Specialty Areas

Question 1

Chapter 7 Bankruptcy

Answer 1

A type of bankruptcy ling that allows you to liquidate all of your assets and use the proceeds to pay o your debts, erasing your debts
that cannot be paid o in full. All unsecured debts are forgiven and all assets over statutory minimum protected amounts are forfeited.

Question 2

Chapter 13 Bankruptcy

Answer 2

Type of bankruptcy ling that allows you to develop a pay-o plan over a 3-year period. Some of the debts may be discharged.

Question 3

COBRA

Answer 3

Consolidated Omnibus Budget Reconciliation Act (COBRA) law passed in 1986. It allows an ex-spouse to continue to receive health insurance coverage from his/her former spouse’s employer if the employer has at least 20 employees, for up to three years after the divorce. Premiums for this coverage are typically higher than when they were covered under the employer’s plan. It should be noted
that the normal COBRA provision states that if an employee leaves or is red from a job, he or she can get health insurance from that company for 18 months. However, in the case of a divorce it is extended to three years or 36 months.

Question 4

Credit

Answer 4

The measure of trustworthiness of repayment of a loan based on income, past credit history, assets, and liabilities. It should be noted that after the divorce the former spouses’ past credit history might affect the ex-spouse.

Question 5

Qualified Principal Residence Indebtedness

Answer 5

Any debt incurred in acquiring, constructing, or substantially improving a principal residence and which is secured by the principal residence. It also includes any debt secured by the principal residence resulting from the refinancing of debt incurred to acquire, construct, or substantially improve the principal residence but only to the extent the amount of debt does not exceed the amount
refinanced debt.

Question 6

Secured Debt

Answer 6

A loan secured by collateral to reduce the risk associated with lending. Mortgages and auto loans are examples of secured debt.

Question 7

Tax Debt

Answer 7

For three years after a divorce, the IRS can perform random audits of joint tax returns. The divorce agreement should provide instructions and where the money should come from if an audit is involved.

Question 8

Unsecured Debt

Answer 8

A loan that is not secured