Did your Legal Separation case already reach Judgment? Did you receive the Notice of Entry of Judgment? If not, the case is still open and you may amend it to convert it to a divorce. If Judgment has already been entered in your separation case, then you will need to file a new case for Dissolution.
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Bifurcation of what issue? "Bifurcation" means you are separating one issue and asking the Court to first adjudicate that issue. Typically, when people say "bifurcate status", they mean asking the Court to Order them divorced (by status), even before the rest of the issues, such as custody, support, and property division have been resolved. In your case, unless I am missing something, there doesn't seem to be a need to bifurcate status since your ex-husband is terminally ill. Marriage...
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Did the Order specify a place for dropoff of the children? It needs to. You can file an OSC to modify and ask the court to clarify.
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No, once a divorce is filed, it doesn't matter who filed it. Either of you can move forward with the case. So the choice is not in your hands only. But, in order for a Judgment of Divorce to be granted, lots of things need to happen. So, that would be the important fact to focus on when you move forward in the divorce proceedings.
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Did your wife "dismiss" the case? if so, you will need to refile. If not, the case is still pending, and within the statutory limit, so yes, you can proceed with the divorce as originally filed.
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When you say "affect", do you mean "avoid"? In California, child support depends on many factors, but the two most prominent are income and timeshare. If moving in with your girlfriend means an increase in timeshare of the child, then your child support obligations will be decreased comparably with an arrangement where you have less timeshare. This is under the theory that if you spend more time with your child, you will be spending more money on him/her, so your support payments should be less.
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Please seek counseling. If both people are willing to work on the marriage, it will work. Unfortunately, if she files for divorce or annulment, you cannot "stop" it because California is a no-fault system, and one person may file for divorce without the other's consent. The good news for you is that annulments are very difficult to obtain, and if based on fraud, must go to the "essence of the marriage", which usually refers to consummation of the marriage. You may certainly file for legal...
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Was he properly served? If so, you must file Proof of Service, and then proceed to file an Entry of Default. Because custody is involved, your county court may require a Default hearing. I would hire an attorney. If you cannot afford one, I would read your local rules, do all the research you can, and utilize the Family Law self-help services that many courts offer.
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The consequences are that you may be able to file a motion to compel her to provide documents, and request fees for doing such. After you are able to document her true income, you can ask for support and division of property based on the accurate information - AND, you may be able to get attorneys' fees for her lack of cooperation.
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You will need to start a case by filing the Petition for legal separation, AND file an Order to Show Cause for temporary support and attorneys' fees immediately. You are absolutely entitled to spousal support, and since this is a long-term marriage of which you were the supported spouse, the support will continue for a very long time. You may also request the Court order him to pay for the expenses of hiring a lawyer.
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