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Divorce and Creditors

Divorce and Creditors

Well you gave it your best shot, but that stripper you married right out of boot camp was just not a relationship built on a solid foundation.

 

And now they are coming after your money...

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OR

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You owe money to someone, and they are after your money...

I

MPORTANT NOTE:

  • It is STRONGLY recommended that you obtain a lawyer if you are going through a divorce.

 

VA Disability

VA disability is NOT considered an asset.

The Supreme Court in Mansell v. Mansell found that VA disability is NOT an asset that can be divided.

The Supreme Court in Rose v. Rose found that VA disability may be counted as income. However, stating that courts cannot directly force the VA to pay parties. See Apportionment.

 

Alimony

VA disability IS counted as income.

 

Child Support

VA disability IS counted as income.

 

Garnishment

VA disability CANNOT be garnished, UNLESS the Veteran elects to receive VA disability instead of their military retirement. And even then, only in cases of:

  • Alimony

  • Child support

  • Retirement asset itself was divided

 

Apportionment

Functionally, the same outcome as a garnishment.

The VA CAN apportion VA disability to a former spouse who applies for apportionment to satisfy alimony and/or child support. The Veteran can appeal the VA's decision to apportion their disability benefits - particularly if the apportionment will cause undue hardship to the Veteran.

 

Military Retirement

IS considered an asset and can be divided.

 

Alimony

Military retirement IS be counted as income.

IMPORTANT NOTES:

  • Even if you were married under 10 years, a court may still deem your retirement income and it CAN be targeted!

  • No more than 50% of disposable retired pay can be made payable by all court orders to former spouse(s).

 

10/10 Rule

If you were married to your spouse for at least 10 years over the course of your military service, DFAS can pay the former spouse directly.

If you were married for less than 10 years over the course of your military service, some other arrangement MUST be made to pay the former spouse.

 

Child Support

Military retirement IS counted as income.

 

Garnishment

Military retirement CAN be garnished ONLY in cases of:

  • Alimony

  • Child support

  • Retirement asset itself is divided

IMPORTANT NOTE:

 

Misc.

For the bits and bobs of separation.

 

Thrift Savings Plan (TSP)

Is an asset that can be divided.

 

Health Care

Upon the completion of a divorce/annulment the former spouse loses their eligibility for CHAMPVA, if applicable.

Your former spouse may still be eligible for TRICARE.

IMPORTANT NOTES:

  • Ensure you remove your former spouse as a dependent from your VA disability. Failure to do so will result in an over-payment which you will be required to return to the VA!

  • Update your life insurance beneficiary, unless you want it to continue to pay out to your former spouse. Remember, what it says on the policy TRUMPS what your will may say!

 

FAQ

How much VA Disability/Retirement can I expect to be apportioned/garnished?

  • Generally 20-50%, but current income levels and support of both parties are up for consideration in this figure.

 

References

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