Divorce and Foreclosure During and After a Divorce in Arizona
Dealing with a divorce is hard enough but what happens when financial issues occur simultaneously?
A foreclosure during the divorce proceedings is a nightmare scenario. If you’re dealing with both at the same time, you should get in touch with a highly experienced Arizona divorce attorney. Your legal representative will shed more light on the situation and the possible implications.
Community Property in a Divorce
Arizona is a community property state.
The term indicates that property acquired over the course of the marriage belongs equally to both spouses. Community property is divided in the aftermath of a divorce but this doesn’t mean that a foreclosure would stop while the divorce proceedings are taking place.
One important Arizona regulation needs to be taken in consideration in such instances.
A.R.S. 25-315 states that the Arizona family court has the right to allow the sale of community property before the finalization of the divorce whenever such a sale is needed to preserve and protect the interest in that respective community property. Such a sale, for example, is permissible in the case of facing a property foreclosure and if the two parties involved are incapable of protecting the property from the foreclosure.
Stopping a Divorce Foreclosure
As already mentioned, a foreclosure process will continue during the divorce proceedings. There’s only one reliable way to stop it.
Bankruptcy is one of the options that divorcing couples can utilize. All foreclosure activities come to a stop whenever a person completes a Chapter 7 or a Chapter 13 bankruptcy filing.
Foreclosures during bankruptcy are becoming increasingly common. The amount of debt accumulated by American households is growing and bankruptcy is increasingly employed as a method for overcoming the situation.
People who have accumulated a lot of debt can do a bankruptcy filing jointly as a couple or the filing can be individual. A consultation with an experienced legal professional will once again be needed to determine who should be doing the filing and whether it’s in the best interest of the family during the divorce proceedings.
Click here for an article on foreclosure and divorce.
Foreclosure after the Divorce
As you can see, you can employ several strategies to deal with foreclosure during your divorce.
What happens, however, if you can no longer afford your home after the divorce is finalized?
This is a very common scenario for people who go from a joint to an individual income. Thus, real estate issues become typical, especially when a larger family home is involved.
If you can no longer afford to make payments on the house after the marriage dissolution, you can come up with a separation agreement that you and your former spouse reach out of court. If possible, negotiate to continue making the payments together so that the house doesn’t go into foreclosure.
For some couples, it may also be possible to continue living together for a certain period of time after the divorce is finalized. Obviously, this isn’t the best arrangement because it can lead to feelings of animosity and to problems for children.
A final possibility to consider is selling the house. Your Arizona divorce attorney and a real estate professional will consult you to suggest the best asking price and the best time to put the house on the market.
Talk to your former spouse once again about how the proceeds of the sale are going to be distributed. It may even be possible for your ex to buy you out and get 100 percent ownership of the property. Such an arrangement will enable you to eventually acquire a smaller property that will ensure comfortable and financially-sound living arrangements.
Click here for examples of child support myths in Arizona.