Divorce judgments, unlike many court judgments, are often not the final word in a matter, particularly when support or children are involved. Depending on the terms of the judgment, litigation can continue for years. Litigation is expensive and exhausting, and is to be avoided if possible. The best way to do that is to draft the initial judgment properly to anticipate and avoid problems. Although no one can anticipate everything, there are certain issues that an experienced family lawyer should address. The poor economy, particularly in the housing market, has produced some rather interesting and significant consequences in Wisconsin divorces.
One issue that has surfaced repeatedly in the last few years is one spouse’s failure to refinance or sell a home, even if required in the divorce judgment. In many instances, one spouse is awarded the marital home and instructed to refinance the mortgage loan to remove the other’s obligation for that debt. Perhaps five years ago, when loans were given out like candy, this was not a problem. The housing crash, and subsequent tightening of the credit and employment markets, put a sudden halt to that practice. Now, what happens if Spouse #1 cannot obtain refinancing because of poor credit, job loss, or the decrease in home value? Worse yet, what if that spouse fails to pay the mortgage? Spouse #2 remains obligated on the mortgage (creditors are not bound by the divorce judgment), and therefore any failure to pay the mortgage will affect both spouses’ credit, as will foreclosure or short sale of the home. If Spouse #2 has already ceded her interest in the home, her leverage is seriously undermined, and remedies are limited (though not impossible).
An experienced divorce lawyer will anticipate this situation, and address it with simple language in a divorce judgment. Options range from establishing a certain date for refinancing, retaining the court’s jurisdiction to address home-related issues, requiring a sale, holding a spouse’s home deed in trust, and other contingencies or incentives. Although the Dane County housing market was not devastated by the downturn, most homes have lost substantial value, and credit is tight. I have confronted this exact issue at least three times in the last few months alone. Each time, the problem could have been avoided by more careful drafting in the original judgment. Rather than drafting a divorce judgment on your own, I encourage you to consult with me to assist with this and other common pitfalls.