A divorce almost always results in a change in housing for one or both spouses. As if qualifying for a new mortgage isn’t hard enough, unfortunately, getting a mortgage after a divorce can be further complicated by several factors related to the dissolution. During a divorce proceeding, family lawyers frequently answer the question:

Mortgage lenders look at your overall debt-to-income ratio to see what you quality for. Thus, it is important to keep in mind that the following liabilities will be considered as part of your ability to qualify for a mortgage:

• Child and Spousal Support Obligations:
  Lenders will look for any undisclosed financial obligations such as the payment of child support or spousal support pursuant to the divorce decree. These financial obligations will, unfortunately, reduce your ability to qualify for a mortgage because they are looked at as debts, which reduce your income.
• Credit card debt, student loans, and automobile loans: These liabilities will also be considered as part of your ability to qualify for a mortgage unless you are able to prove that your ex-spouse is responsible for the credit obligation by showing twelve months of canceled checks or bank statements.

Although getting a mortgage after divorce can be complicated by the above factors, with some extra planning, discipline and awareness, it surely is not impossible. Here are some tips to help make it easier to get a mortgage after divorce:

• Disclose receipt of child support and/or spousal support: The income received as child support and/or spousal support pursuant to your divorce decree can be used to help you qualify for a mortgage.
• Carefully review your credit report: Make sure the accounts on your credit report belong to you only, not jointly with your ex-spouse. This can be quite a process and time some time to sort through but it is worth it because, for instance, if your ex-spouse pays a debt (pursuant to the divorce decree) late that is on your credit report, it will negatively affect your credit score and make it harder to qualify for a mortgage.
• Provide evidence that ex-spouse is responsible for current mortgage: You can improve your ability to qualify for a new mortgage if you own a house and are currently on a mortgage with your ex-spouse but the divorce decree awards the home to your ex-spouse and he/she is willing to provide evidence that they make the mortgage payments on the home.

Continue reading

Former NFL player and Super Bowl champ, Jeremy Shockey, and Daniela Cortazar enjoyed a brief eight months of nuptial bliss before Shockey filed for divorce in January 2013. TMZ now reports that Shockey “is playing dumb with his finances according to his soon-to-be ex-wife.” Cortazar claims that Shockey’s net worth is over $15 million but apparently Shockey is pretending to know nothing about his finances in his legal documents. Shockey is even refusing to provide information regarding his net worth. Cortazar is asking a judge to punish Shockey with fines or jail time. More importantly though, to get a fair share in the divorce settlement, Cortazar should take prudent measures to make sure that Shockey doesn’t have any hidden assets tucked away.

Hidden assets are those assets which are not readily visible typically because signs of ownership have been concealed or disguised by the other spouse. Hidden assets typically include liquid assets such as bank accounts, mutual funds, stock and bonds. These types of liquid assets can easily be transferred into another person or entity’s name. Sometimes, these assets are even transferred into accounts in banks offshore which prohibit being touched under the laws of the particular country.

Learn more about divorce and property divisionHidden assets are particularly important in divorce cases because when a court does not know about a particular asset, it cannot properly divide the asset or award it to one party or the other. Hiding assets is clearly illegal because both spouses lawfully have a claim to all marital property during a divorce proceeding. Therefore, being attentive to marital finances can help ensure that your divorce settlement is fair to you.

The first step in hunting down hidden assets during a divorce proceeding requires a diligent tracking and study of all financial records. Looking at old financial statements may help to identify suspicious transactions. For instance, an asset may initially be present in financial documents and then suddenly it has disappeared near the time of divorce or during divorce proceedings.

Other tips on finding hidden assets include the following:

• Get a credit report on your spouse. Credit reports may contain information regarding financial accounts or credit that are unknown to you.
• Look for payment of excess income tax and then a subsequent filing for the tax refund after the divorce.
• Have items such as artwork, hobby equipment, antiques, original paintings, etc. appraised.
• Be diligent about locating any cash kept as traveler’s checks. You can do this by tracing bank account deposits and withdrawals.
• Look for any inconsistencies which may indicate delayed disbursements of bonuses or stock options.
• Be aware of any income that isn’t reflected on either financial statements or tax returns.

Continue reading

In San Diego Family Courts, Judges take the issue of breach of spousal fiduciary duty very seriously. Harsh punishments are available in family court for nondisclosure of assets, failure to provide truthful information regarding income and assets and other misconduct. In April 2013, the California Court of Appeal ruled in In re Marriage of Simmons, a case of first impression. In this case, Mr. Simmons failed to disclose a separate property savings account with a value of $245,850.24. As a result of Mr. Simmons’s breach of fiduciary duty, the trial court awarded Ms. Simmons the account in full. However, the appellate court reversed that award.

California Family Code § 721 imposes “a duty of the highest good faith and fair dealing” on spouses when dealing in transactions with each other. Family Code § 1100 clarifies that duty by stating that it “includes the obligation to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest…” During a divorce case, both spouses are obligated to disclose all assets regardless of whether those assets are community property or separate property. The court may impose various sanctions for failure to disclose an asset. If a spouse discovers an undisclosed asset he or she may request 100% of the asset or an amount equal to 100% of the asset as a remedy.

Although the Family Code is clear regarding the availability of the “value of the asset remedy” if the asset is community property, Mr. Simmons disputed the availability of that remedy with regard to separate property assets. The appellate court agreed with Mr. Simmons and, for the first time, ruled that the “value of the asset remedy” is not available if a spouse has only failed to disclose separate property assets. However, despite the appellate court’s inclination to rule in favor of Mr. Simmons, it was still aggravated by his pattern of misconduct. Therefore, the appellate court remanded the case back to the trial court level directing the trial court to consider any additional sanctions it would like to impose against Mr. Simmons. Various other family codes, such as Family Code § 271, are available to the trial court as authority upon which to base an additional sanctions awards.

Under Family Code § 271, the court may impose monetary sanctions against a party for obstreperous conduct which impedes the policy of settlement in a divorce case. The court is not limited to an amount of sanctions and may impose them in an amount sufficient to deter future misconduct. Under this provision, the Simmons trial court may decide to order $245,850.24 in sanctions against Mr. Simmons for failure to disclose his separate property asset.

Breach of fiduciary duty is a complex divorce issue that requires representation by a competent attorney. Don’t settle for less when determining your rights.

Continue reading

Recently, Patricia Cohen’s lawsuit against her former husband, billionaire Steve Cohen, was given the green light by a New York court. Ms. Cohen and her divorce attorney filed the lawsuit accusing Mr. Cohen of hiding assets during their 1990 divorce. In 2011, Ms. Cohen’s lawsuit had been dismissed because the court determined that her allegations of fraud were stale and too unsubstantiated. However, recently the U.S. Circuit Court of Appeals determined that Ms. Cohen’s claims were not too old considering the fact that she only uncovered the evidence sited in support of them in 2008.

The basis of Ms. Cohen’s lawsuit, as she alleges, is that Mr. Cohen failed to disclose a $9 million investment during their settlement process. Mr. Cohen invested $9 million in co-op apartments in 1986 and claimed during the divorce proceedings that he lost the entire investment. If true, Mr. Cohen’s net worth was only approximately $8 million at the time of divorce. Therefore, a $9 million dispute is significant considering the parties financial circumstances at the time. Although Mr. Cohen claimed the investment was completely lost, Ms. Cohen suspected he was lying. However, it was not until 2008 that Ms. Cohen found court documents suggesting her suspicions were correct. It was this discovery that prompted her to contact her attorney and file the lawsuit against her former husband.

Del Mar divorce lawyers have a variety of tools they can use to discover undisclosed assets such as Demands for Inspection, Special Interrogatories, Form Interrogatories, or even through the subpoena process. However, despite everyone’s best efforts, assets can still be hidden by clever spouses. If a family law attorney does not know that an asset exists, he or she will not know which questions to ask, which documents to ask for, or which entities to send subpoenas to. If the attorney suspects a particular asset exists, he or she may still encounter the same roadblocks without information regarding where the asset may be located.

In many cases, San Diego family law attorneys are able to discover all of the parties’ assets. However, this does not change the fiduciary duties both spouses owe to each other. Specifically, both spouses have a legal obligation to disclose all assets, liabilities, income and expenses. Divorce attorneys in Del Mar are well aware of this, and if the court determines one spouse has breached this duty while the other has not, it must award sanctions in favor of the complying party. Monetary sanctions will be awarded in an amount sufficient to deter repetition of the poor conduct. The exact amount will be dependent on the net worth and income of the breaching spouse. If a spouse discovers an undisclosed asset after settlement or after trial, he or she may still seek remedies from the court.

Continue reading