Spouse and I are discussing whether to sell or refinance with cash out option. He wants home and has made mtg, taxes, ins. payments from DOS to current. Is it just the principal portion of mortgage payment he gets reimbursed for or taxes and insurance as well at time of closing? House has appreciated in value so I have made a claim via equitable distribution for a portion of the distributive property (increase of equity.) There was no equity in the home at date of separation. Can the distributive property be divided 60/40 if couple agrees with 60% to spouse in house and 40% to other spouse? If he keeps the house he gets all equity til now? Thanks.
1 Like
Assuming the house is entirely marital property: If you sell the house, then the net equity would be divided equally except the spouse that paid the mortgage from the date of separation to the date of closing would get a reimbursement for the principal paid on the mortgage during that time. Taxes and insurance are not reimbursed.
Assuming the house is entirely marital property: If the spouse that paid the mortgage after the date of separation and remained in that home after the date of separation keeps the house in final equitable distribution, then the current value would be used to determine the equity, and the other spouse would receive half of the equity. The current value will take into account the passive real estate market increases. You can also determine the passive real estate market increases by getting an appraisal of the date of separation value and comparing that to the current value.
The marital estate can be divided 60/40 if both parties agree and/or a 60/40 division is equitable.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like
Anna, one additional question. Spouse is now considering refi and paying off existing mortgage(both are on mortgage and deed) less marital debts and balance divided equally and he will get the house. My question is whether or not in a refi situation he gets reimbursed for the principal portion of what he has paid on mortgage since separation if the transaction is a refi. If he is reimbursed that would come off first before a final division? Thanks.
In our divorce case, the last pleading with the Court was my Answer and Counterclaim that was filed. I had sent my Inventory of Assets/Debts to Plaintiff’s (spouse) attorney and we had a few back and forth discussions. But in January 2021 his attorney filed a Motion to Withdraw but I never received anything else saying his Motion was granted. So no Inventory by either party has ever been filed with the Court. I am assuming that as long as both parties agree on the refi, we are ok to dispose of the marital asset less marital debts and then make an accounting in the form of a Settlement Agreement, incorporate the Settlement Agreement into a Judgement for Divorce and set the Judgement of Divorce on for hearing? (After I have my portion of the settlement in hand of course.) Assuming I can use a standard NC Marital Separation Agreement form to say who gets what? Thanks.
Typically if a party is keeping the house, they will not be reimbursed for the principal paid on the mortgage from the date of separation since all of the house and its equity is being distributed to that spouse. Normally a reimbursement for the principal paid on the mortgage is when the house is being sold and the proceeds divided.
You can enter the settlement terms in one of two ways: (1) an equitable distribution consent order, or (2) a separation agreement and then dismiss the equitable distribution court claim.
A separation agreement does not need to be incorporated into the absolute divorce judgment. In fact, a separation agreement is rarely incorporated.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like
My proposed settlement goes like this. Spouse is Plaintiff and I am Defendant. Plaintiff has been residing in the house and making the mortgage payments since DOS. Plaintiff is seeking VA refinancing of the house and will be getting a VA appraisal. Current FMV of the house via realtor website is probably higher than what the refinance company believes the actual appraisal be so we will agree to use the appraised value. Am I correct to assume that the settlement calculations should go something like this? Appraised value of house - current outstanding mortgage balance = equity. Plaintiff has made mortgage payments during separation and is current on the mortgage. As I see it, the balance of the outstanding mortgage is, in fact, lower because he made those mortgage payments. Because of that, shouldn’t a portion of the principal payments made by the spouse be deducted from the equity before the remainder is divided equally? Also, wouldn’t the spouse who paid the mortgage payments be able to, either leave his credit for the principal mortgage payments in the form of equity or ask for reimbursement of that portion of principal mortgage payments as part of the cash out at the time of the refinance of the existing mortgage balance plus cash out transaction with the refinance lender? Thanks.
1 Like
I found a Consent Judgment and Order for Equitable Distribution template online. I am representing myself so I would sign my name as Defendant and then my name, Pro Sec, again where it shows Attorney for Defendant? Problem is this. Spouse(Plaintiff’s attorney) has filed a Motion to Withdraw from the case awhile ago and Plaintiff never got another attorney nor has he filed to represent himself. We are in negotiations with a mediator at the present time. So would Plaintiff sign his name as Plaintiff and then sign his name again, Pro Sec, as Plaintiff Attorney or does he need to file the form stating that he is representing himself first? I have done an accounting of assets/debts that I am presenting to my spouse via mediation with the hope that if he agrees, I can then incorporate it into the Consent Judgment. Is there a problem with us both representing ourselves if one of us prepares it, as long as both are willing to sign it? If the Consent Judgment details the specific s of refinance and/or sell of house can we proceed with the refinance or sale before the Consent Judgment is signed? Lastly, with the Consent Judgment in place, how long before we can file for Absolute Judgment for Divorce? Can you ask Judge to sign Consent Judgment and Absolute Judgment for Divorce at same time? If not, how long do you have to wait. We have been separated 7.5 years. Thanks.
1 Like
Typically if one spouse is keeping the house and refinancing the mortgage and that is the same spouse that paid on the mortgage from the date of separation, then there is no reimbursement made to that spouse because the house and all of its equity is being distributed to that spouse.
Instead, the other spouse will receive a distributive award payout that is meant to equalize the net distribution of all of the marital assets and debts.
You can use the current fair market value for the house with the date of separation mortgage balance in determining the distributive award/equalizing payment.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like
If there is no Order to Withdraw, which is the court order that the judge signs releasing the counsel of record from all responsibility and obligation in a court case, then the attorney is continuing to represent that party, or at least that attorney is still the attorney of record in the case.
You can both represent yourselves and it is fine if you draft the consent order as long as your spouse has an opportunity to review it in advance.
It is “pro se,” not “pro sec.”
Yes, you can proceed with the refinance prior to the consent order being entered, but it is usually best to wait until equitable distribution is final, which happens when an equitable distribution court ordered is signed (or a separation agreement with equitable distribution terms is fully executed).
The absolute divorce judgment and equitable distribution consent order can be signed at the same time, however, you will want to check with your county’s family court office or clerk’s office to see what the procedure is for entry of consent orders.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like
Based on your last response, if he is keeping the house and has made all the mortgage payments since separation, he would need to refinance to remove my name from the mortgage and obtain a cash out for my portion of the equity in the house? Correct? Is the amount of the existing mortgage deducted in any way from my portion? And to figure my portion, I take the current value of the house now less what the mortgage balance was at DOS since it has been 7 1/2 years since DOS. That figure then is all my portion? or would it be divided? So is it correct to assume that the person in the house who will be receiving the house has to refinance not only the current mortgage but also my portion of equity to pay me out fully? Thanks. EX: the current value of the house is $200,000 less the mortgage balance as of $113,000 leaving $87,000. Is this entire amount my portion in the house? and the amount spouse would need to add to the current mortgage to cash me out ? Thanks. I just want to make sure my numbers are correct. I have tried to find an actual sample of an accounting of distribution of a marital house online but can’t seem to find one.
If he is keeping the house and has made all of the mortgage payments since the date of separation, then yes, he would need to refinance the mortgage in order to remove your name (there is no other way to remove your name from the mortgage except to payoff the mortgage in full) and refinance for a cashout in order to pay the distributive award you are owed unless he has access to other funds that are sufficient to pay the distributive award.
You are only entitled to half the marital equity. So in your example, if the marital equity is $87,000, you are entitled to 50% of that, your spouse is entitled to the other 50%. If your spouse has no other funds to pay you your portion of the marital equity (the distributive award), then he/she must refinance the mortgage for more (cashout option) in order to pay you what you are owed.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like
Thank you so much for the clarification.
The house is deeded in both names as well as the mortgage so definitely marital status. So assuming the equity is $87,000.and will be divided by 2 ea personal will receive $43,500. Now if the house appraises at say $200,000 less $92,400 current mortgage balance, and lender is giving 100% of appraised value available to loan, assumimg Plaintiff can qualify for refinancing with cash out, then is it considered just buying me out if my interest? and at refinancing the lender writes me a check? Or if he cant obtain financing for all or just part if my share is it then put in Consent Judgment as a distrbutive award and the terms set out? Wouldnt it be wise to have the terms of distributive award secured with a life insurance policy or in some ither way? But what if he doesnt keep paying premiums on policy?
If your spouse can qualify for a cashout refinance option, then the distributive award owed to you is paid at the time of the refinance closing.
If your spouse cannot qualify for a cashout refinance for the full amount owed to you, then there will need to be an agreement on how the full amount is paid to you, and those terms will need to be specifically laid out in the separation agreement or consent equitable distribution order.
A judge would not require that a distributive award be secured by a life insurance policy, however that is something you and your spouse can agree to.
Other ways to ensure payment of the distributive award are to distribute assets in kind (so accounts are transferred from your spouse to you for example rather than your spouse paying you cash) or to put the distributive award payment terms in a court order as opposed to a separation agreement (then you have the contempt powers of the court able to enforce the payment terms).
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like
Anna, Is it ok, assuming we both agree, to go ahead and refinance with a cash out for my 1/2 of equity with a lender without having some sort of written agreement? In other words can we go ahead and negotiate the refi cash out without us being accused of “disposing of marital assets”? Won’t the lender require some sort of proof of how to disburse funds to me, although I am on the current mortgage loan being refinanced as well as on the current deed. I also would not sign any document conveying my 1/2 interest in the property over to spouse until I have a check in hand for my portion of the equity, correct? Thanks.
Yes, this is possible to do now, but you will want to ensure that you are not being listed as a co-borrower, not waiving your marital interest in the property.
Your spouse will likely want some sort of interim separation agreement in place to confirm that you already received your distributive award or the portion you are due from the home, along with a distribution of the home to your spouse.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
When drafting the Consent Judgment and Order for Equitable Distribution, will my portion of the increase in value of the property from DOS to current be listed as a distributive award or is the language part of where the house is listed as his asset assuming the house will be refinanced to pay me my portion. And when I include that he is to refinance but if unable to secure refinance the house is to be sold, all that language is part of the same listing about the property? In other words when the CJ makes reference to him getting house as his asset does everything get described here pertaining to that asset? Or do I show my portion of the increase in value of the house as a distributive award? Confused.
1 Like
The money you are to receive from the house can be stated in either the section about the distribution of the house/refinance of the mortgage or in its own distributive award section. Either would be acceptable, but it’s probably more often found in the section for the distribution of the house/refinance of the mortgage.
Yes, all of the language about the forced sale if he is unable to refinance by a certain date is ordinarily included in the section for the distribution of the house and refinance of the mortgage.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like
Spouse (plaintiff) is retired military and i spouse (defendant).am covered through him as sponsor for my medical insuranc. When divorce becomes final i will lose that coverage. Could i put a provison into the Consent Judgment and Order for Equitable Distribution that he give me a monthly amount to cover medical insurance that i obtain to replace coverage i will lose? If house is to be refi or sold i would definitely receive my portion of equity so would there be any reason to “secure” in some way my portion of equity in CJ? Thanks.
Any funds paid to a spouse for health insurance coverage is an alimony issue instead of an equitable distribution issue. To include in a court order, you would need to have an alimony claim pending.
Your portion of the equity in the house is secured by the court order and the contempt powers of the court. If your spouse does not do as the court order requires him to do, then you could ask the court to hold him in contempt based upon a willful violation of the court order, and he would likely be required to comply or face jail time.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
1 Like