What will happen after I'm sued and owe the money?
May 10, 2011 7:18 AM   Subscribe

What, exactly will happen to me? I got divorced a while ago, and lately my income just can't cover part of my divorce decree. She's mad and threatening to sue.

I got divorced a while ago, part of the decree is $1000/month payment to her for equity in the house. Yes, this is based on a far-too-generous valuation of the house, too late to change. No, I don't want to sell the house. I haven't been able to pay her the $1000 per month for a few months now. I'm about $5000 behind.

She's tired of it and is planning to sue for money owed if I don't come up with a reasonable proposal by Friday this week. I actually empathize with her position, I'm just unable to do much to cure it at the moment. Money is very tight.

I do not live "high on the hog" at all. At best, I go out for sushi once every couple weeks, paid for by my girlfriend. The ex, of course, thinks I am a wastrel and judges everything I buy, reported by my kids. Ouch. That's wrong, but whatever.

My question is "what will be the result of her suit?" A secondary question is "What could I do to prevent bad stuff at this point?" What will the Oregon court be able to do to me if I fail to satisfy her via a settlement (which I'm working on, by begging my parents for money, the only option I've come up with so far)?

A few details:
- I do pay child support, this is separate. I pay the child support on time.

- The house - maybe - is worth enough to pay her off right now if I spent $10-20K on repairs and sold it. With luck. I badly do not want to do this, especially as I would not be able to buy another for years and years until I repair my credit. This is even more ridiculous when I note that I don't have the money to make these repairs in any case.

- I owe her about $20K on the divorce decree for the house, payable over the next couple years, interest free. Yes, that is generous on her part, I understand that.

- She's still on the mortgage, which is part of the decree, and she can't ask to have me refinance until she's paid out, can't even force me to do so then, but has no rights to occupy or even enter the house. Yes, this was a very nice part of writing the divorce agreement myself.

- I have my own LLC company, well insulated from the house, and she cannot garnish my wages, as I have none. I purely take a "draw" from my company. At least I *think* she cannot garnish in this situation. Can she?

I really am not trying to screw her over, she'll be paid, she is the mother of my kids and I'm not scum, I've just hit a slow period in income. She demands that I get a FT job and pay her. I say a FT job won't cover my obligations in any case, and that it isn't in her rights to demand that. You may disagree, fine. What is the likely outcome of a suit?

Yes, you are not my lawyer. I still appreciate your thoughts, especially thoughts informed by somewhat similar situations.

No, I haven't retained a lawyer. If I did, how much should I expect to pay (which would directly take away from my ability to pay her in a timely manner)? I know I am in a bad place, I'm just trying to figure out just how bad it is.

My current "best hope" is that my parents will loan me $15K and she'll settle for a lump sum payout. I doubt they can come up with that much, but I do have my fingers crossed. It is super fun to beg your parents for money for the first time as a 43 year old man, by the way.
posted by anonymous to Law & Government (16 answers total) 7 users marked this as a favorite
Did you have a lawyer for your divorce? If so, give him or her a call and see if they can follow up on order enforcement for a low sum (which they might, for a repeat customer or if they are responsible for the crappy order).

If you did it yourself, see if you now qualify for Legal Aid for state-specific advice. You might be able to get to order modified to something more reasonable or to at least have the timing adjusted so you don't get so far behind so fast.

If she gets a lawyer for order-enforcement, you really will need an attorney to help you out. It will siphon off your ability to pay her (which you could point out to her), but it will be an investment in the long run to keep you from really getting screwed over.
posted by motsque at 7:37 AM on May 10, 2011

No one here can tell you what, exactly, will happen to you. Especially because you haven't told us where all of this is taking place, but mostly because there isn't just one thing that will happen. If this ends up in court, a lot of different sorts of things are possibilities. You need a lawyer, and you need to not post anything on the internet or communicate further with your ex about this until you have one. "Anything you say may be used against you" isn't just for criminal cases. Get a lawyer.
posted by decathecting at 7:48 AM on May 10, 2011

Yes, this is based on a far-too-generous valuation of the house, too late to change.

No, not too late to change: a divorce degree is pretty much changeable through the entire life of the document. People amend and change them all the time. This does mean getting lawyers involved if you and your ex cannot reach an agreement on your own.

You probably want to start the process of amending the divorce degree before she takes you to court -- if she takes you to court and you don't have any good reason for not addressing the problem (just saying "I can't pay" probably isn't enough), you could be found in contempt of court, which isn't good to have on your record. Judges, in general, want divorce degrees to be set up in a way which avoid having to go back to court all the time, so the court will be more interested in reaching agreement than simply punishing you. So, lawyer up, come up with a plan, and you should be in better shape than hoping for sympathy in court when your wife sues you for nonpayment.
posted by AzraelBrown at 8:00 AM on May 10, 2011 [1 favorite]

Yeah, you're going about this wrong. "What will happen when..." is not the question you should be asking. When you are in default, you do not wait to be sued. That makes things worse for you, as well as for everyone else. You need to get assistance and address this.

I'm not a lawyer, no one else here is either, and no one knows what state you're in, but you probably shouldn't put that information on the Internet, and also I would imagine a decent lawyer would see if they could file to amend with a new valuation of the house.
posted by RJ Reynolds at 8:02 AM on May 10, 2011 [1 favorite]

It sounds to me like you got a pretty good deal in the divorce settlement (unless the house valuation is really out of whack). Do you really want to jeopardize that by her bringing suit? Have you paid her any portion of the missed $1,000 payments or did you go from $1,000/month to zero/month? Perhaps if you could work something out for reduced payments for a few months, or if you just paid some portion of the monthly payment that might forestall suit. Put yourself in her position and think about what would satisfy you enough to slow down a lawsuit.
posted by caddis at 8:04 AM on May 10, 2011

OP says he is in Oregon.

Nonetheless, there really is no way for anyone here to make a good guess as to what will happen to you if your wife seeks an enforcement of your divorce settlement. If she does, you will need your own lawyer. Many attorneys have sliding scale fee structures; most have payment plans; you may qualify for a legal aid service. First call the attorney who handled the divorce for you. He or she should answer basic questions about enforcement without charging you. See if you can get a consultation appointment with your original attorney--every firm I ever worked for did that free of charge, even if it was a follow-up to litigation that was considered closed. It's embarrassing for some people, but when you call, ask if there is a charge for coming in to talk about the situation and to talk about whether the attorney can/will represent you. When you go in, bring all the relevant paperwork (you might also write out your proposed settlement).

Then, call a couple local legal aid hotlines--the person on the phone may be able to tell you what to expect and will certainly be able to refer you to an appropriate attorney or appropriate legal aid service. Even if your ex-wife agrees to a a lump sum pay-out for less than what is in the divorce decree and you are able to settle this, you will want someone representing your interests to ensure that all necessary releases are properly filed.

You may be reassured to know that divorce settlements with long-term economic relationships--or other on-going duties or responsibilities--between the divorced parties often get altered after the fact. It is stressful for you, but run-of-the-mill for the courts. Remember, you're not a bad person for this, nor are you a bad person for wanting to preserve your house, particular while your children are young.
posted by crush-onastick at 8:08 AM on May 10, 2011 [2 favorites]

When I say "First call the attorney who handled your divorce for you", I mean "call the attorney who handled your divorce for you today, before your ex sues for enforcement." Being sued sucks, fearing being sued sucks. It's horrible, but it's far far immeasurably better if you have talked to your own attorney before you are sued.
posted by crush-onastick at 8:20 AM on May 10, 2011

From a MeFite who would prefer to remain anonymous:
I have my own LLC company, well insulated from the house, and she cannot garnish my wages, as I have none. I purely take a "draw" from my company. At least I *think* she cannot garnish in this situation. Can she?

IANAL but I am a partner in an LLC. One of the other partners fell behind on his alimony and/or child support payments (I forget which) and we were contacted by the state with a notification to garnish his wages. This was in Massachusetts, not Oregon, so ymmv.
posted by jessamyn at 8:42 AM on May 10, 2011

I don't know the answers to most of your questions, but you did say that she would consider a reasonable offer. She apparently feels you aren't being honest and/or fair with her.

Legal action SUCKS. It is stressful and a huge waste of money. Do what you can to avoid that. I would make a presentation to her that says:
- I still intend to pay you as agreed.
- I am in a slow period and ask forbearance.
- I have brought $x to pay now against what is owed, and I propose we tack the remainder of the deficient $5k back onto the principle.
- To make this settlement one I can consistently pay, to give you predictability in your life, I propose [that we convert it to $750/mo over a longer period of time].
- Out of fairness to you, I propose that when I cannot pay on time, that amount convert to a loan at a fair but modest interest rate (e.g., 4%). [you might not want to offer this; I don't know. Some penalty so she doesn't feel you can just disregard her without consequence might ease the tension.]
- I know you feel I am doing this intentionally, but I am not. Take a look at the economy. Everyone is suffering now.
- This document shows the current valuation of the house. I want to remind you that our earlier settlement has protected you from this loss of value.
- There is X% unemployment now. A job is not a quick and easy option and would distract me from making payments via success at the LLC.
- As I am paying you the money that I have, I suspect a lawsuit would be a waste of money for us both and would not yield any result better than what I am offering.

Then do your best to pay that settlement every month -- take a small side job, save up in the better months, or whatever. Pay her off if you ever get a business windfall. This stress is not something you want in your life.

On the other hand, maybe negotiating a new settlement would be appropriate given the loss of vale, but think hard about how fast $250/hour adds up to $20,000, and add in stress, lost time from work, and how the hostility will affect your children.
posted by salvia at 9:02 AM on May 10, 2011 [6 favorites]

Why not refinance, given the current stellar rates, take out her equity in the house and pay her the lump sum that way?
posted by rich at 9:08 AM on May 10, 2011

If you are at a slow period of income, would it be possible to rent out part of the house for a year or so? I don't know how desirable your neighborhood is or if there is space for this, but it may help keep you afloat.
posted by amicamentis at 9:26 AM on May 10, 2011

You should talk to a good attorney, preferably experienced in family law. (If you hit me off-list, I can try to find some names for you.) You should have the lawyer review the deal and provide advice. IANYL, but in my state (CA), I have won many motions to vacate judgments. Many self-represented litigants make mistakes that can end in this result. You absolutely need someone to help assess your position. A lawyer can also tell you whether the deal you cut is as good as you think it was. If it was a good deal, you may lose more by clinging to a house you can't afford right now. In my state, judges don't have a problem ordering an asset sold, the debts paid, and equity divided; they don't usually force one party to underwrite the financially unrealistic desires of another party.

You should ask the lawyer about refinancing. In addition to paying off the ex-wife, you may also be able to consolidate higher interest debt (if any) and lower your total monthly payments. The bank might require you to make repairs to preserve the value of the asset securing the debt, but this sounds like it may be a good thing. Also, your ex may be open to receiving a lesser amount if the refinancing will result in repayment before the date anticipated in the judgment. Perhaps you can get the amount reduced to the point where the savings will pay a significant portion of the cost of the loan over time?

Lawyer's hourly rates will vary. I don't know what rates are like in Oregon; expect more in Portland than you would probably pay in, say, Corvallis. I would budget $250 for a consultation, maybe a little more, but probably less. It depends how complicated your divorce was.
posted by Hylas at 10:45 AM on May 10, 2011

You got divorced. At the time of the divorce, the house had equity of N. You owe her 1/2 of N. Even if it was inflated a bit, the value at the time of the divorce is what you owe her half of. The lack of interest compensates for a slight overvaluation of the house.

You live in the house, and presumably pay a mortgage. You're having trouble paying her. You can go to your lawyer and try to re-negotiate based on the failed real estate market. You can sell the house, etc. I recommend you try to make a deal with her, as salvia recommends. And, get a 2nd job, because you can't pay your commitments.

Most importantly, see if there's a program in your area for divorced parents on co-parenting. The kids should absolutely, positively, be well out of this and any other money and relationship issues between the 2 of you.
posted by theora55 at 11:37 AM on May 10, 2011 [1 favorite]

Call 503-620-0222 and ask for the Lawyer Referral Service. They will find a lawyer who can help you and the initial consultation is very cheap.

I am not your lawyer, but I do work at the state bar in your state.
posted by tacodave at 2:04 PM on May 10, 2011

You take a draw from your company, and you mention that she can't garnish it, so it sounds like there's money there to be taken, you just don't want her to access it. Or get a full time job so you can live up to your responsibilities. I gotta say, if I'm seeing it correctly, you're not looking great in this situation, I don't blame her for trying to get what she's owed. I would get a full time job, make sure she knows you're making every effort to pay her back and then do it. Why should she suffer because you don't feel like working while you seemingly set up companies so she can't access your money? My apologies if I'm misunderstanding the situation. But it's in your best interest to sort this out amicably, especially if you're raising kids together. Don't force her to sue you to get it back, that's not cool.
posted by Jubey at 4:30 PM on May 10, 2011 [1 favorite]

A law-suit is a huge waste of money. Both of you will end up spending thousands of dollars extra to deal with the issue in a court room.

However, if she is left with no other options, she has no choice but to sue.

Save everyone the head-ache and wasted money of a law-suit - and NEGOTIATE A SETTLEMENT. You can not act as the negotiator because you are too emotional connected to the result, and besides you could not file the legal paper work to make it binding.

So, you need a lawyer - and your lawyer needs to figure out a way to resolve this through mediation or negotiation.
posted by Flood at 3:22 PM on May 11, 2011

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