Today, many people face the unfortunate predicament of economic difficulty. For some it is the result of a layoff, others the loss of their business and for a good many others an over-extension in the real estate market with non-paying tenants now. What is also true is that economic difficulties at home breed conflict, and this conflict can often lead to at least one spouse thinking about divorce.
When divorce is being considered, real estate is owned by the married couple together, and the mortgage payments are in arrears, it is strongly recommended individuals seek the advice of a divorce attorney that also has a foundation in bankruptcy and real estate law. One that has this experience will be able to counsel the client in a way that will help the client prioritize their needs.
For example, if the husband and wife own real estate, are together behind on their mortgage, and the bank is threatening imminent foreclosure, filing divorce by either party without first dealing with the real estate may lead to the economic destruction of both spouses, and further both parties being forced to move to an apartment without either having the ability to buy a home.
The reason for this is some people mistakenly believe that once you file for divorce in Massachusetts, per Mass. General Laws Chapter 208, Section 12, the marital property is frozen and can not be disposed of. While this holds true for the spouses, nothing prevents the mortgage company from foreclosing on the real estate against which they have a security agreement. Other individuals may be so focused on divorce, that they have not even taken the time to evaluate the economic repercussions of a divorce by way of foreclosure, even to themselves.
P&P Law strongly urges individuals to consult our office prior to filing for divorce. Our experienced staff handles divorces but also has a multitude of experience with real estate, bankruptcy and loan modifications. We can counsel individuals on the advantages and disadvantages of applying for either a loan modification or bankruptcy together with their spouse to avoid a foreclosure prior to filing for divorce. Our office also understands the effects of the bankruptcy code's automatic stay (11 USC sec. 362) on divorce and its repercussions on marital property division.
The bottom line is in today's new economic era of constant foreclosures and bankruptcies, a client needs to understand how a divorce can affect and be affected by bankruptcy and foreclosure.
