Thursday, January 29, 2009

What If You Can't Sell Your House?

Divorce doesn't happen only in the best of economic times.

Last fall, the economy replaced wars and foreign affairs as the most important topic for most people during the Presidential campaign. The "housing crisis" is a major component of the economic downturn. While the stock market has been going up and down (mostly down), house values have been steadily going down. Add to that the "mortgage crisis" and we have suddenly gone from an environment of steadily rising house prices and readily available mortgages to falling house values and a very restricted mortgage market. I know this isn't news to you and you aren't interested in rehashing current problems. Actually, I'm writing to suggest some solutions.

So, what do you do if you what to get divorced, but you can't sell your house? Here are five ideas to consider.

1. Stay together. This may not be what you want to hear, but counseling is cheaper than paying for two households. While this won't be appealing to a lot of couples, others may see the logic. If it is not a dangerous situation, maybe the economy will encourage some couples to try harder to save their marriage. There are excellent counselors available everywhere. They can be effective, if you make the commitment and really try hard to adjust and make changes. For many people, there is still value in their relationship and often there are kids who can benefit from an intact family, if the parents try to resolve their differences.

2. Refinance. If you don't want to stay together, maybe you can refinance. The key is to work with a mortgage specialist who is well connected in the mortgage industry. If you can find a mortgage specialist who focuses on people who are going through a divorce, you may discover that there are several different ways to solve your financing problems. You might be able to get some cash out or maybe you can lower the monthly payments so that one of you can afford to keep the house.

3. Lease your house. If you can't sell it and don't want to stay in it, maybe you can lease your house to someone else. There can be tax benefits from that and it can help your cash flow as well. It does take either a professional property manager or a willingness to provide or supervise the property maintenance and make sure the rent is received on time.

4. Sell creatively. Some couples are selling their homes by having a lottery. They sell a large number of inexpensive chances to win the house. You might be able to get some free publicity by donating some of the proceeds to charity or by using the money in some fashion that would be appealing to the public. Another approach is to have an auction. Don't let yourself be limited to selling in the traditional manner. Talk to some marketing people for ideas!

5. Wait for Congress. There is a huge push in Washington to come up with new programs to help solve the mortgage/housing/economic crisis. There will probably be some new programs in the very near future to help avoid foreclosures. The new programs could include ways to help you sell your house (by improving the credit markets) or make it more affordable so you don't need to sell it.

Couples going through divorce often need to sell their homes for various reasons. If you are facing that issue, consider using one of the approaches mentioned above. If you have any other ideas for solutions, please share them by sending a comment.

Thursday, January 15, 2009

Don't Try This at Home (Without a Lawyer): The Perils of Representing Yourself

Sometimes people decide to try to represent themselves in a divorce case. That's almost always a serious mistake. If you can't afford a lawyer, and if you have any assets or debts to divide, you might be better off waiting to file for divorce until you can afford to hire a lawyer. In Tarrant County, courts don't have the legal authority or resources to provide free attorneys for people who can't afford them, except in very narrow circumstances, which don't usually include divorce cases.

If you find yourself in a divorce and you don't have the funds to pay an attorney, you are probably better off negotiating a settlement than you would be in going to trial. If you try to negotiate without an attorney to help you, keep in mind that you probably don't have the leverage to get much of what you would like in settlement. Nevertheless, you would probably come out worse if you went to trial.

There are many problems you will likely encounter if you go to trial representing yourself in a Fort Worth, Texas family law court. In general, you will be required to act like an attorney in many ways, even though you don't have the training or experience. Here are some of the obstacles you will face, especially if there is an attorney on the other side.

1. Local rules of court. Tarrant County family lawyers are required to follow a set of local rules of court that were set up specifically for Tarrant County family law courts. The rules set out duties and deadlines, among other things. Failure to comply can result in penalties and possible exclusion of evidence and issues.

2. Procedural rules. In addition to the local rules, there are other rules that must be observed. The Texas Rules of Civil Procedure and various sections of the Texas Family Code, as well as some other Texas and federal statutes, must be complied with. Like with the local rules, failure to follow the other procedural rules can result in penalties and possible exclusion of evidence and issues.

3. Knowing how to present or object to evidence. Simply put, you may not be able to get evidence accepted for consideration by the court if the evidence is not properly offered. There are different predicates (preliminary requirements), procedures and authentication steps which must be followed. Texas law has a number of rules of evidence which must be complied with. For example, if evidence is considered to be "hearsay", you probably won't be able to present that evidence in court, no matter how much you want the court to hear it. Watching a lot of TV or movies will not prepare you for getting evidence into a trial.

4. Knowing what is realistic to expect a court to do. In a slightly different vein, it really helps to have an attorney who is experienced in Tarrant County family law courts because that attorney will have a pretty good idea about what is realistic to expect a court to do. Part of the strategy of a case is evaluating the possibility of an outcome that a party wants. Sometimes it hurts your case if all or part of what you ask the court to do is unrealistic. That may be based on the law (what the law permits) and/or on the judge's preferences. Judges are human and can get upset or annoyed if they feel like their time is being wasted. There are so many cases pending that judges cannot afford to waste time on trials that are absurd. Asking for something the judge won't or can't do may result in adverse ruling in other areas as well.

5. Properly dealing with experts in court. Whether the expert is there for financial testimony or psychological issues or something else, there are certain ways to properly ask questions of experts. There are also many improper and objectionable ways to ask questions. This is a specific area where a non-lawyer may not know how to get admissible evidence in front of a judge. An experienced attorney can often tie up another attorney on issues involving experts. It would not take much for an attorney to block a non-attorney from getting expert testimony in.

6. Making the best impression possible. With experience, an attorney learns skills and gains insight about persuasion and communication. Knowing how trials proceed and often knowing something about the judge's preferences give an attorney a great head start in making a good impression in court.

7. Avoiding upsetting the judge. Judges are human and they can get ticked off, some easier than others. With experience, attorneys usually learn what they can get away with and what they should avoid with certain judges. A person representing him/herself lacks that insight and runs the risk of offending a judge and that can affect the outcome of a case.

Divorce is a very serious matter. It is life changing. There can be huge consequences financially. Children's issues are being determined by a stranger. If you are facing a divorce, you should only represent yourself as a last resort. Instead, you should explore every financing option available, including taking a loan or maybe using some home equity, so that you can hire an attorney. In Fort Worth, and throughout Tarrant County, Texas, there are many fine family lawyers who charge a variety of rates and make many different fee arrangements. If you can't find one you can afford, keep looking.

Finally, as another alternative, if you end up representing yourself, try being realistic, be reasonable and be ready to compromise. Even with your own attorney, those are things you need to do. For some reason, parties who represent themselves frequently seem to be unrealistic, unreasonable and uncompromising. Help yourself by being aware of what you are doing and try to act in a manner that will lead to settlement. In almost every case, settlement is preferable to a trial for many reasons.

If you would like to share your experiences representing yourself or with your spouse representing him/herself, please send in a comment.

Wednesday, January 7, 2009

It's Tax Time!

Once the calendar flips over to January, people inevitably start thinking about filing their income taxes. Some look forward to getting a nice refund. Others start worrying about how they will pay whatever taxes they owe. Still others don't have any idea where they stand. When couples go through divorce, their tax lives often become much more complex. I'm not going to try to give tax advice here, but there are some things for you to look for and think about as you start planning your taxes.

Let me start with my conclusion: You need to see a CPA to make sure the taxes are done correctly and that you don't end up paying more than your share. Here are some of the issues to consider:

1. Especially this year, in the midst of the economic crisis, there are many changes in the tax laws. It takes a professional to keep up with the changes.Tax breaks come and go. It would take a lot of time and study for an amateur to correctly know all the changes.

2. While it is tempting to just rely on tax software and do your own taxes, especially if you have done it in the past, you may not be up to the task this year. If you are in the middle of a divorce, there are many decisions that have to be made on the taxes and it would pay you to get help. President Obama's new Treasury Secretary, who was a high official with the Federal Reserve Bank in New York, used a software program, made a major mistake with his return and almost didn't get confirmed as Secretary. He could have avoided that problem if he had used a competent professional.

3. Make sure you and your spouse both don't claim the same deductions, exemptions and credits. That frequently happens during divorces. That requires communication and a professional to help find the best course of action.

4. Be careful if any of the following happened, or you think may have happened, in the last year:

  • a house was sold,
  • debt was forgiven,
  • someone was unemployed,
  • funds were withdrawn from a retirement plan, or
  • a family business went under.

You should have a CPA help you analyze the situation. There are many other potential traps in the tax laws.

5. If you are separated, but not divorced, you should figure out whether it is to your advantage to file a joint or separate return. A CPA is best able to look at all the factors and recommend a course of action.

Hopefully, these comments will persuade you to seek guidance from a CPA for the tax issues you run into when you file a tax return during a divorce.

Thursday, January 1, 2009

Are "Sleep Overs" Allowed?

Fans of the just-ended series, Boston Legal, will remember the silly question that Alan and Denny frequently asked, "Sleep over?". On that show, it was often part of the end of the episode banter between the two lawyers. If you enjoyed the unusual humor of the show, you probably chuckled when the question came up.

In real life, the sleep over question comes up sometimes in post-divorce relationships where there are minor children still in the home. Sam Hasler, who writes an excellent blog called Sam Hasler's Indiana Divorce & Family Law Blog, had a recent post about the sleep over issue in Indiana and how their new visitation schedule will deal with the issue.

The issue still arises in Texas when a parent begins a relationship with someone new and wants to have the new romantic partner spend the night when the children are present. Our standard visitation schedule doesn't address the problem. There is actually no absolute answer to the question in Texas. Most often, it comes down to what the local judge will permit and the judge will have a lot of latitude to decide. There are, of course, moral issues which are paramount and clear cut for some people. Others may not hold the same moral position and that's where the courts come in.

If you are not dealing with this as a moral issue, the bottom line becomes what's in the children's best interest. Most judges, in Tarrant County at least, discourage ("prohibit") sleep overs until the parent is married to the new person, although that can vary a little based on the children's ages and the length of the relationship with the new adult. Some judges and child specialists will recommend not even bringing around a new paramour until the parent has been dating that person for 6 months to a year. Some parents will be impatient with that, but it normally will be in the children's best interest to avoid bringing a variety of new prospective step-parents.

Sometimes the court will explicitly order no sleep overs. Even without such an order, parents should think twice about bringing strangers around their children and keep in mind how confusing and upsetting the experience may be for the children. If regular visitation is taking place, or if time is being split pretty equally (which is getting to be more common), there will be plenty of opportunities for the parent to pursue dating activities with one or more adults without the children present. When the parent has the children, it's probably going to be better to focus on the children instead of splitting one's attention between the children and a boy/girlfriend.

If you think about what's best for the children, instead of just what would be more fun for you, the answer is pretty easy. What do you think?