So You’re Considering Becoming a Lender to an Ex…
There isn’t always a simple way to divide a piece of marital property in a New Jersey divorce. For instance, the asset may be a house that one spouse may want to continue living in for sentimental reasons, or which would be difficult to sell for full value in the current housing market. The asset could also be a stock option package from a spouse’s employer that will gain in value, but which would not be worth selling at the time of the divorce. While liquidation isn’t a good solution in these circumstances, there might not be a spouse who can afford to buy out their ex’s share of ownership in that asset, either.
Addressing these challenges may require creativity and flexibility from both parties. One commonly-used option is that the spouse who wants to remain the owner of an asset pays the other spouse back over time. Installment agreements for marital assets may work, but they can often open up a world of opportunity for additional conflict—especially if your relationship with your ex already involves conflict. Consider the questions below before agreeing to accept a portion of your divorce settlement in installments, and make time to speak with a knowledgeable New Jersey divorce lawyer before entering such an agreement.
Can your ex afford it?
If your spouse has long had trouble with managing their money, or has had difficulty finding work after the divorce, don’t agree to become their lender.
Is there some other source of these funds for your ex?
You already know that your relationship with your ex is challenged. Becoming their creditor certainly won’t make matters simpler. If there’s anyone else, such as a parent or friend, who could lend them the money to buy out your share, suggest they turn to that person first before turning to you.
Will you experience financial hardship if your spouse fails to uphold the agreement?
Don’t run the risk of being in dire financial straits if your spouse stops making regular payments, simply to be helpful to your ex. If you need the funds from the asset immediately, or would need installment payments you can truly count on, don’t rely on your ex to make those payments regularly.
Are you ready to enforce the agreement in court?
It’s critical that you get an installment agreement in writing, and that the agreement has been drafted by a trustworthy New Jersey divorce attorney. Having this agreement provides you with the right to enforce it in court, should your spouse fail to keep up with their obligations under the agreement. Before you sign the agreement, consider whether you have the stomach to engage in additional litigation with your ex, or whether you’d rather limit the opportunities for conflict in that relationship, especially if you share children.
For seasoned, dedicated legal help with a New Jersey divorce or property settlement agreement, contact the Englewood offices of the family law attorneys at Herbert & Weiss for a free consultation at t 201-440-6300.