Divorce and Real Estate

Is My Credit Tied to My Ex-Spouse?

I call this: “Real Estate 101: What Not to Do in a Divorce.” My family lawyer advised me to have our divorce decree state that my ex-husband would re-finance me off of the mortgage within three months after our divorce was finalized. This is often recommended by lawyers. However, I was not dealing with an ex-husband who behaved normally. I assumed that the court order meant that my ex-husband HAD to follow through and it would be no problem. It’s a court order, right? No. My ex-husband believed that the laws don’t really apply to him. Not only did the re-finance deadline come and go but my ex-husband proceeded to go into foreclosure, in the next year and a half, taking my good credit right with him. And then, this is where he got really creative, he decided to forge my name on a new mortgage for over $800,000. He did this over eighteen months after the refinance deadline date on the divorce decree. It took me three years to piece this all together and get it into criminal court. My ex-husband had found an unsuspecting notary who approved a mortgage loan document (with my forged signature) without me being there. She never asked for identification for me or that I be present for this bank loan document to be signed. One of my criminal attorneys later asked if I wanted to prosecute that notary public. We had a sworn statement from the notary that she let him forge my name on the mortgage. I chose not to go after her believing that she, too, was another victim of my ex’s criminal behavior. I gave her a pass. I knew her name and I could have had her prosecuted. I regret that now because her actions changed the trajectory of my financial well-being and my life and I truly believe that neither she, nor the lawyer for whom she worked at the time, have any idea how that one move devastated my life. I was making over six figures per year and I found myself not even being able to get a car loan or re-finance my own home. Because of that notary’s negligence, in addition to my ex’s criminal behavior, I spent eighteen months in criminal court and family court trying to get two judges to find my ex in contempt of court and charge him with bank forgery. Criminal court cost me over $40,000 and Family Court proceedings cost me $35,000. This all happened while I tried to keep my head above water in a very demanding career and raise three small children. The District Attorney eventually got involved and joined my legal team. Unfortunately, High Conflict people who have the financial resources can delay and pay expensive criminal lawyers to drag out their cases and file motion after motion. After eighteen months of court delays by the other side, the D.A. signed off on a misdemeanor charge of attempted forgery for my ex. Attempted forgery when we had a notary public who testified that my ex had forged the bank loan. I have to imagine that the D.A. had bigger fishes to fry?

Meanwhile, up in family court, my lawyer filed a contempt motion (three years after my ex was supposed to refinance) and he tried to tell the Judge (who happened to be a former partner of my ex’s lawyer) that there was a criminal case against my ex and that he had forged my name on a new mortgage instead of re-financing me off of the original mortgage. The judge said that he didn’t know anything about those proceedings in criminal court and that they were “separate”. This judge refused to hear any reference to the criminal case and simply would not acknowledge it. We had spent over a year in family court trying to prove contempt on my ex-husband’s part. Now it was over three years after our divorce and my ex had ruined my credit (I now had a bad debt to equity ratio among other things) and over $75,000 in criminal and family court fees. Finally, after a year and a half in family court trying to prove contempt against my ex for ignoring the refinance clause in our divorce decree, the judge made it known that he was going to rule that our marital home should be sold to get my name off of the mortgage. This started a campaign of rage and terror by my ex which included harassing real estate agents (I had two agents quit out of frustration and fear for their reputations) and removing the ‘For Sale’ sign and putting it in my yard (across town) in the dark of night. My agent called me and said that the sign looked like a gorilla had jumped on it. I told her that one had.

A few days before the final hearing date, my ex’s lawyer sent an email to my real estate agent informing her that my ex had a tax lien on the house for over $600,000 so the sale would not go through. That was it. No explanation for why this information was not brought forward to the court when it had been placed on the home six months earlier. His lawyer just emailed my realtor. No letter to the court. So, on the hearing date, his lawyer calmly told the judge about the lien. Not before, just right there in court. That day is like a murky nightmare but I distinctly remember the judge leaning over and saying to me, “Well, the IRS wins, you lose.” I was pro se by that time and I just stood there numb. My husband never was held in contempt for not re-financing me off of the mortgage. My name was now on a mortgage for over $850,000 that I was tied to until my ex-husband either paid off or paid off his tax lien of $600,000+. My credit would never recover. I was told that my only option was to declare bankruptcy. Unless I wanted to wait for him to pay off his huge tax lien and then somehow refinance. Meanwhile, I could not even get a credit card or bank loan or re-finance my own home. I remember sitting with my lawyer asking how I could possibly seek compensation for all of my court fees and financial ruin. I kid you not, my lawyer looked me in the eye and said, “For $25,000, I could finish this.” My jaw dropped. Finish what? My desire to live? I had been given no compensation for the financial and psychological trauma that I had endured because my ex forged my name instead of refinancing. All that I had trusted in the court system and the people that I had paid and put my faith in to just do their jobs, was now lost. I was now a victim of the family court system. To add insult to injury, my lawyer later sued me for fees. Update: my ex’s tax lien is now over one million dollars, he has gone into foreclosure for the fourth time, and he is declaring bankruptcy for the third time.

If I would have known that I should have insisted that all real estate ties between myself and my ex-husband before our divorce, I would have done so. I know that my example is one of the extreme ones. However, I tell it to make people aware of the cost of leaving unfinished financial items in a divorce. I should have been counseled to completely sever all ties with my ex-husband and secure my good credit for myself, my kids, and eventually my future job search. If you are on a mortgage with your ex-husband and they decide not to pay, your credit suffers, not your lawyer’s. Finish all real estate transactions before you divorce.

Colleen Honquest, Certified Divorce Coach

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