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Broome County Family Law Blog

Study finds 137 million Americans overwhelmed by medical debt

Medical bills are a major problem for people living in New York and across the U.S. In fact, around 137.1 million Americans have endured financial hardship due to medical expenses in 2019 alone, according to a new study by TD Ameritrade.

Researchers from the financial services firm found that medical debt is the top reason that people of all ages consider tapping into their retirement savings. Meanwhile, a separate study found that 66.5% of all personal bankruptcies filed by U.S. adults are linked to medical debt. This is because medical emergencies can leave Americans with staggering bills. For example, one woman said that she blew through $20,000 in savings and racked up tens of thousands in medical debt when she lost her job, became uninsured and suffered a series of medical emergencies, including a heart condition that required surgery.

4 reasons divorce happens after the holidays

The period from Halloween to New Year’s Day is exciting for most families. After all, November and December provide many opportunities to connect with relatives and build memories. Unfortunately, January often brings more than just fresh snow. 

Recent research indicates that divorce filings tend to spike after the holidays. As such, if your marriage is on shaky ground, a winter divorce may be in your future. Here are four reasons divorces often happen immediately after the holidays conclude: 

Bankruptcies on the rise for older adults

Older adults in New York are more likely to have to declare bankruptcy than in previous decades. People 65 and older now make up 12% of people filing for bankruptcy compared to about 2% in 1991. Between 1991 and 2016, there was a 66% increase in people between the ages of 55 and 64 filing for bankruptcy. For people aged 65 to 74, it was a 204% increase.

The increase is largely due to medical bills. One 66-year-old retired handyman is a typical example. He had several injuries that led to medical expenses he could not meet, and he eventually had to declare bankruptcy. His focus was on trying to get his bank to agree to a loan modification that would let him stay in his home of 40 years. Many people lose their savings, and since they may be working less or not at all, they may be unable to recover financially.

Small business owners face challenges during a divorce

When New York couples decide to divorce, the financial consequences can be significant for anyone. However, when business owners with closely held companies are involved, the changes can be even more consequential, not only for each spouse's personal finances but for the future of the business. A divorce can have an impact on the company as a whole and could even lead to its sale or closure as a result of hard decisions during property division. In many cases, investors are requiring startups to show that all partners have prenuptial or post-nuptial agreements covering property division in case of a divorce.

A prenup is one way that people can avoid a severe dispute over a business during a divorce. This does not mean that the financial settlement in such divorces will not be substantial; however, the business itself and its shares may be excluded. In some cases, the company may be divided between both spouses. If they cannot work together or come to a buyout agreement, the company may need to be sold to settle the property division issue. Even when a buyout agreement is possible, the company itself may need to take on debt in order to pay the price for sole ownership.

Three factors that indicate a marriage is headed for divorce

Counseling has helped some New York couples save their marriage. Other couples decide that divorce is their best option. Most who have decided to go the route of divorce will say that it was not an easy decision, especially since there is usually not one single factor that caused the marriage to fail. There are usually red flags that show a marriage is heading toward its end.

Some couples decide that they will stay together because they think it is best for their children despite the fact that they have an unhealthy, combative, or disrespectful relationship. While divorce is not necessarily the solution, it is usually inevitable after the kids grow up and leave home if each partner does not work on the marriage in the meantime. There should be more to a couple's relationship than just the children.

New York gives grandparents sought-after rights

Divorce divides families and may result in a total severance of some of the ties with extended family and friends. When it comes to dealing with former in-laws, however, the trend is much more disheartening.

Grandparents, who once may have played an integral part in the now-defunct family unit, may suffer loss, as well. If the bonds between grandparents and their grandchildren suffer as a result of the divorce, many older adults may wonder if they can do anything to repair it. Under New York statutes, grandparents may petition for legal visitation with their grandchildren. See how this law may work in your situation.

Student loans are sometimes dischargeable in a bankruptcy

New York is home to some of the nation's finest universities, and the students who attend them often take on tens of thousands of dollars of debt to pay their tuition and living expenses. Individuals who are struggling to make student loan payments often believe that this type of debt cannot be discharged in a personal bankruptcy, but this is not always true. While the Bankruptcy Abuse Prevention and Consumer Protection Act does make student loans exempt from discharge most of the time, the 2005 law does allow relief to be granted to prevent undue hardship.

The problem facing bankruptcy filers is that the lawmakers who drafted the bill were not clear about what 'undue hardship" actually means. The Department of Education is working to create a definition to clear up the ambiguity, but determining what is and what is not an undue hardship is currently the job of the courts. Most courts use the Brunner test to evaluate hardship. The test is named after the plaintiff in a 1987 New York bankruptcy case.

The many reasons younger couples are opting for prenups

In the past, prenups were usually associated with very wealthy or famous people. The word itself seemed to be a taboo, but millennial couples seem to be changing that, causing a significant increase in the number of prenups requested. For many New York couples, a prenup might be an option to consider as they plan their wedding and married life.

According to a study by the American Academy of Matrimonial Lawyers that polled lawyers on prenups requested, 62% of lawyers responded that they had experienced an increase in clients seeking prenups. Of those, 51% also indicated that they had seen an increase in millennial couples wanting to sign prenups. The reasons for seeking a prenup vary, and millennials have reasons that go hand in hand with their generational trends.

Losing health insurance doubles the chances of bankruptcy

Most of the people in New York and around the country who file personal bankruptcy do so because of overwhelming medical debt, and many of them find themselves in an unsustainable financial situation after losing their health insurance coverage. Individuals often lose their health insurance after leaving a job or going through a divorce, and a coverage gap of only two years makes bankruptcy twice as likely according to a recent study.

Researchers from the University of Denver and the University of Missouri discovered the link between health insurance coverage gaps and personal bankruptcy filings after examining 12,500 Chapter 7 and Chapter 13 cases using data from the Bureau of Labor Statistics. The study worries experts because about 20 million Americans could lose their health coverage if the Affordable Care Act is ruled unconstitutional. The matter is currently before the U.S. Court of Appeals for the Fifth Circuit.

Gray divorce rates on the rise as seniors live longer

In New York and across the country, life expectancy has reached new heights, but for married couples, this also means a longer life together. For some older couples, this extra time together means experiencing new things and growing closer, but for others, it means growing apart. As a result, so-called 'gray divorces" have become more common among seniors, and the challenges these types of separations pose to high-asset couples can be unique.

Gray divorce rates have more than doubled in recent years, and today, approximately one quarter of all marriages among couples over the age of 50 end in divorce. In many cases, these divorces involve shared assets and financial accounts, potentially raising questions about issues surrounding spousal maintenance, divesting interest in shared business ventures and the distribution of funds from investment accounts.

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