Hangnbyathread

OK First.....I agree with the selling part.

I also agree that he can make a mess of it if he bails on a mortgage ya'll are both on. Make you toxic for credit for years.

So all of that is spot on. Its the safest way to get this over with.

Now then. As a another way to consider this and bear with me because this is what we call creative problem solving, in real estate situations. Something I do know something about from doing a few.

These are not easy but can be accomplished. If you want to consider keeping the property leveraged to your advantage, for future gains consider the following.

1st a little about rules of title. Not trying to make anyone sound like I'm teaching a 3rd grade class here, but many don't understand the more basic aspects of real estate assets.

The bank holding your mortgage holds a 1st position on liens. Called senior.

With the exception of the IRS, nobody can take a senior position for as long as they hold that mortgage. So they don't typically care about anything junior. Meaning anything junior can be there and they still get paid.

Disclaimer: Partition laws vary from state to state, but the essence of them are generally the same. Consult an attorney in your area should you wish to consider this.

You can, by court order have your name partitioned from him for any legal contracts and titled assets. A partition is meant to sever your ties from him as far as any future obligations, as well as future equity (plus or minus). This is generally done as part of family law but it must be asked for and granted. It isn't an assumed given. The bank won't put up a fuss unless he stops making payments to them. At which time they will squawk that you are contractually bound and they will want "someone" on that contract to pay. Meaning YOU if he doesn't. You could litigate that if the time comes, arguing that the bank was notified of the partition action and made no objection. The courts will recognize it, but the bank will still claim contractual law. Litigation will ensue. You should win it, but that doesn't mean you will.

So those are the fundamentals of it. Now to get to the creatives.

After a legal Partition is granted, you can use the tool of a Promissory note with the added tool of lien rights should he not honor the note. But they both need to be done at once. It would be spelled out in the note under the security section. And I'd recommend a real estate attorney help with it as they have to be able to be enforced and litigated on when the time comes. When the PN gets executed and recorded, so does a "Notice of Financial Interest" that shows the PN is secured by lien rights in the event of default. But you can't do this unless and until the partition gets accomplished. Otherwise you'd be foreclosing on yourself. You can't legally do that.

But it will essentially, force him to honor the note, or you can foreclose on him if he doesn't. If you foreclosed you become the sole owner of the mortgage that is senior. The one in place now. But you also get the house back without him being able to be able to put up much of a fight.

You can make the terms of the Promissory note very much in your favor, to keep the leverage in your favor. If he doesn't like the terms, then you go back to STBX and say OK, we sell and you move out etc. But if you want to keep the kids in the house etc. (the argument he is currently using) , here are the terms that protect me (you) that I am offering you.

He at this stage will see this as a way to keep the house in his possession, the kids there etc. But you will in effect hold a 2nd position, that must be satisfied if he sold, re-financed, re-married etc. None of it will cause him a problem as long as he holds up his end of the deal. If he doesn't, you will want and have a lot more tools to use to protect you.

I have very successfully used PN's to keep a property less attractive to anyone but me.

So ask yourself, and this is a genuine thing. Is there enough potential upside to the equity growth to risk this? Its a valid question. This could become a large part of your retirement etc down the road.

Or can you sell it, and invest it in a growth fund that will match that over time.

Often a bona fide IRA, over time, will yield you the same outcome of future taxed capitol gains, of that anticipated skyrocketing equity.

I don't know your age etc. so I can't comment on tax rules that may apply to this for you.

sauerkraut

Thank you for the cautionary tale, CT88. I am so sorry that your find yourself in that situation and grateful that you shared it with me so I can learn from your experience.

And thank you, HBT, for a valuable lesson in real estate law and creative solutions. I appreciate having it spelled out to me like that so that I can review it until it makes sense, because it's definitely complicated.

If he comes back from having met with his attorney today still saying that he wants to try to work out a deal, and I decide that the upsides might be worth it to me if I'm not risking losing the equity in our house (our children's college education, btw), then I will meet with a real estate attorney to see what might be feasible.

Thank you very much.

Hawkeye13

Given the red flags you are already seeing, seems you still stand to lose
a lot more than money if his addiction continues to worsen, which it will untreated.

Peace of mind and freedom from another person's possibly poor choices
are important factors to weigh besides money IMO

sauerkraut

Update: according to STBXAH, he and his attorney had a productive meeting today in which they discussed options because, as he puts it, "First order is what is best for the children, despite your assertions to the contrary, which frankly are misguided and offensive." That would be my claim that his continued drinking is a large part of what got us to this point, including the potential negative effects on the kids, and that the best option for them is for me to have my assets safely separated from his, so regardless of what he chooses to do, I can take care of them.

He's ignoring my statement that he needs to buy me out or we sell the house. My attorney says that if he won't agree to the sale, I'll have to take him to court.

I'm waiting to see his proposal first. The saga continues.

AnvilheadII

maybe it's time to let the attorneys talk this out and you remove yourself from trying to haggle with the STBX??? he is not going to be rational or accept your proposal, not directly from YOU anyways. it is now a legal matter......so let the Legal Beagles take over.

PuzzledHeart

Ditto Anvil. I would minimize any conversation with the STBXH. A good friend once told me "You can't reason with crazy." So why even try?

And please don't presume that
1) your STBXH informed his lawyer of the "mugging".
2) your STBXH's lawyer actually stated that your assertions were "misguided." Your STBXH may have just added that for spin.

dandylion

I second the idea of letting your attorney talk to his attorney.....
I found that to be VERY helpful when I was divorcing my children's father.....

dandylion

atalose

Yeah get yourself off that hamster wheel and stop talking to him about this. Tell him he needs to contact your attorney from now on regarding any kind of settlement.
Don't reply to any of his emails and if he calls and begins talking about it tell him to contact your attorney and hang up. You are going to have to retrain him by holding firm to your boundary with your own actions.

sauerkraut

I take your point about letting attorneys deal, and in many ways that seems like it would be preferable.

However, he and I are using a mediator, with consulting attorneys, and so far, so good. For example, my attorney didn't think a judge would insist on the sobriety monitoring, but the mediator (and co-parenting therapist) got him to do it. On the house issue I realize that I may have to file a motion to get him to agree to sell, but for now I'm still trying to work through mediation.

I keep my communications to a minimum, however, regarding the children and my positions on the items under discussion.

hopeful4

Good for you. I understand. I negotiated many things into my divorce decree a judge would have never agreed to. It was stressful during all the wheeling and dealing, but worth it in the end. And has added protections for my children that has been worth everything I gave up.

Hugs.

sauerkraut

Thanks, Hopeful and everyone else, for your words of support. I need that today, as the wheeling and dealing continues. I really do wonder on days like today whether or not I should hand it over to the attorneys and the court. So far the mediation process and co-parenting counselor have been fairly productive, but every step forward takes so much effort to get him to budge. And now there are two big items, continuing the sobriety monitoring (which is supposed to end in 2 months, but from which he's only demonstrated that he can stay sober while being monitored), and selling the house so we can split the equity.

Yeah, maybe I just hand it over to the attorney now.

At this point she thinks I should file for sole custody, and she thinks I'll get it given his recent drunken mugging and police report. All I want is for him to continue the sobriety monitoring, so that I'll know he's sober when he has the kids (whom I don't want to separate from their dad).

It would be nice to be dealing with a partner that had complete access to his mental faculties . . . but if that were the case, we wouldn't be in this mess.

Thanks for the support--

teatreeoil007

I'm not slamming lawyers, but here's something to think about: Most lawyers are well aware of how their bread is buttered and where the money comes from. She may see it from that angle: (potential increased profit from the house gaining in value)while he is not seeing the whole picture of how alcoholism can cause a person to go down, down, and down...along with with everything in their life going down...including money...and most everyone and everything tied to the alcoholic going down with them.

hopeful4

One thing I will say about a local attorney is that they are familiar with the local judges and can usually give a pretty accurate opinion of how things will likely turn out. I know when I was wheeling and dealing with my X there sure felt like days that I just could not go on. Only you know how much YOU can deal with, and really you likely know best when he is done dealing as well. I knew with my X I had pushed as far as I could go. I would say in your situation my guess would be that if he does not agree to these last things, it's worth it to turn it over to the attorneys.

It's a no brainer that he will either have to sell the house or buy you out. No judge is going to force you to be on a home loan on a home you don't live in, with an active alcoholic. So he is definitely not thinking that out too well if he thinks he stands a chance w/that.

The sober monitoring can go either way, and I would say your attorney knows best in that situation.

Many hugs. Keep moving forward, one step at a time!

Hangnbyathread

Let me caution you on this thinking. All the judge can do is force him to refinance it or sell it. If he is unable to refinance for any number of reasons, the judge can't take anyone off a mortgage. It is a contract made to a mortgage holder. All parties are contractually bound by that.

However the judge can force him to pay the mortgage, as part of final jusgment. Or other methods of telief.

However until the mortgage is satisfied, all parties on the mortgage are considered responsible for it.

So qualifying for a new mortgage may be difficult wit that liability still there.

So all of this often doesn't get addressed in family court, unless you specifically ask them to rule in a specific way. Often the judge's don't address nor care about this type thing. It can be problematic for a party well after a divorce has been finalized.

sauerkraut

HBT--
For clarification, in our case, given that we have a lot of equity in our house and a relatively small mortgage (1/6th the value of the home), could the judge force the sale? My STBXAH has offered to refinance and give me part of my half of the equity now with the rest in a promissory note, but I feel like we should sell it and move on. You're saying the judge could only insist that STBXAH do one or the other?

Hangnbyathread

Lets try it this way.

If ya'll (you and your stbx) can't draw up an agreement concerning the house, that you both can agree to, then the courts will rule on it during asset allocation at final settlement. The judge will say you get X amount of the value of the home and your STBX will get Y amount. This will be done by the judge saying it either be sold outright, or it be re-financed on his part and you net the equity due you that way.

There may be some objection to a refinance in that if you feel your X or he feels he can't refinance, then a sale would be ordered.

Refinancing in todays times isn't as easy to do as it was say 5 years ago. It can go wrong in a dozen ways and that would put you both back into courts to resolve the house again.

The above bolded part is where ya'll can draw up something thru the attorneys and present that as an agreed to part of the divorce agreement.

Essentially the judge is there to solve, by way of ordering, any parts of your divorce that ya'll can't agree to. Often its house splits, kid issues, and ongoing after marriage support payments that can never be agreed on. So the judge tries to find the quickest easiest way to equitably dispose of it. In a family court environment. Often they could care less of other non family law consequences that may arise from the ruling.

I'll give you an example that happened for me. The judge ordered a 50/50 split of all tax liabilities that arose from the short sale of the houses. In theory that seems totally fair...half and half. So no reason to argue about it.

Which ended up amounting to about 48K in taxes. I paid my 24K.

4 years later when I filed my taxes, I got a letter from the IRS, stating I owed 24K plus penalties now. I promptly showed them my return where I paid it prior. They promptly responded with, yes but your ex wife didn't pay her taxes so we want them from you now.

To which I promptly produced my final divorce decree to show it was a 50/50 split. To which they responded with, that is family law, we are tax law, and since she isn't paying and the taxes were both of your SSNs, we will come after you as jointly responsible.

We (The IRS and I)ended up getting it worked out but I was beyond upset that a divorce decree didn't mean crap the way it was written. This is where I learned about getting a legal partition. I got that, and that got me cleared away from any links of joint liabilities. But I should have done the partition during the divorce proceedings specifically. A family law judge won't offer it up on their own. They either don't know about them, don't care about it, or assume ya'll don't want it. The attorneys won't think about them, unless you ask them to. It just adds a layer of work that they would rather avoid if your ignorant about it.

Look do as much right as you can during a divorce. Otherwise you spend years cleaning up loose ends afterwords.

P.S. My ex of 10 years now will probably have this paid off in another 5ish years. They garnish her monthly at a small amount. Adding penalties each month. So it cost her for about 10 or so years.

Take that *******.

LexieCat

That isn't (or shouldn't be) true. If they don't advise a client about those kinds of considerations it may be legal malpractice.

You're right that the judge won't do it--it isn't his/her job to decide what is in litigants' best interests. That's the job of the lawyers, or of the parties, themselves. SOME judges might raise the issue if one party is represented and the other is not, just to ensure that the pro se (self-represented party) isn't at an unfair disadvantage. But ultimately lawyers should be advising their clients about it. And I've yet to see a lawyer unwilling to incur billable hours--they make money doing that work.