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Divorce Issues/Divorce Decree contempt

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Question
Hi,
I am divorced 2 years now and we are in the process of selling our family home.  My Ex wife and family moved out of the home two months ago.  They had remained in the home up till then.  My ex was to pay the first and second mortgage according to divorce decree as well a line of credit against the home, HELOC.
May was the last month my ex paid the first mortgage and has not paid a cent to the other loans.  We are presently 88 days with no payment.  Bank said they would begin foreclosure at 120 days.
I am afraid of my credit rating getting killed if the home forecloses prior to selling. I hope to purchase a home in the near future so I am asking if I should take my ex to court guilty of contempt?  Thank you.
Greg

Answer
Hi Greg.

So, glad you asked this question! You should not waste another day hoping things will get better...Please note: I am not an attorney and unable to provide legal advice. So, I provide my answer from experience as a Realtor and my own divorce proceedings. As you are already aware, if the divorce papers require her to pay the mortgages, her residence does not change that requirement. The only thing that could change that would be a judgment from the court, or an agreement between the two of you that you would both have to sign and have recorded with your county -- if this is an option in WI.

You are absolutely right! Your credit is going to get killed if the home forecloses. This will mean your ability to re-purchase, to rent another home, to purchase a car, get a credit card - you see where I'm going on this. It will also kill the ex's credit - as it appears both of you are on the loans. Quite candidly, the late payments are not doing either of you any favors either. Most mortgage lenders are going to want to see at least 12 months of on time payments before providing you with your next mortgage. As these are already late, you will mostly likely be a year out from the last payment that is more than 30 days late. And, the longer the period, the harder it is on your record. Meaning, you are staring at 90 day lates already - unfortunately, bad news.  

The one sliver lining of hope re: the above is being able to share with a new lender what has taken place via a letter of explanation and a copy of your divorce papers. You MAY be able to find a lender who is willing. Your best bet moving forward:
-- If you haven't already, ask the ex to pay up, or negotiate a joint payment. I know you won't be keen on this. But, it may save you in the long run.
-- Notify your attorney immediately and have your ex ordered to pay up. Hopefully, she has the funds.
-- Ask each of the 3 lenders to suspend the mortgages until you can work out payments.
-- Ask your attorney if it is appropriate to let the HELOC lender know the other mortgage payments have not been paid. They will most likely want to stop the line of credit as they will be third in line to get paid if it comes to a bankruptcy. And, they most likely will not get paid at all in a foreclosure. Both you and that lender will want to stop 'the bleeding' asap.
-- If you haven't already, talk to the ex about selling your home NOW! Or, change the papers and you move back in and take over the payments.

I wish I had a magic wand to make this better for you, Greg. I know it must be terribly stressful and disheartening. But, please know you are on the right track re: trying to take care of it. The sooner the better. Should you and the ex agree to sell the home, and it is within the parameters of the divorce decree for you to do so, let me know and I will refer a Realtor to you.  

Good luck, Greg! 'Hope that helps!
Kathryn

P.S. You may want to also try lawyers.com, or similar for additional insight.

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Kathryn Hisert; Realtor

Expertise

As a Realtor specializing in assisting divorcing homeowners, I am able to provide "What to do about the house?" options. There are trade-offs to every transaction in life. How to equitably divide property at a time when emotions are running high can keep people from making the right long term decisions, and/or even considering how many there are. There are advantages and risks (emotional and financial) to each decision that needs to be uncovered. I can assist in this process. Please note: I am a Realtor and am only professionally qualified to answer questions directly related to the decision making process of what to do with your primary, investment and vacation property. My website provides details.

Experience

Certified Real Estate Divorce Specialist (1 of less than 10 in California) Certified Distress Property Expert

Organizations
N. San Diego County Association of Realtors California Association of Realtors National Association of Realtors

Publications
www.HouseInDivorce.com

Education/Credentials
CREDS (Certified Real Estate Divorce Specialist) CDPE (Certified Distress Property Expert)

Past/Present Clients
Confidential

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