Bailout Plan For Divorced And Separated Fathers

by Milandria King, JD of Cordell & Cordell, P.C.

Sometimes the multitude of issues which arise when one is involved in a dissolution action may seem overbearing. Fathers often reach the hard realization that they were once capable of providing for an entire family, however, due to a division of assets and possible maintenance of two separate households, available funds often begin to rapidly dwindle.

Following are some suggestions as to where single or divorced fathers can go to get their own bailout relief in these difficult economic times.

 

Divorced and separated men often find that the mortgage on the marital home is not easily maintained on one income, especially when considering other financial obligations that must be met. Men experiencing difficulty making mortgage payments should first call their lender, many of which are interested in assisting homeowners in financial trouble. Depending on your needs, you might ask to renegotiate your mortgage agreement or add additional payments to the end of your loan.  In order to do this, you must contact the company which currently holds your loan. Most companies will have a home preservation or foreclosure avoidance and protection department which you will need to contact directly. In addition, some taxpayers find it more helpful to use the services of a counselor who will negotiate on your behalf. Your local government office should have information to assist you or you can contact organizations such as HousingHelpNow.org, hud.gov, or Neighbor Works America in order to find a certified housing counselor.

When it comes to cars, some men as evidenced by the popularity of NASCAR and custom auto shows, possess an undeniable passion. Should you find yourself behind on automobile payments, this does not necessarily mean you will be losing your car. If you own more than one car, decide whether the additional vehicle is necessary or simply a want. By selling one of the cars, you will not only increase your available funds pool with the decrease in automobile insurance, but also generate income which may be applied towards other monthly obligations such as support payments. If you do not own your additional vehicle but you have a lease agreement, calculate the cost of buying out of the lease. This will assist you in realizing the costs of either staying in the lease or the benefit of parting ways with the vehicle.

The rising cost of health insurance may cause many budgets to experience monthly shortfalls, especially if you are self-insured. If you are the party responsible for health insurance for children, and your employer does not provides family coverage through their plan, you may investigate the availability of the State Children’s Health Insurance Program (SCHIP). This is a federal program which is administered by the states, and it provides affordable insurance for children. More information on this program is available through your state insurance department.

In the event you are not covered by insurance, consider a high-deductible, policy labeled as a catastrophic policy with a health savings account. The objective is to purchase a plan with low premiums and, hence, high deductibles. This plan will be paired with a savings account that allows you to reserve pre-tax dollars for use in paying the deductible or other qualified expenses. If the funds are not used, they remain in this account for use when required by you. Several options regarding these policy types are available at InsureMe.com.  

If you become unexpectedly unemployed, you may seek to apply for a self-insurer policy. Several companies offer these plans, most of which are characterized by tremendously high premiums.  If you have been denied coverage, you will need to inquire as to the reasoning behind the denial of coverage.  For instance, should erroneous information be made a part of your medical records, you will need to have those records amended to show updated information as soon as possible in order to have a reasonable chance to solve the problem.  You may want to contact your doctor’s office to discuss any misinformation with the doctor’s file administrator.  In the alternative, you may need to apply with a different provider that may offer more options for you should you have a pre-existing condition. As a final consideration, you may want to visit your state insurance department or contact them for details on available plans.  

The Consolidated Omnibus Budget Reconciliation ACT (COBRA) will allow you to remain on your company’s insurance in the event of unemployment. The requirements are that you may be covered for generally up to nine months as long as you pay 35% of the premiums. Before the enactment of the economic stimulus package, employees were required to sign up to remain on the group health plan within approximately sixty days of leaving the company and be responsible for the entire premium obligations. As a caveat, COBRA generally only takes effect when companies have twenty or more employees.  In addition, the company must still be operational and offering a group insurance plan.  After the nine month period referenced earlier in this article expires, you can continue COBRA for an additional nine months, but you will be required to cover the cost of the full premium. The appropriate forms may be obtained from your employer or the insurance company.

In order to develop your own personal bailout plan, take the opportunity to revisit your monthly budget, and decide where savings may be realized.

 

Milandria King is a Senior Attorney in the Memphis, Tennessee office for Cordell & Cordell, P.C., admitted to practice law in the state of Tennessee. Additionally, Ms. King is admitted to practice before the Sixth Circuit Court of Appeals and before the United States District Court for the Western District of Tennessee. Her memberships include the American Bar Association, the Memphis Bar Association, the Tennessee Bar Association, as well as the Association for Women Attorneys.

Read more about Ms. King.