Archive for the ‘Divorce Mediation’ Category

Home Mortgages and Divorce in the State of Minnesota

Wednesday, September 30th, 2009

With the state of economy today many people are dividing up debt rather than assets in divorce.  One of the biggest decisions divorcing parties must make is what to do with their home.  It is more difficult these days for one party to qualify for a mortgage or to refinance a home than it was a few years ago. 

 Alan Burke is a Loan Officer for American Mortgage and Equity Consultants, Inc.  He says, “If there is a home involved in a divorce, the home is awarded to one party or the other.  The divorce decree can stipulate who the responsible party is for the home and the mortgage, but the credit impact does not end there for the other party, if the mortgage was taken out in both names.  The other party will still have the mortgage reporting on their credit report, and will incur the ill effects of negative credit rating if the court-ordered party does not pay the mortgage as required.  

“A mortgage is a contract.  It is a commitment to repay the money that was loaned to you. Mortgage companies do not recognize divorce decrees, they recognize the parties who applied for the mortgage and expect all applying parties to adhere to the terms and conditions of the mortgage they signed for at the closing of the loan.  Therefore, it is important to decide before the divorce what decision to make regarding the mortgage and how it can affect your personal credit.”

 

Questions to ask yourself about your home and divorce

Does it make more sense to sell the house before the divorce?  Can one person qualify on their own to refinance the mortgage in just their name? Can one person afford the whole mortgage and their other financial responsibilities on their own after the divorce?  If it’s not you, do you trust the other person to maintain timely payments on the mortgage, and other debts that are in both of your names?  (just like the mortgage companies, credit card companies do not recognize divorce decrees, either) 

 Weighing your mortgage and credit options are very important when a relationship ends. Maintaining good credit will help ease the transition after the divorce.  Being realistic of what your capabilities are to repay debt and what the other parties capabilities will be are very important to consider while determining post divorce responsibilities.

Effect of the Economy on Divorce Rates

Thursday, August 27th, 2009

The recent downturn in the economy has affected the amount of divorces over the past year. Our office has seen two trends:

1) Some couples are waiting to file for divorce until the market rebounds. They are concerned in the lowered value of assets such as the marital home and retirement savings accounts, and want to hold off on filing for divorce until they will be able to get some value out of the property division. Also, they may not be in a position to support two separate households and are stuck living together one way or another. There is an interesting article on this phenomenon here

2) Many couples are trying to negotiate the terms of their divorce settlement on their own, and writing up their own stipulations for the court. They are cutting costs where possible, and saving themselves the cost of hiring an attorney upfront through negotiating on their own.

The second trend may be dangerous, and in many cases it may end up costing you more money in the end. Even if both parties intend for an agreement to mean one thing, if the language is not written properly, the court will interpret the agreement to mean what it actually says. Our office, and that of other family law attorneys in the area, is seeing an increase now in the number of clients that are seeking to modify the agreement that they entered into without counsel. The clients either intended to have some rights reserved in the agreement, or they were supposed to receive something that they have not. The agreement often is written in a way that does not give the client clear recourse in the legal system. When that happens, the client ends up paying much more in legal costs to fix the problem than they would have to avoid the problem to begin with.

There are ways to keep costs low while still using an attorney. For example, a lawyer may be retained for the limited purpose of writing an agreement. The parties come to the attorney with a settlement in mind. One of the parties is formally the client, and the other party is “pro se”, which means that they are unrepresented in the process. This is because in the legal system, an attorney cannot represent both parties to an action.

Another way to keep costs low is if the parties have most details figured out, but have a few sticking points. The attorney is able to advise the client of the legal standards, explain their chances on succeeding on that claim in court, and helping the parties reach a settlement. Again, the attorney only represents one party. However, the costs are significantly lower even for both parties to have attorneys if the parties cooperate outside of the attorney’s office to reach an agreement.

It is not impossible to use the court system to fix problems in original divorce documents. However, it is in your best interest to seek the advice of a lawyer before signing anything. An attorney is able to point out potential problems with agreements that you may not be aware of. An attorney also is able to make sure that you are protecting your rights in a divorce and that all issues are handled in the most efficient way possible.

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- Our Minnesota Divorce Lawyer & Attorney represent clients throughout Minneapolis and Twin Cities including St Paul, West St Paul, South St Paul, Mendota Heights, Mendota, Richfield, Edina, Bloomington, Inver Grove Heights, Woodbury, Oakdale, Lake Elmo, Maplewood, Vandais Heights, Mahtomedi, Cottage Grove, Columbia Heights, New Brighton, Arden Hills, Shoreview, North Oaks, White Bear Lake, St Louis Park, Robbinsdale, Crystal, Bloomington, Burnsville, Apple Valley, Savage, Eden Prairie, Hopkins, Minnetonka, New Hope, New Brighton, Brooklyn Park, Brooklyn Center, Plymouth, Chanhassen and throughout the entire State of Minnesota.