Foreclosure Laws: Divorce, Debt & Foreclosure – What Every Dependent Spouse Needs to Know


I was watching the Dr. Phil show recently entitled the Biggest Financial Mistakes people make.

The show featured the real housewives of Orange County. One of the housewives on the show was struggling and obviously needed to downsize. She lived in an 8,000+ square foot home and was not making the $1,000,000 plus (yes, that’s seven figures) she was accustomed to making any more.


Anyway, the financial expert gave some insightful tips at the end of the show that every dependent spouse (mostly women) need to know. Following are three of them that stood out that most people probably don’t even know about when it comes to divorce, foreclosure and debt:

Foreclosure Law: 3 Pieces of Critical Info for Dependent Spouses

Spousal/Child Support: Spousal and child support are calculated based on earnings for the last few years (somewhere in the neighborhood of 3-5, depending on your jurisdiction).

New Year Divorce Surprise: When an already unhappy marriage is compounded by money worries, ie, thinks like, a significant dip in earnings, the threat of foreclosure and mounting consumer debt, it can be the tipping point.

Hence, many men file for divorce around the first of the year. It’s a psychological thing for both men and women probably in that if you’ve been unhappy in a marriage for years, you want to start the New Year off right.

The part that can hurt dependent spouses though is that if a bread-winning partner files and has to pay spousal/child support, they “lock in” the lower rate they’ll have to pay. Remember, spousal and child support are calculated by the courts based on earnings for the last few years.

This means that if a spouse averaged $500,000 a year in good times, he would be required to pay “x”. But if he filed for divorce and his earnings only averaged $275,000 over the last few years, then he’d only be required to pay based on this (NOT $500,000).

This brings us to the last point the financial advisor on the Dr. Phil show made, and that is . . .

Don’t Sign Anything: It’s important for women (ie, the dependent spouse) NOT to sign any agreements like support and alimony documents that can’t be modified when the bread-winning spouse’s income starts to improve.

Case in point: One of the women featured on this episode of the Dr. Phil’s had a husband who was a builder. Now, everyone knows real estate is in the toilet now. Hence, her husband’s income had tanked.

But, when things turn around – and they always do because every economy is cyclical – her husband will ostensibly start to earn more. She could then seek a support modification. BUT, if she signs away those rights, she probably won’t be able to do so.

How a Divorce Can Bring on Foreclosure

Simple: most dependent spouses are women. They are usually given the family home in a divorce settlement, especially if they have children.

What if the support you receive doesn’t cover your mortgage payment? You could face foreclosure, in addition to having to deal with a divorce.

Foreclosure Laws: Home Foreclosure, Divorce & Debt Advice

Bottom line: If you’re a dependent spouse (husband or wife), consult an attorney before you sign anything. It’s already a stressful time. You don’t want to be dealt a surprise foreclosure on top of everything else.

P.S.: You Can Save Hundreds of Dollars — Or More — Per Month on Your Mortgage:  There are homeowners just like you who have saved thousands of dollars in loan modification fees. And, they’ve lowered their mortgage payments by hundreds — and in some cases over a thousand dollars — a month. Get the details in this home loan modification kit.

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Facing Divorce and Foreclosure? Get some insight into foreclosure laws and what to expect from a divorce attorney in the video below.

Copyright © 2009 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

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