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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 10-13-2011, 07:51 PM
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Default dividing property-related bills like taxes and credit line interest

What is the cut-off date that I would be responsible to for paying property taxes and interest on our joint credit line?

A brief background...I wanted to buy the matrimonial home from my ex but after much expensive fighting over exclusive possession and two years of miserable living in another part of the same house after the separation date, I finally gave up the battle and left with my older children and rented another home. Nothing was settled. The kids don't really talk to their dad (their choice for their own reasons) and I have supported them alone in the last couple of years, they just moved away to go to school last month.

Even though I have nearly $10,000 in legal bills (and my ex has twice that), I still am no closer to a divorce or a settlement and I am in my 13th month of renting another house in another town. My ex and I finally agreed that we can't do the lawyers anymore (all they want to do is go to court and my lawyer has even adjourned 2 set court dates on my behalf without even informing me that I had court dates - one time was because he took a holiday).

So finally I am awaiting a $$$ number from my ex today for his buyout offer. We had agreed on a value for the house and contents but everytime he gets close to giving me a written offer he starts subtracting nickles and dimes, or about $30,000 in this case. We do owe some back-taxes since before the separation date of Sept 2008. I realize that half of this debt is mine and am prepared to pay that but he expects me to pay half the taxes right up to today's date. I feel that is his equity in the home and not mine but is it? I haven't been living there and have entirely new expenses of my own now.

Also we had a credit line and a mortgage up to the time of separation date. Around that time my ex tried thought he was being smart and emptied out the credit line to it's max (about an additional $40,000) he said so I couldn't get my "greedy hands" on it so he put it in a "special" account. What he actually did was eventually pay the mortgage off with the credit line but that was his doing and he tried to keep that from me and get credit for "paying all the expenses since separation" when really he only borrowed from one pocket to put it in another. The lawyers were aware of this and it was discussed (but not settled) that I shouldn't be responsible for the credit line after the separation date anyhow. However, my ex is charging me half of the interest on the credit line for the past 5 years (payments have come out of his account monthly up to now as he will be taking over the credit line when I sign over the house). I don't feel this is fair as he withdrew that large lump sum 2 years ago to "protect it from my greedy hands" and we have been charged interest on it ever since.

To sum up? What's the cut-off date that I am liable for property-related bills? Can I counter-offer by knocking any $$$ off that occured after the separation date? Or would it be the date that I actually physically moved out of the house? Or am I stuck with the whole thing?

I am still paying the almost $300 a month insurance on the house because he won't take over the payment until we settle because he feels that he is already paying the costs of the house since I moved out (credit line/mortgage, hydro, phone and satellite) - of course he is - I don't live there and pay over $1000 a month on my own rental (and in fact am wondering if I can charge this back to him but that's another topic?). arrggghh. I have had to buy new furniture as I left everything behind because things turned a lot crazy when I tried to take stuff...this has put me into debt almost $10,000 for beds, washer/dryer, etc. while he sits in a fully furnished beautiful home on the water and hasn't paid a cent to me or his children in the 3.5 years we've been separating. BTW our kids are old enough not to require child support and spousal support is also unnecessary. This should just be a clean case of property division.

One other question...I don't want to be married to him anymore but the simple "divorce" part, legally separating us, seems an impossible feat since my lawyer never even made a dent in that in 3 years. Is there a simple way for me to at least do that part by myself without spending a lot more money? I thought thats what I was buying in the first place with my legal bills but apparently not.

Sorry to be long-winded. Any advice is appreciated.
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Old 10-13-2011, 09:43 PM
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You have a lot of items to consider in your post but I can answer a couple from what I do know. The line of credit - regardless of who, when or why is a joint responsability to both of you in the banks eyes. The bank will have the right to go after both of you for the entire amount (but will only collect what is due to them) What is at stake is your credit rating until this is cleared 100% You did say your older children are off to school - the obligation to both of you to help with their school expenses remain. The children are responsable for 1/3, getting any grants or OSAP they are elligable for and then the remainder is split between the two of you based on income ratios. There would also be some section 7 expenses even for the older children as well (not 1000% sure on the section 7 as all the expenses could be included in the first tuition/books/lodging/living expenses calculations.

Next is the house property taxes - the city does not mind not having it paid but will get theirs off the top when the house is sold/transfered. Our city told me there is an automatic lean put on any taxed property if taxes are owed. You are still left with pounding out an agreement to get back your portion of the taxes with your ex but as a common asset my lawyer indicated that we would be both legally equally responsable to maintain our common assets, taxes, mortgages, insurance until the house was sold. The fact that you left before the house was "settled" was not in your best interest money wise. You moved out because it was the right thing for you to do at the time based on your own decision. (that's all I know from my lawyer sit down meetings.

Closing, you made the comment of "just the simple Divorce part" - you must have your property settled which you do not (you do have the right to walk away I guess but it sounds like you have a fair bit of equity) and you do have older children still in school so there is still a CS component so I beleive it is fair to say simple is not in the cards unless you both stop, settle fair and get it done.
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Old 10-13-2011, 09:52 PM
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You can argue that he owes you 'occupational rent' for the period after you moved out. That would be calculated as 1/2 of the housing-related expenses (mtg/tax/ins/utils/maint). But ... this is basically equivalent to him taking over your half of all housing-related expenses ... INCLUDING the interest on the portion of LOC that was used to pay down mtg, property tax and insurance. i.e. there is NO justification for you to be paying these. This seems to be the big equalizer in your case. Didn't the lawyers bring this up already?

This occupational rent corresponds to your idea that he should pay you for your rent i.e. YES, he should be paying your rent, but it is called occupational rent, and is calculated differently.

Re the Line of Credit: It seems that he just swapped one kind of joint debt for another i.e. instead of paying mortgage interest on the amount, you are now paying LOC interest on the amount. If the LOC interest is much higher, it sucks, but probably not worth arguing about. The interest for both should be treated the same way i.e. as above for occupational rent. The mortgage balance and the LOC balance both reduce the total amount to be split.

You should include the 1/2 the 'garage sale' value of furnishings in the house in the total amount to split. Do your best to make a catalog of these items and price them. You might be able to recoup 2-3K at most. Unfortunately, since you bought most your replacement furniture new, you lose out on this one - nothing you can do about that.

BUT ... He's sitting in the strong negotiating position now, knowing you are financially stretched, and is putting the screws to you to accept a crummy offer. From what you say, I doubt that you will get any movement from him unless you find a better lawyer and take it to court.

You could weaken his position by stopping paying the LOC and mortgage ... but it does put your own credit rating at risk. Stopping the insurance payments is too big a risk, I think.

Last edited by dinkyface; 10-13-2011 at 10:20 PM.
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Old 10-13-2011, 10:19 PM
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The cut-off date? Well, the reality is that your credit rating will be hurt if you do not make required/minimum payments by the due date.
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Old 10-13-2011, 11:32 PM
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Thanks for all the advice. I should clear up some points from my original question...

Regarding my 'adult' children, the education expense has been agreed on by my ex and we have agreed to the 1/3 each plus 1/3 for the child - she got OSAP, part grant and a student LOC. So far there is no argument and we are each paying our share so that part is settled and in the 'imaginary' agreement that we have so far.

Regarding the payment of the LOC and the mortgage, my ex is doing this so credit rating isn't an issue right now and I don't believe he would stop paying it because he would also be worried about that. He knows he is responsible for the LOC and has already arranged with the bank to remove me from it as soon as I accept his offer.

I did get a lot of used furniture and some given to me by my (and his) family members, I just bought new beds for the three of us for sanitary reasons (couldn't find 3 decent used ones) and took a long-term, no interest plan for some other things but that will be coming due soon. For the first 8 months I found a furnished cottage to rent which was great (but cold and expensive to heat) but then I had to move out as it was a summer home for the owners and I could only find unfurnished so had no choice.

And I realize that leaving the matrimonial home is not recommended. I tried very hard to stay there for two years living separately in the same house, it was impossible and affecting my health and the health of my kids and my family and friends were practically dragging us out of there, my ex is the definition of a full-blown narcissist, it got to the point where police were called and still he wouldn't leave (because my son was 19, he was an adult who would have had to press charges against his own father). My ex has always lived in denial and thought I'd "get over it" - the idea of a divorce, in fact I just found out that he was thinking last week that we might still get back together so I feel he has been making it very difficult for me to move on and stalling every move with sudden illness or depression or blame. I just want to end this for all of our sake.

And I should also say that the house is solely in my name. This is part of the reason I believe my lawyer was incompetent that after 2 years and infidelity and abuse he couldn't get me an exclussive possession order. At one point my lawyer arranged a 4-way meeting at my request and at the beginning of the meeting, that was costing us $600 per hour and lasted all day, he took me aside to ask me what it is I wanted in the divorce...he hadn't read any of my material and wanted me to sum it up for him AT the meeting while my ex and his lawyer waited for us in another room.

If I had the money for a good lawyer things would be very different for me now but I don't care anymore. I just need to move on with my life.

Really my only issue as far as an offer goes is how much he can take off of the final amount in back-taxes and interest. I had the understanding that everything after the date of separation is his. I am going to counter-offer the amount of the house plus contents and boat, etc. minus the property taxes and LOC interest at date of separation divided by two - assets - liabilities divided by two. Does this seem reasonable? Especially since he has not helped me with my living expenses or the kids (except for educatoin costs). He won't agree with me that this is fair so I just want to make sure it's legal and right.

This doesn't surprise me though since he has spent the last two years trying to bill me for all the things he paid for in the last 10 years - he has an itemized list and wanted me to pay him back for 10 years of things that he paid for around the house. And his lawyer let him do it until the bill got so high that my ex refused to pay the lawyer and the lawyer quit and now the ex is suing the lawyer too.

He's grasping at so many straws that the next thing he will do is charge me for looking after the family dog for the last year (we got the cat, he got the dog).

I tried to get a better lawyer but around here they all want a $2000 retainer and I am already deep in debt and cannot come up with that yet I make too much money for legal aid. I know I'm being screwed but would like to limit the amount of screwing from this point on, if at all possible.
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Old 10-14-2011, 12:41 AM
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read your post and it struck me:
You need to set your stbx "on the side" and be very clear to him, use what ever reason that will really, really let him understand that it is over, you are not getting back together adn his "method of dragging it on" must stop. Idea I throw out there - Print out the copy of the ontario divorce act and the Family law act......highlight/tab the section(s) regarding fair property settlement and you will agree to settle within the guidelines set forth in those acts????

Since he is more than really grabbing at straws (his insane ideas to what is included property..... and it was a real shame that his lawyer led him on, it not only cost him but you as well. It must be a lawyer grab tactic to increase fees?? Reading the two basic acts, in my opinion, should be maditory for everyone. It really gives people, at least it did for me, a solid base of understanding what the "rules" are, what is included and what is not.

Once I was aware of the basic rules - I only presented to my lawyer those items which really were appropriate adn had a chance of sucess. I made it clear to the lawyer I am not interested, nor can I afford to "make precedence or challenge existing laws - I just want what is clearly set out in act".
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Old 10-14-2011, 01:12 AM
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You have an excellent point about reading the family law act...in fact, that's what brought us to this point. My ex actually printed it and read every word of it after going through his third lawyer. I believe he gets the 50/50 part finally, he's just trying to jack up the liability $$...and the act also helped him accept the appraisal on the house - earlier he refused to even come close to the true value of the house, even from his own appraiser so much so he refused to pay her bill.

Because he's fresh from reading these documents we are now negotiating by ourselves and will give the final doc's to the lawyer for disbursement of funds. IF we can agree to a final amount that is...

And it was in reading the act that he got the idea that he could use his failed business bankrupcy from 20 years ago as a liability against assets. Not sure what part of the act he read that in but he swears by it...right now he's just using it as a wild card against me, threatening to play it. I'm not too worried.

Thanks for taking time to think about my situation. All this advice has really helped.
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