UGH, complicated divorce

I have a divorce pending that is somewhat complicated, though it shouldn’t be and could use some direction as to how the court handles equitable distribution. Here’s some background:

  • I make in excess of $65K yearly.
  • He makes approximately $40K yearly.
  • We have two daughters and are splitting custody 50-50, with no support claimed by either parent.
  • We have a house with an FHA loan. The mortgage is in his name, the deed is in both names. We purchased this house through at $20K gift from my mother, but the $20K was split into two “gifts” (one in my name, one in his) of $10K each to avoid paying tax.
  • He moved out approximately one year and nine months ago; I have paid the mortgage since that time, and have claimed all mortgage deductions on my taxes, with his knowledge that I was doing so.
  • We sat down and agreed in principle on a number of items to be addressed in the divorce (custody, who claims which child on their taxes, repayment of back taxes); other items, such as repayment of personal loans from his father to us as a married couple were still up in the air. We also agreed that I would try to refinance the property in my name in order to get his name off the mortgage, and that he would be paid approximately 5% of the equity of the house based on value at the time of separation.
  • I am now engaged and living with my fiance; we both have joint custody of our respective children. I am the sole supporter for our household (he’s Mr. Mom).
  • At one point, we had an incident that I guess would be considered domestic violence. I eventually filed a report with the local Sheriff’s Department but did not press charges. As I understand it, a deputy did visit him to ask for his side of the story, but as no charges were ever filed, that is the extent of the investigation that was completed.

Here is where it gets hairy. I doubt that I can refinance the house in my name; I have credit issues and of course, there’s the massive credit crunch going on for those of us with sub-prime credit. So then here are questions:

  • If I cannot refinance the house into my name, can he force me to sell?
  • If we do sell, how does North Carolina’s equitable distribution statute look at the equity in the home, and where does the $20K my mother gifted to us come in?
  • If he decides to take possession of the house, can I force him to pay my equity in the property before he can take possession from me?
  • If my name is on the deed but not on the mortgage, does this mean I am on the mortgage somewhere (i.e. - my name is listed as on the deed and mortgage but not the part of the mortgage that encompasses the promissary note)?
  • Does my engagement and role as sole provider for my fiance and children play any role in the court’s decision about equitable distribution?
  • If we cannot amicably agree on conditions for the divorce, what role does the report I filed with the sheriff play?

I am so sorry for all the questions but this has gotten snarled way worse than I ever thought it would. At one point, we had it worked out but suddenly, it’s gotten way more complicated. We’re doing out best to remain amicable but I’ve got a sneaky feeling it’s heading downhill.

If you cannot refinance the loan into your separate name your spouse could initiate an action for equitable distribution and seek an order from the court requiring that the home be sold in the event you cannot refinance in a certain amount of time. In order to truly separate your finances he will need to be off the loan.
In NC an equitable distribution is presumed to be equal, and the equity in the home is normally split. With respect to the gifts of 10 k to each of you, it will not make a difference since you were equally gifted.
If your spouse has left the home and has been residing elsewhere he cannot even reenter the home absent your permission. You can use your exclusive right to possession of the home as leverage to get him to buy you out before you relinquish the home to him. Since your name is not on the mortgage he will not have to refinance the loan, you will simply need to sign a new deed which transfers your ownership interest to him. You should not sign any deed until he has paid you your share of the equity.
Your new relationship will not have any affect on equitable distribution, nor will the report filed with the sheriff’s office.

Erin, thank you for your kind and thorough responses; I appreciate it. I hope you don’t mind that I impose with two more quick questions:

  1. I do understand NC is an equitable distributions state, but if I’ve paid all of the payments, taxes, and PMI since the time he vacated the property, does any equity gained during that period (April 2007 - present) belong solely to me in the eyes of the court, or is that equity still considered to be shared? He has not contributed anything towards payment of any costs or upkeep to the residence since vacating.

  2. The reason I asked about my new fiance and the sheriff’s report that was filed is that I understand under equitable distribution, the court will take into account a number of other factors, not just the financial ones. Therefore, I think I was wondering if the court would take into account my being the sole provider for the new family structure I’m in, and past behavior of the ex. I don’t necessarily want to drag my ex’s name through the mud (our daughters don’t need to see that) but I wondered if past behavior carried any kind of significance. If it doesn’t, I’m perfectly fine with that, but if it does, I was wondering what.

Again, my thanks for your fast reply and the useful info - it’s much appreciated.

Based on the contributions you have made since the date of separation you are entitled to ask for ? of the principal reduction on the mortgage.
As for the sheriff’s report, though the equitable distribution statute does list” any other factor” to be considered for equitable distribution, the general consensus is that only economic fault is considered.

Thanks again; I think that answers my questions. I appreciate the info.

You are welcome. I wish you all the best.