You Got the House in the Divorce: Along with a Huge Lien!

The dust settled and the smoke cleared after your divorce. The final papers were signed nearly eight months ago and Sarah had really started to move forward, full-steam with her life post-divorce. In her and James’ settlement, they agreed that she would get the vacation home in South Carolina. And, as Sarah began to complete the paperwork to transfer the property to her name only, she discovers a massive debt incurred by James. That debt resulted in a lien against the property that she had no idea existed. Now what?

Sarah is understandably very upset and does not want to be responsible for this debt that she never know James racked up paying for gambling debts he put on her credit cards. And, because of the lien, if she tries to sell the property, the debt of nearly $150,000 will be paid to the credit card companies as part of the sale proceeds. She is at her wits end, but simply does not know what to do. Should she confront James? Does she need to go back to court? Is her divorce settlement even valid?

Both Sarah and James had attorneys in the divorce and she believed that she was protected. Her attorney was thorough and requested all information about the couples finances during the process. Her attorney even asked to depose James because of some uncertainty about his business income. At no time did James ever mention this gambling debt or that the credit card companies were coming after the vacation home. Sarah firmly believes that he hid this purposefully from her in an attempt to walk away from the responsibility of paying his gambling debts.

Sarah may have a good case to go back into her divorce and reopen the final judgment of divorce. It’s certainly not easy to go back to court and tell the judge that your divorce needs to be reexamined. But, if a fraud was committed by James lying not only to Sarah, but to the court, this may be exactly what happens. New Jersey court rule 4:50-1 allows courts to change a divorce settlement for a variety of reasons. Most relevant to Sarah and James are:

Just discovering new evidence: If you weren’t aware of information during your divorce and you just learned about it, such as Sarah learning of the lien, you can ask the court to reopen your divorce case and take into account this new information.

You’ve learned of fraud or other misconduct by your ex: If James did purposefully keep this information from Sarah and her attorney during the divorce, she could argue that her divorce needs to be reexamined by the court because this fraud made her act a certain way during the negotiations and settlement. It is without question that Sarah would not have accepted the vacation home with the debt and that fact would certainly have affected the outcome of their divorce. Perhaps James would have had to satisfy the debt. Or, Sarah may have accepted a different piece of property.

The case involved a mistake or excusable neglect: Let’s give James the benefit of the doubt. Perhaps he really did not recall the lien on the North Carolina property. Perhaps at the time of the divorce negotiations and settlement, the lien hadn’t attached, yet and he simply forgot this was a possibility. Maybe James told his attorney, but his attorney did not relay the information. Any of these scenarios is still a reason for a court to consider going back into the divorce and allowing the parties to rework their settlement.

Sometimes, reopening a divorce means that a divorce trial may have to happen. If the settlement as it is simply is not workable, the parties may come to an impasse. In that situation, the judge will have to hear both sides of the issue and make a decision regarding some or all of the issues of the divorce. If you can, attempt to again work out your issues. It will certainly save you time and money.

Above all, if you discover that you have been misled or tricked into a settlement agreement with your ex-spouse, talk to your divorce attorney immediately. Bring to them the newly discovered evidence and detail all that you have learned since the divorce. Your attorney will be able to guide you appropriately and will be able to represent you in a motion to reopen your divorce if it comes to that. Your attorney may also suggest asking for sanctions against your spouse, especially if her or she willfully misrepresented facts to you, your attorney and the judge.

If you have further questions about your divorce settlement or any other family law issue, contact us today to schedule your confidential consultation with one of our experienced and compassionate attorneys.