggested much of the momentum now comes from psychologists, consultants and others who could profit if the concept had a more formal status in family court disputes.
"It's monetary," Kates said. "These psychologists and therapists make huge money doing the evaluations and therapies."
___
HOMEOWNERS COULD SEE LOAN MODIFICATIONS
Homeowners in foreclosure case could see loan modifications
USA TODAY
11/18/2010
By Julie Schmit and Stephanie Armour
More homeowners may get home loan modifications under a potential settlement being discussed between banks and state investigatorsprobing improper foreclosures, but big hurdles remain, real estate experts say.
The 50 state attorneys general are investigating whether loan servicers used faulty documents to justify tens of thousands of foreclosures. News of preliminary settlement talks between banks and the investigators broke earlier this week, but Iowa Attorney General Tom Miller, who's heading the probe, says any settlement may be months away.
To get more loans modified, lawmakers and regulators will have to find ways to appease mortgage investors, who lose money if a loan's principal is reduced. Many modifications now involve lower interest rates or longer repayment periods. Such issues are likely to be discussed Thursday at the second congressional hearing this week on the nation's foreclosure crisis.
The slow pace of loan modifications has been widely noted. In the second quarter, companies that service loans initiated 273,419 modifications, according to the Comptroller of the Currency. That was up 18% from the first quarter. Loan modifications in the second quarter represented 13% of seriously delinquent borrowers. Increasing modifications is expected to be a big part of any settlement, if one is reached. But issues that'll have to be overcome are likely to include:
DUAL TRACKING
Many times, homeowners pursue loan modifications while a foreclosure against them moves forward. This so-called dual-track process is required by many mortgage investors and is an industrywide practice, according to written testimony that is expected to be delivered Thursday by Rebecca Mairone, Bank of America' s default-servicing executive. She says the bank wants "to be a partner" with the state attorneys general to change that industry practice.
Ending it completely would require buy-in from investors. They want the best possible return in the shortest amount of time so that homes don't deteriorate and lose more market value, says Anthony Sanders, professor of finance at George Mason University. What's more, there can be numerous investors in a pool of mortgages. Reaching agreement with them all will be difficult, says Robert Hager, a lawyer in Reno who represents homeowners.
FEES
When a homeowner defaults, banks often tack on extra costs for late fees or required insurance to protect the lender. Those costs can be very high, says Diane Thompson at the National Consumer Law Center. Because banks recover fees upon foreclosure, they may have more incentive to foreclose than to modify a loan, she says.
SECOND LIENS
When a borrower seeks a loan modification, a different lender holding a second lien on the property frequently blocks it, because its interest could be wiped out or diminished. If a loan is modified, the first lien holder who may take a loss will want the second lien holder to take one, too, says Adam Levitin, associate law professor at Georgetown University. He says banks don't want to write down those losses.
USA TODAY
11/18/2010
By Julie Schmit and Stephanie Armour
More homeowners may get home loan modifications under a potential settlement being discussed between banks and state investigatorsprobing improper foreclosures, but big hurdles remain, real estate experts say.
The 50 state attorneys general are investigating whether loan servicers used faulty documents to justify tens of thousands of foreclosures. News of preliminary settlement talks between banks and the investigators broke earlier this week, but Iowa Attorney General Tom Miller, who's heading the probe, says any settlement may be months away.
To get more loans modified, lawmakers and regulators will have to find ways to appease mortgage investors, who lose money if a loan's principal is reduced. Many modifications now involve lower interest rates or longer repayment periods. Such issues are likely to be discussed Thursday at the second congressional hearing this week on the nation's foreclosure crisis.
The slow pace of loan modifications has been widely noted. In the second quarter, companies that service loans initiated 273,419 modifications, according to the Comptroller of the Currency. That was up 18% from the first quarter. Loan modifications in the second quarter represented 13% of seriously delinquent borrowers. Increasing modifications is expected to be a big part of any settlement, if one is reached. But issues that'll have to be overcome are likely to include:
DUAL TRACKING
Many times, homeowners pursue loan modifications while a foreclosure against them moves forward. This so-called dual-track process is required by many mortgage investors and is an industrywide practice, according to written testimony that is expected to be delivered Thursday by Rebecca Mairone, Bank of America' s default-servicing executive. She says the bank wants "to be a partner" with the state attorneys general to change that industry practice.
Ending it completely would require buy-in from investors. They want the best possible return in the shortest amount of time so that homes don't deteriorate and lose more market value, says Anthony Sanders, professor of finance at George Mason University. What's more, there can be numerous investors in a pool of mortgages. Reaching agreement with them all will be difficult, says Robert Hager, a lawyer in Reno who represents homeowners.
FEES
When a homeowner defaults, banks often tack on extra costs for late fees or required insurance to protect the lender. Those costs can be very high, says Diane Thompson at the National Consumer Law Center. Because banks recover fees upon foreclosure, they may have more incentive to foreclose than to modify a loan, she says.
SECOND LIENS
When a borrower seeks a loan modification, a different lender holding a second lien on the property frequently blocks it, because its interest could be wiped out or diminished. If a loan is modified, the first lien holder who may take a loss will want the second lien holder to take one, too, says Adam Levitin, associate law professor at Georgetown University. He says banks don't want to write down those losses.
Tuesday, July 27, 2010
Bankruptcy can save your house from foreclosure
Bankruptcy can save your house from foreclosureBy Les Christie, staff writerJuly 24, 2010: 10:58 AM ET
NEW YORK (CNNMoney.com) -- Slick TV commercials and online ads tell delinquent borrowers that they can save their homes by filing for personal bankruptcy. But is it true -- or just too good to be true?True!
Bankruptcy can bring foreclosure proceedings to a halt, end harassment from debt collectors, and give borrowers time to make up missed payments and reorganize their finances. In some cases, bankruptcy can also help mortgage borrowers save their homes permanently.
It's not, however, going to help every troubled homeowner. If, for example, the homeowner's biggest problem is not enough money, bankruptcy is not going to solve that.
"It's the best tool there is for people behind in payments but who have ongoing income," according to Binghamton, N.Y., attorney Peter Orville, "those who had been making payments and who could be making payments again."
Halting the process
The first thing a bankruptcy filing accomplishes is to stop the foreclosure process. Lenders can't foreclose or even try to collect debt until permitted to do so by the court.
But first, you have to decide what type of bankruptcy to file for. There are, basically, two types to choose from: Chapter 7 and Chapter 13.
A Chapter 7 bankruptcy delays foreclosure. but eventually it usually results in the liquidation of most assets, according to attorney Stephen Elias, author of "The Foreclosure Survival Guide." Borrowers almost always lose their homes in a Chapter 7.
Some bankruptcy attorneys, like New York-based David Pankin, prefer Chapter 7 because it gets rid of all unsecured debt, leaving only secured debt, such as mortgages, exempt. In this scenario, borrowers still owe their mortgage payments but they can likely afford to make them because all the other debts have been discharged.
But for most experts, Chapter 13 is usually more effective at helping people keep their homes. It gives them time to repair their finances, usually three to five years, during which the court agrees to an income-based budget with monthly payments made to trustees.
The trustees pay the bills, first paying off the secured debt. After that, the trustee pays off unsecured debt, starting with back income taxes.
Next in line comes unsecured debt like credit cards and medical bills. By then, there's usually little cash left and these bills are paid at less than the full rate, often as little as five cents on the dollar.
Borrowers, if they kept up on their payments, can emerge from bankruptcy with their homes still in their possessions.
One thing courts cannot do is "cram down" loan balances on primary residences. That is, reduce mortgage debt to what the home is worth. Neither can they lower interest rates, in most cases, nor lengthen the term of the loans.They can, however, "strip off" second mortgages, like home equity loans or lines of credit, when home values fall below the first mortgage balances, according to Elias.
"This allows the judge to get rid of the second mortgage," he said. "If there's not enough equity to secure the second, it becomes unsecured debt."
That can be a huge advantage for borrowers. Homeowners may have, for example, a $200,000 first mortgage balance and another $50,000 on a home equity loan. If the home value has dropped to less than $200,000, the judge could rule that all $50,000 of the second is unsecured. Then, it can be paid off at the same pennies-on-the dollar as other unsecured debt.
But there are other downsides. Bankruptcy can lop as much as 240 points off credit scores. And bankruptcies can remain on credit reports for 10 years, said Pamela Simmons, a California real estate attorney, while all other black marks disappear after seven years or less.
Fending off deficiencies
There is also a potential tax advantage to filing for bankruptcy rather than going to foreclosure, according to Simmons. When a home is repossessed and the lender forgives the portion of the mortgage balance above its market value, a tax liability can be triggered. Any difference between what people borrow and what they repay is considered income.
Congress is temporarily allowing that unpaid debt to be forgiven -- but only for money specifically spent on the home purchase or on home improvement.
Millions of people, however, refinanced mortgages or took out home equity loans and used the money to fund vacations, pay college tuition, buy cars or boats or simply to live the good life. That money is taxable.
Simmons had a recent client who was allowing his lender to foreclose on him and called her about the timing, asking whether he had to vacate by the day of the auction.
In passing, she asked him how much he owed on the house. He said he bought it for a million but had taken out another $2 million, most of which had not been spent on the house. When she told him he would owe taxes on it both to Uncle Sam and the State of California, he was dismayed She rushed him into her office and they did the paperwork so he could file for bankruptcy.
"If they discharge that deficiency in bankruptcy, you don't owe tax on it," said Simmons.
Bankruptcy can save your house from foreclosure
NEW YORK (CNNMoney.com) -- Slick TV commercials and online ads tell delinquent borrowers that they can save their homes by filing for personal bankruptcy. But is it true -- or just too good to be true?True!
Bankruptcy can bring foreclosure proceedings to a halt, end harassment from debt collectors, and give borrowers time to make up missed payments and reorganize their finances. In some cases, bankruptcy can also help mortgage borrowers save their homes permanently.
It's not, however, going to help every troubled homeowner. If, for example, the homeowner's biggest problem is not enough money, bankruptcy is not going to solve that.
"It's the best tool there is for people behind in payments but who have ongoing income," according to Binghamton, N.Y., attorney Peter Orville, "those who had been making payments and who could be making payments again."
Halting the process
The first thing a bankruptcy filing accomplishes is to stop the foreclosure process. Lenders can't foreclose or even try to collect debt until permitted to do so by the court.
But first, you have to decide what type of bankruptcy to file for. There are, basically, two types to choose from: Chapter 7 and Chapter 13.
A Chapter 7 bankruptcy delays foreclosure. but eventually it usually results in the liquidation of most assets, according to attorney Stephen Elias, author of "The Foreclosure Survival Guide." Borrowers almost always lose their homes in a Chapter 7.
Some bankruptcy attorneys, like New York-based David Pankin, prefer Chapter 7 because it gets rid of all unsecured debt, leaving only secured debt, such as mortgages, exempt. In this scenario, borrowers still owe their mortgage payments but they can likely afford to make them because all the other debts have been discharged.
But for most experts, Chapter 13 is usually more effective at helping people keep their homes. It gives them time to repair their finances, usually three to five years, during which the court agrees to an income-based budget with monthly payments made to trustees.
The trustees pay the bills, first paying off the secured debt. After that, the trustee pays off unsecured debt, starting with back income taxes.
Next in line comes unsecured debt like credit cards and medical bills. By then, there's usually little cash left and these bills are paid at less than the full rate, often as little as five cents on the dollar.
Borrowers, if they kept up on their payments, can emerge from bankruptcy with their homes still in their possessions.
One thing courts cannot do is "cram down" loan balances on primary residences. That is, reduce mortgage debt to what the home is worth. Neither can they lower interest rates, in most cases, nor lengthen the term of the loans.They can, however, "strip off" second mortgages, like home equity loans or lines of credit, when home values fall below the first mortgage balances, according to Elias.
"This allows the judge to get rid of the second mortgage," he said. "If there's not enough equity to secure the second, it becomes unsecured debt."
That can be a huge advantage for borrowers. Homeowners may have, for example, a $200,000 first mortgage balance and another $50,000 on a home equity loan. If the home value has dropped to less than $200,000, the judge could rule that all $50,000 of the second is unsecured. Then, it can be paid off at the same pennies-on-the dollar as other unsecured debt.
But there are other downsides. Bankruptcy can lop as much as 240 points off credit scores. And bankruptcies can remain on credit reports for 10 years, said Pamela Simmons, a California real estate attorney, while all other black marks disappear after seven years or less.
Fending off deficiencies
There is also a potential tax advantage to filing for bankruptcy rather than going to foreclosure, according to Simmons. When a home is repossessed and the lender forgives the portion of the mortgage balance above its market value, a tax liability can be triggered. Any difference between what people borrow and what they repay is considered income.
Congress is temporarily allowing that unpaid debt to be forgiven -- but only for money specifically spent on the home purchase or on home improvement.
Millions of people, however, refinanced mortgages or took out home equity loans and used the money to fund vacations, pay college tuition, buy cars or boats or simply to live the good life. That money is taxable.
Simmons had a recent client who was allowing his lender to foreclose on him and called her about the timing, asking whether he had to vacate by the day of the auction.
In passing, she asked him how much he owed on the house. He said he bought it for a million but had taken out another $2 million, most of which had not been spent on the house. When she told him he would owe taxes on it both to Uncle Sam and the State of California, he was dismayed She rushed him into her office and they did the paperwork so he could file for bankruptcy.
"If they discharge that deficiency in bankruptcy, you don't owe tax on it," said Simmons.
Bankruptcy can save your house from foreclosure
Monday, July 12, 2010
Teach Your Teen Paycheck Savvy by Linda Stern
A great article authored by Linda Stern of CNN Money:
Teach Your Teen Paycheck Savvy
(Money Magazine) -- Congrats! Your kid landed a summer job in this tight, tight economy.
Now, of course, he'll have that $7.25 an hour burning a hole in his pocket. That's where you step in: "Parents have a real opportunity to help teens learn to manage that first paycheck," says Mari Adam, a Boca Raton, Fla., financial adviser. "I can't think of a better learning experience." Share some solid financial strategies with your teen now, and your child may even have some cash left over come September.
Have The Tax Talk
Better explain the harsh realities of gross vs. net before your teen gets any big ideas about what she'll spend her wages on. She may not yet understand that taxes will be withheld from every paycheck. So sit down with your child to go over that first pay stub, explaining how and why taxes are taken out, as well as the difference between income taxes (which most teens are likely to get back when they file tax returns) and FICA taxes (which they won't). "This will be a real shock to them," says Adam.
Take It To The Bank
Help your kid open two bank accounts -- one savings, one checking. Spend time together comparing fees and rates online, looking specifically for a no-fee checking account meant for teenagers. You'll have to co-sign the accounts, but it's worth it so your kid can start learning to use an ATM card and keep his balance in the black. (Just don't forget to mention the exorbitant costs of using another bank's ATM.)
Your child may balk at an analog check register but might enjoy tracking expenses online via Mint.com. To motivate him, explain about the $30 overdraft fees the bank will rapidly bestow if he messes up budget calculations. And remind him that at minimum wage, it would take most of a day's work to recoup that expense.
Share The Savings Secret
Deferred gratification is an important lesson. Your teen may not be inspired to stash cash for retirement but may be swayed to the savings habit with a near-term goal, like an iPod Touch or a limo for homecoming. Help her do the math so that she'll know how much to set aside per paycheck to afford her prize by summer's end. Show her how to have that automatically transferred from checking to savings every pay period. As an incentive, offer to match your child's contributions.
Avoid Micromanaging
Blowing that first paycheck on shoes that will be out of style before the next check arrives is a rite of passage, isn't it? It's also a "very good lesson," says Rob Gordon, a Coconut Grove, Fla., financial adviser. So let kids have space to make spending decisions, even if they'll end up with buyer's remorse.
There's nothing like having wasted your own hard- earned cash to make you more careful with your money next time.
Teach your teen paycheck savvy
Teach Your Teen Paycheck Savvy
(Money Magazine) -- Congrats! Your kid landed a summer job in this tight, tight economy.
Now, of course, he'll have that $7.25 an hour burning a hole in his pocket. That's where you step in: "Parents have a real opportunity to help teens learn to manage that first paycheck," says Mari Adam, a Boca Raton, Fla., financial adviser. "I can't think of a better learning experience." Share some solid financial strategies with your teen now, and your child may even have some cash left over come September.
Have The Tax Talk
Better explain the harsh realities of gross vs. net before your teen gets any big ideas about what she'll spend her wages on. She may not yet understand that taxes will be withheld from every paycheck. So sit down with your child to go over that first pay stub, explaining how and why taxes are taken out, as well as the difference between income taxes (which most teens are likely to get back when they file tax returns) and FICA taxes (which they won't). "This will be a real shock to them," says Adam.
Take It To The Bank
Help your kid open two bank accounts -- one savings, one checking. Spend time together comparing fees and rates online, looking specifically for a no-fee checking account meant for teenagers. You'll have to co-sign the accounts, but it's worth it so your kid can start learning to use an ATM card and keep his balance in the black. (Just don't forget to mention the exorbitant costs of using another bank's ATM.)
Your child may balk at an analog check register but might enjoy tracking expenses online via Mint.com. To motivate him, explain about the $30 overdraft fees the bank will rapidly bestow if he messes up budget calculations. And remind him that at minimum wage, it would take most of a day's work to recoup that expense.
Share The Savings Secret
Deferred gratification is an important lesson. Your teen may not be inspired to stash cash for retirement but may be swayed to the savings habit with a near-term goal, like an iPod Touch or a limo for homecoming. Help her do the math so that she'll know how much to set aside per paycheck to afford her prize by summer's end. Show her how to have that automatically transferred from checking to savings every pay period. As an incentive, offer to match your child's contributions.
Avoid Micromanaging
Blowing that first paycheck on shoes that will be out of style before the next check arrives is a rite of passage, isn't it? It's also a "very good lesson," says Rob Gordon, a Coconut Grove, Fla., financial adviser. So let kids have space to make spending decisions, even if they'll end up with buyer's remorse.
There's nothing like having wasted your own hard- earned cash to make you more careful with your money next time.
Teach your teen paycheck savvy
Thursday, July 1, 2010
Great Co-Parenting Tips to Consider
Every once in a while, I find an article that can stand alone as being a great reference on a particular topic. I felt the artilce about family therapist Terry Real by ABC news writer Suzan Clarke would be a great read for those parents trying to find the right course on co-parenting. Here is the aticle:
How to Co-Parent Successfully When Your Relationship Is Over
Kids Benefit When You Get Over Your Anger for Your Ex, Terry Real Says
Terry Real offers parents dealing with difficult divorces parenting advice.
Celebrity couples are raising their children together, even though their own relationships are on the rocks. So can people raise kids together after a breakup?
Family therapist Terry Real appeared on "Good Morning America" to talk about the concept of co-parenting.
He answered some questions and offered advice for parents who are experiencing -- or who have experienced --a bad breakup.
Terry Real's Co-Parenting Tips
Think of divorce from a child's perspective. What's the worst thing about a parent moving away, aside from the hurt that causes? For a child, that is having to constantly move his or her things to one parent's house or the other, Real said. To effectively co-parent, both parents need to live near to each other so children don't have to travel too much or too far.
Related
Establish a routine for the children. The children are already traumatized by the breakup of the family, so they need stability in their lives. Have the same rules in both houses, Real said. That means if a child can't watch TV in one parent's house after 9 p.m., that rule should apply in the other house.
Minimize differences in wealth. In a divorce situation, the spouse with the most money needs to be generous and ensure that the living arrangements in both houses are similar. It's not an act of generosity to your ex, but to your children, Real said. Large discrepancies in lifestyle create bad dynamics, because children may flock to the wealthier household, or they may feel guilty about the less wealthy one.
Don't be too friendly. Be clear that you are divorced. If you both show up at the kids' events, that's to be expected. But there is a difference between showing up at the same soccer game and getting together for dinner -- or sleeping over. Don't send mixed messages to your children, Real said.
If you truly dislike your ex, you have to get over it. Even if you had a terrible marital relationship, you can still rise to the occasion as co-parents, Real said. He urged parents not to overshare about their ex-spouse's faults to the children. Co-parents should treat each other as business partners.
Don't Vent in Front of the Kids
If parents are worried about issues of abuse or mistreatment, they should take those concerns directly to the other parent first, and go to the lawyers afterward.
Don't expect the relationship to improve after the divorce, he said. The issues that led to the split may still be there.
Don't vent your anger in front of the children. Save it for a friend or your therapist. Recognize that the co-parenting relationship is a marathon and not a sprint, and that you remain bonded for life through your children.
How to Co-Parent Successfully When Your Relationship Is Over
Kids Benefit When You Get Over Your Anger for Your Ex, Terry Real Says
Terry Real offers parents dealing with difficult divorces parenting advice.
Celebrity couples are raising their children together, even though their own relationships are on the rocks. So can people raise kids together after a breakup?
Family therapist Terry Real appeared on "Good Morning America" to talk about the concept of co-parenting.
He answered some questions and offered advice for parents who are experiencing -- or who have experienced --a bad breakup.
Terry Real's Co-Parenting Tips
Think of divorce from a child's perspective. What's the worst thing about a parent moving away, aside from the hurt that causes? For a child, that is having to constantly move his or her things to one parent's house or the other, Real said. To effectively co-parent, both parents need to live near to each other so children don't have to travel too much or too far.
Related
Establish a routine for the children. The children are already traumatized by the breakup of the family, so they need stability in their lives. Have the same rules in both houses, Real said. That means if a child can't watch TV in one parent's house after 9 p.m., that rule should apply in the other house.
Minimize differences in wealth. In a divorce situation, the spouse with the most money needs to be generous and ensure that the living arrangements in both houses are similar. It's not an act of generosity to your ex, but to your children, Real said. Large discrepancies in lifestyle create bad dynamics, because children may flock to the wealthier household, or they may feel guilty about the less wealthy one.
Don't be too friendly. Be clear that you are divorced. If you both show up at the kids' events, that's to be expected. But there is a difference between showing up at the same soccer game and getting together for dinner -- or sleeping over. Don't send mixed messages to your children, Real said.
If you truly dislike your ex, you have to get over it. Even if you had a terrible marital relationship, you can still rise to the occasion as co-parents, Real said. He urged parents not to overshare about their ex-spouse's faults to the children. Co-parents should treat each other as business partners.
Don't Vent in Front of the Kids
If parents are worried about issues of abuse or mistreatment, they should take those concerns directly to the other parent first, and go to the lawyers afterward.
Don't expect the relationship to improve after the divorce, he said. The issues that led to the split may still be there.
Don't vent your anger in front of the children. Save it for a friend or your therapist. Recognize that the co-parenting relationship is a marathon and not a sprint, and that you remain bonded for life through your children.
Monday, June 28, 2010
Child Custody: Consequences of Interference with Custodial Time
One of the most important aspects of successful parenting after a separation or divorce is ensuring that the children have quality and uninterrupted time with both parents. Quality time encompasses the development of a meaningful time share that is honored by both parents. Unfortunately, there are times a parent fails to understand their role as ambassador for their children: a parent may behave in inappropriate and harmful ways by frustrating the parenting time with the other parent and say and do things that negatively influence the child and damage the relationship between the child and the other parent.
The family law courts have zero tolerance for this kind of bad behavior. Over the last few decades, the courts have addressed parental alienation and time share frustration in a number of ways. Since the court recognizes the extreme importance that the child maintain a good and nurturing relationship with both parents, the court will issue orders to preserve that relationship.
Co-parenting counseling, counseling with the child and parent and other therapeutic interventions may be the best course to correct the situation. The family law judge has the power to issue these and other tailor made orders for the protection of the child and the preservation of child's relationship to the parents.
If the offending parent persists in this emotionally damaging conduct, More extreme measures can be implemented by the court which can include restricting the offending parent's time with the child and restraining orders on the parent's conduct.
In re Marriage of Hartmann (6/23/10) 2 Civ B215917, Div 6 (Gilbert) 2010 WL 2510383 is a recent published California family law opinion of how the court interprets inappropriate conduct and how to address the behavior in this case with restraining orders.
In this case the father asked the court to issue an order restraining mom from, among other things, “ ‘interfering with [father's] custodial time.’” In support of his request, father claimed that mom told the children “every detail of the trial,” after which the children told him that they believed that “he won because he lied on the stand,” that he sought joint custody so that he’d pay lower child support, and that he and mom could ignore the family law custody and school placement orders.
At hearing on these issues, both parents presented evidence. When the hearing ended,the trial court concluded that mom alienated the children from father by word, deed, and demeanor. Accordingly, the judge granted father's request for a restraining order. At a later hearing father filed a contempt, asserting that mom persisted in interfering with his custody time. Father claims that mom refused to tell him where one of his children was, and mom continued to talk to the children about attending boarding school when the court issued an earlier order allowing them to attend public school.
Mom moved to vacate father's restraining order, claiming that the order not to "interfere" with father's time was vague and ambiguous.The court denied her motion and again ordered mom restrained from interfering with father's custody time. Mom appealed and the appellate court held that the term “interfere” is not ambiguous and that the restraining order did not violate mom's right of free speech because other California family law cases establish that the family law court has the authority to restrict a parent's speech in order to protect children.
If a parent is denying visitation, saying harmful things to the children and /or in other ways frustrating the parent child relationship, the family law judge has the power to take action. Knowing what to say as well as when and how to present your custody issues to the court will control the outcome of the court's orders. For these reasons, it is critical that you have a skilled family law attorney on your side assisting you on bringing your case before the court.
The family law courts have zero tolerance for this kind of bad behavior. Over the last few decades, the courts have addressed parental alienation and time share frustration in a number of ways. Since the court recognizes the extreme importance that the child maintain a good and nurturing relationship with both parents, the court will issue orders to preserve that relationship.
Co-parenting counseling, counseling with the child and parent and other therapeutic interventions may be the best course to correct the situation. The family law judge has the power to issue these and other tailor made orders for the protection of the child and the preservation of child's relationship to the parents.
If the offending parent persists in this emotionally damaging conduct, More extreme measures can be implemented by the court which can include restricting the offending parent's time with the child and restraining orders on the parent's conduct.
In re Marriage of Hartmann (6/23/10) 2 Civ B215917, Div 6 (Gilbert) 2010 WL 2510383 is a recent published California family law opinion of how the court interprets inappropriate conduct and how to address the behavior in this case with restraining orders.
In this case the father asked the court to issue an order restraining mom from, among other things, “ ‘interfering with [father's] custodial time.’” In support of his request, father claimed that mom told the children “every detail of the trial,” after which the children told him that they believed that “he won because he lied on the stand,” that he sought joint custody so that he’d pay lower child support, and that he and mom could ignore the family law custody and school placement orders.
At hearing on these issues, both parents presented evidence. When the hearing ended,the trial court concluded that mom alienated the children from father by word, deed, and demeanor. Accordingly, the judge granted father's request for a restraining order. At a later hearing father filed a contempt, asserting that mom persisted in interfering with his custody time. Father claims that mom refused to tell him where one of his children was, and mom continued to talk to the children about attending boarding school when the court issued an earlier order allowing them to attend public school.
Mom moved to vacate father's restraining order, claiming that the order not to "interfere" with father's time was vague and ambiguous.The court denied her motion and again ordered mom restrained from interfering with father's custody time. Mom appealed and the appellate court held that the term “interfere” is not ambiguous and that the restraining order did not violate mom's right of free speech because other California family law cases establish that the family law court has the authority to restrict a parent's speech in order to protect children.
If a parent is denying visitation, saying harmful things to the children and /or in other ways frustrating the parent child relationship, the family law judge has the power to take action. Knowing what to say as well as when and how to present your custody issues to the court will control the outcome of the court's orders. For these reasons, it is critical that you have a skilled family law attorney on your side assisting you on bringing your case before the court.
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