QUESTION

Forcing my ex-husband to refinance a mortgage that I am still liable for, even though I assigned the LLC to him in the decree.

Asked on Aug 16th, 2011 on Real Estate - Idaho
More details to this question:
Scum bag and I formed an LLC, and bought many rental properties. I relinquished my rights to the LLC, yet NOW, since 2007 I find on my credit report that I am still co-signer on the mortgage, and he has never refinanced - even though this oversight was not addressed in the divorce decree. He states that he will not refinance, and I now will now be forced to petition the court in the state of Washington to modify the decree. Is there no law protecting me and putting responsibility on him to move forward with refinancing? And am I entitled to the 1/2 the net rental proceeds since 2007? Am I entitled to attorney''s fees and costs for pursuing this action? The divorce was handled in Washington; property in question is in Montana, and I now live back in Idaho. Thank you in advance for your time and consideration.
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1 ANSWER

Real Estate Law Attorney serving Reno, NV at Hawley Troxell Ennis & Hawley LLP
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A divorce decree is simply an agreement between you and your ex-spouse and has absolutely no effect on third parties, like lenders, and does not modify any third party agreements, like promissory notes and mortgages.  As you apparently already know, the only way to get off liability on the notes/mortgages is to get them refinanced solely in your ex-spouses name.  You do not say whether the decree required him to refinance.  If it did not, then he is not in breach of any obligation and I also doubt that this was an oversight in the original decree.  It is probably impossible in today's market for him to refinance so I doubt that a judge would modify the decree to require it.  He probably has an obligation to you in the decree to take responsibility for the LLC's debts and until he lets one of them default, he's fulfilled his obligations to you.  Unfortunately, as you already know, your credit report will continue to show you as a debtor and if he defaults on the loans, your credit will take a hit.  You'll have a legal action against him at that point, but it won't cure the credit report problem.  Finally, no, you don't have a right to 1/2 the rents the LLC has collected because you gave him your interest in the LLC and apparently that was not coupled with an obligation for him to refinance the debts.  After all, you have not been making 1/2 the mortgage payments since the divorce either, right?  There may be more specifics in your decree that you have not related to us in you question that may lead to a different conclusion.  Best of luck.
Answered on Dec 08th, 2011 at 1:42 PM

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