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  1. #1
    Join Date
    Jul 2017
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    11

    Default Settling Divorce Debts from Equity in the Marital Home

    My question involves a marriage in the state of: Iowa
    In my divorce decree it states that I got the house. I am ordered to attempt to refinance every two years until I can get it out of his name. We also split the debts. I took 38000 in student loans. He was left with one loan of 17000.
    He did not pay his loan. After getting several calls and letters I called the collections company as it was affecting my credit too. After some discussion we agreed to sign paperwork for a judgement to be entered if he did not pay. He paid for a few years. He changed jobs and stopped paying. The judgement was entered and a lien was placed on my house.
    In the process of refinancing I found the lien. I asked him to pay it off and informed him that it was contempt of court. He stated that jail sounds like a vacation.
    I can pay the lien with my refinance but it cuts into the HELOC I need to improve my home.
    Is it considered a gift if I pay it? How do I get my money from him and still refinance ( need his name off my house!!)?

  2. #2
    Join Date
    Sep 2005
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    98,660

    Default Re: Settling Divorce Debts from Equity in the Marital Home

    Quote Quoting ericalinn1
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    In the process of refinancing I found the lien. I asked him to pay it off and informed him that it was contempt of court. He stated that jail sounds like a vacation.
    What you will want to do is to go to a divorce lawyer with your court order from the divorce, and whatever you signed in relation to the judgment, to have those documents reviewed. Do not assume that if you pay off the judgment debt, that you will be able to recover the money from the equity -- and it sounds like your ex- is not going to voluntarily pay the money under any circumstances, and that he may fight to get half of the equity (before any deduction for the judgment debt) even though you would be applying the money to a debt that he was supposed to pay.

    Without seeing the actual judgments, it's dangerous to make any assumption about how a court might regard a voluntary payment made by you.

    My inclination would be to bring a post-judgment motion asking the court to explicitly grant permission to pay the debt out of your ex's share of the equity at the time of closing, with that payment to be deducted from his share of the equity. I would not normally expect it to be difficult to get that sort of order. Perhaps after reviewing the documents your lawyer will tell you that it is safe to proceed without first going to court, but given that we're talking about many thousands of dollars and an ex- who is not fiscally responsible I would be cautious about doing anything that could result in giving him any sort of angle or claim to try to get more money than the amount to which he is otherwise entitled.

  3. #3
    Join Date
    Jul 2017
    Posts
    11

    Default Re: Settling Divorce Debts from Equity in the Marital Home

    He is not entitled to any equity in the house per our divorce decree.

  4. #4
    Join Date
    Jul 2018
    Posts
    544

    Default Re: Settling Divorce Debts from Equity in the Marital Home

    Quote Quoting ericalinn1
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    Is it considered a gift if I pay it?
    No.

    Quote Quoting ericalinn1
    View Post
    How do I get my money from him and still refinance ( need his name off my house!!)?
    Sounds like your ex is a deadbeat, so you might never be able to get the money. I suggest conferring with your divorce attorney to see if you can get a modification of the divorce decree based on your ex's multiple violations.

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