Money problems are the number one cause of discord in a marriage - and also the leading cause for divorce. And nowadays, certain factors have aligned that make these times a "perfect storm" for divorce.
How a Divorce Can Bring on Foreclosure
In many cases, the dependent spouse is awarded the family home in a divorce settlement, especially if they have children. What if the support you receive doesn't cover your mortgage payment? You could face foreclosure, in addition to having to deal with a divorce.
If you're a dependent spouse in a divorce, following are three things you need to know about debt, divorce and foreclosure laws.
I. How Spousal and Child Support are Determined in a Divorce
Spousal and child support determination are calculated based on earnings for the last few years. This is somewhere in the three to five-year time frame, depending on your jurisdiction.
And how does this affect foreclosure? If you're a dependent spouse and are awarded the family home, you may be forced into foreclosure, or having to sell. How/why?
Consider this: If the spouse who has to pay support averaged $100,000 a year in salary/income over the last three years, they would be required to pay spousal and child support based on this. But, if they averaged only $40,000 over this time period, they would be required to pay based on this.
Now remember, spousal and child support are calculated by the courts based on earnings for the last few years. So a paying spouse can in essence "lock in" a lower rate by strategically filing when their income is down. This brings us to our next item, which is...
II. Don't Sign Anything
It's important for dependent spouses to know their rights before signing anything. This is especially true in these times because you can literally be signing away thousands of dollars in future support, which could mean the difference between foreclosure down the line, or hanging onto your home.
How is this possible?
The second part to how spousal and child support are determined is that you can renegotiate your divorce settlement when the bread-winning spouse's income starts to improve - if you don't sign away your rights to do so now.
III. Beware of the New Year's Surprise Divorce
Did you know that the New Year is a prime time for divorce filings? It is. It fits when you think about the human psyche.
It's a new year; time for a fresh start. And, if money issues like the stress of a pending foreclosure have exacerbated other problems in the marriage, it's all too easy for one spouse to find themselves on the receiving end of divorce papers.
Consult a qualified attorney about the divorce and foreclosure laws in your jurisdiction before you sign anything.
Read more onÂ divorce and foreclosure.