Unfortunately for many, the divorce process can get ugly as spouses resort to playing games to get revenge on a soon-to-be former spouse. We have all heard the horror stories of a mega-wealthy CEO disguising income or hiding property to protect certain assets from a divorce settlement. However, deception is not unique to the wealthy. If you are not careful, you could fall victim to a lying spouse’s scheme.
While many couples enter into prenuptial agreements to protect their assets in case of divorce, some individuals simply resort to lying and scheming. Asset hiding can occur before or during marriage. Typically, a spouse who hopes to protect assets in divorce overstates debts and undervalues assets. This leaves the other spouse with a smaller share of property upon divorce.
There are signs that may indicate that a spouse is hiding assets. If your spouse maintains complete control over your finances or bank accounts, you may have cause for concern. Spouses who are secretive about financial decisions or the couple’s financial status may be hiding something. If your spouse erases financial files from your computer, there could be a problem. Spouses who own small businesses tend to have more opportunities to hide revenue or sales proceeds. If your spouse’s business finances seem to change drastically over a short period of time, your spouse may be altering the books to hide assets or income.
Another strategy that a spouse may use to hide assets is to report a drastic drop in the value of investments. A spouse who plans to hide assets may also open a separate bank account unnecessarily. While it may be difficult to catch a lying spouse, bank statements, checks and tax returns can be used to track an individual’s financial activities. Asset-tracing services are also available to individuals who suspect their spouse is hiding assets during a divorce.
If you believe that your spouse is hiding assets, an experienced San Antonio divorce attorney can protect your interests.
Divorce is a scary and complicated time, and maintaining a roof over your head is likely one of your primary concerns. While obtaining a mortgage after a divorce may be a little more difficult than you may think (especially in today’s challenging economic climate), it’s not impossible.
Banks have strict underwriting requirements that must be complied with before they lend money. The lender will look at the source of your money for a down payment and your debt ratios. The lender will also look at the following to determine if you are credit-worthy:
- Whether you have other financial obligations, such as child support or alimony. This will probably reduce your borrowing ability.
- Whether you receive other financial support, such as child support or alimony. This financial support can be used to qualify for the mortgage, so long as there is a six-month history and the income is set to continue for the next three years pursuant to your settlement agreement or divorce decree.
- Whether you are on the mortgage of the marital property with your ex-spouse and you make payments on that mortgage from a joint bank account. If so, your borrowing ability may be reduced even if the divorce decree awarded your ex-spouse that property. However, if you can show that your ex-spouse has solely made the mortgage payments on that home over the past 12 months, the new lender may not take this mortgage payment on your former home into account. Another solution is to have your ex-spouse refinance you off of the mortgage. You could then show those refinancing papers to your new potential lender to prove that you have no further obligation on your former marital property.
- Whether you have joint credit card debt, auto loans or student loans with your former spouse. If so, those obligations will negatively affect your ability to qualify for a mortgage unless you can prove that your ex-spouse is solely responsible for the obligation.
The good news is that most borrowers today will be able to obtain a mortgage even after a divorce, with a little help. Your San Antonio divorce attorney can help you avoid most of these negative effects by drafting a careful and clearly worded marital settlement agreement regarding which debt belongs to which spouse to help you start anew.