What could be the impact of owning joint property with ex-husband?
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Answer:
The answer will depend on how the names appear on any promissory notes for the mortgages on the rental units. If she and her ex-husband are jointly and severally liable for the debt and there is a default, the lenders may pursue collection from either individual or both. In most cases, a loan for purchase of a piece of real estate is secured by a mortgage which means the property is the collateral. The lender will take the property through foreclosure and sell it to satisfy the debt. If the proceeds from the sale aren't enough to pay the debt, the lender may pursue the borrowers for the deficiency. They can try to place ljudgment iens on other real property owned by the borrower.
All this obviously could affect the credit rating of the borrower and his or her ability to borrow funds for other reasons.
If the spouses have a divorce judgment or agreement, there may be provisions in there for who is responsible to pay the debts for the jointly held property. If one party defaults on their obligations pursuant to the divorce court's orders, the other spouse can pursue contempt actions in that court.
If the rental properties are owned by a LLC, creditors of the LLC must pursue claims against the LLC not the individual members of the LLC. It is important to make sure the debts really are owed solely by the LLC and not personally guaranteed by its members. If the members signed personal guarantees, they could be held liable for debts of the LLC. You'd want to examine those guarantees carefully to see if it requires one guarantor to responsible if the other defaults.
An ex-husband typically has no right or claim on any purchases made by a divorced woman after the divorce. Her main concern will be the ramifications of any unresolved or outstanding obligations that pre-date the divorce.