If you have chosen to get a divorce, you will need to address multiple types of financial issues, as well as the legal matters involved in dissolving your marriage. The process of property division can often become complicated, especially if you and your spouse own multiple and different types of property and assets. Retirement benefits are an issue that sometimes can complicate this process, and determining how to divide these assets correctly can ensure that you will have the financial resources you need later in life.

Retirement Accounts, Pensions, and QDROs

Generally, any retirement benefits you or your spouse earned or contributed to during your marriage are part of the marital estate. They will need to be divided alongside your other marital property. These benefits may include retirement accounts provided by an employer, such as a 401(k), or an individual retirement account (IRA), as well as pension benefits earned while you were married.

In many cases, a spouse will be able to keep retirement accounts that are in his or her own name. However, the funds in these accounts may be divided by withdrawing or transferring some of the balance. It is important to understand that if you choose to withdraw funds from a retirement account before reaching the age of 59 ½, penalties may apply, and taxes also must be paid on the amounts that are withdrawn or transferred.

Anyone can encounter unexpected financial problems that can put him and his family in a difficult position. This has been especially true during the COVID-19 pandemic, which has caused millions of people throughout the United States to lose their jobs or suffer health-related setbacks that have affected their income or resulted in large debts. A family that has struggled to pay ongoing expenses may be concerned that it may face foreclosure if they default on their mortgage. Fortunately, homeowners may be able to receive relief through Chapter 13 bankruptcy. By filing for bankruptcy, homeowners may eliminate certain types of debts and avoid losing their homes.

Addressing a Mortgage During a Chapter 13 Bankruptcy

First, filing for bankruptcy will place an automatic stay on any collections by creditors. This will put a halt to foreclosure proceedings that have been initiated by a lender, giving a debtor the necessary breathing room to determine his options. He can then determine what types of debts will be included in his bankruptcy and create arrangements that will allow them to maintain ownership of his home.

During the process of Chapter 13 bankruptcy, a repayment plan will be set up in which a person will pay back some of his debts throughout a period of either three or five years. Once the debtor makes all required payments, he will no longer be required to repay the balance of any unsecured debts that were included in the plan. In addition, any creditor who failed to file notice of its claim will not be required to be paid at all.

If you are getting divorced in Illinois, you and your soon-to-be spouse will be asked to file a financial affidavit with the court. You will be expected to list information about your income, expenses, debts, and assets. Unfortunately, some spouses lie on their affidavits in an attempt to gain a financial advantage during a divorce. Lying about finances during divorce not only is unethical, but also, it is also unlawful. Divorce issues such as property division and child support should be based on accurate, up-to-date financial data. If you are getting divorced, make sure to watch out for signs of hidden assets and other forms of financial fraud.

Keeping Financial Information a Secret

Per Illinois law, you have a right to an equitable portion of the marital estate. This means that you have a right to a fair share of any assets that were accumulated during the marriage. This may include bank accounts, retirement funds, business revenue, profits from investments, and more. One clue that your spouse may attempt to cheat you out of your fair share of the marital estate is a sudden increase in secretive behavior. Rerouting mail to a P.O. box, hiding tax returns and other financial documents, changing online banking passwords, and refusing to discuss finances with you, may all be signs of deception.

The COVID-19 pandemic that began last year caused not only a health crisis but an economic crisis as well. Falling behind on mortgage payments can happen, especially if one’s hours are reduced or he lost his job completely. Missing housing payments can lead to financial hardship and foreclosure.

The U.S. government extended the moratorium on foreclosures through June 30, 2021. The policy also extends the mortgage forbearance window until the end of June and provides up to six months of additional mortgage payment relief for the 2.7 million Americans who are already benefiting from it. There are additional forms of assistance that may help avoid having to go through a foreclosure on your home.

American Rescue Plan

Any reduction or loss in income can make it difficult for many people to come up with the money for essentials, such as food, utilities, and mortgage payments. It is important to note that not everyone is covered under the current forbearance policy. The program only applies to mortgages that are government-backed, which makes up approximately 70 percent of existing single-family home mortgages. Since private-market mortgages are not eligible for the new relief, there may be additional extension of the forbearance and stimulus payments.

COVID-19 caused a global health crisis in addition to an economic downturn. In Illinois, non-essential businesses closed to stop the spread of the contagious virus. As a result, many people found themselves out of work or facing reduced hours and income. Depending on the industry, some companies have permitted their employees to work remotely from home. Similarly, many schools have switched to e-learning, with teachers and students participating online through video conferencing apps such as Zoom or Google Meets. With everyone adjusting to this new normal, divorced parents may be wondering if they can modify their current divorce orders for child support and child custody and visitation (now referred to as the allocation of parenting time and decision-making). Under Illinois law, it is possible to request changes to these types of orders in certain situations.

Child Support and Spousal Support Orders

According to the Illinois Marriage and Dissolution of Marriage Act (IMDMA), a divorce is finalized once a judge issues the official court order, which is commonly known as the decree or judgment. This legal document sets forth asset and property division, spousal maintenance (alimony), and child support. However, after a significant amount of time, the orders may not be appropriate or adequate for the current situation. For instance, if one parent suffers a job loss due to COVID-19, that will likely cause a substantial change in income. If the unemployed parent is making child support or spousal maintenance payments to the other parent, he or she can petition the court for a temporary order modification to reduce that amount. In addition, if the unemployed parent is the recipient of child support and/or maintenance, then that parent may petition the court for an increase in support.

Child Custody Orders and Parenting Time Schedules

Throughout the COVID-19 pandemic, most essential employees still have to work outside of the home, including those in the healthcare, government, and construction fields. However, if an essential employee has younger children who typically attend daycare during the day, many childcare facilities might be closed. If the other parent is furloughed or working remotely and can manage to have the children stay at his or her home during the day, both parents may mutually agree to temporarily change their parenting time schedule. In some cases, a parent who suddenly finds himself or herself out of work may find new employment out of state and then relocate, which could impact the existing allocation of parenting time. As for any order that involves children, a judge will always base his or her decisions on what is in the children’s best interests when making decisions regarding an order for modification.