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Modify decree after 9 years?

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frogtexas

Junior Member
What is the name of your state (only U.S. law)? TX

I stumbled across this site while doing some research. My question relates to changing the payment terms of the division of property after after 9+ years.

I was divorced in 1999. At that time we agreed on the value of various property and related payment terms. I have paid my ex $375,000 and have two remaining payments of $12,500 due in January, 2009 and April, 2009.

We agreed that one particular piece of property had $30,000 in equity and the ex was to get $15,000 "when the property is sold". Obviously, I have not sold the property.

The ex has now retained an attorney and I received a letter stating that they want their $15,000 plus interest. We both knew of the wording and terms relating to this particular piece of property. The property and terms are specifically stated in the decree. The letter also states that they might have a case as to the agreed upon equity in 1999. They have threatened to sue to modify the decree unless I agree to sign a promissory note and begin making payments after my 4/15/2009 final payment. They also state that they should have a lien on the property. After the divorce was final, my ex signed over the property to me via a "special warranty deed" which is on file at the county courthouse.

Do they really stand a chance of getting a judge to say this needs to be changed and I should begin making payments with interest computed back to 1999? Also, what about changing the agreed to value of this property at the time of divorce? Can they get a lien on the property for this?

I am not looking forward to spending $'s contesting this, because of the "cost/benefit". But I might do it out of spite and because that is what we agreed to.

P.S. I do have an appointment with a family law attorney next week but am looking for some advice or information prior to my meeting regarding modifying a divorce decreee after such a long time and changing the payment terms.

Sorry for the long post and thanks for any help.
 


LdiJ

Senior Member
What is the name of your state (only U.S. law)? TX

I stumbled across this site while doing some research. My question relates to changing the payment terms of the division of property after after 9+ years.

I was divorced in 1999. At that time we agreed on the value of various property and related payment terms. I have paid my ex $375,000 and have two remaining payments of $12,500 due in January, 2009 and April, 2009.

We agreed that one particular piece of property had $30,000 in equity and the ex was to get $15,000 "when the property is sold". Obviously, I have not sold the property.

The ex has now retained an attorney and I received a letter stating that they want their $15,000 plus interest. We both knew of the wording and terms relating to this particular piece of property. The property and terms are specifically stated in the decree. The letter also states that they might have a case as to the agreed upon equity in 1999. They have threatened to sue to modify the decree unless I agree to sign a promissory note and begin making payments after my 4/15/2009 final payment. They also state that they should have a lien on the property. After the divorce was final, my ex signed over the property to me via a "special warranty deed" which is on file at the county courthouse.

Do they really stand a chance of getting a judge to say this needs to be changed and I should begin making payments with interest computed back to 1999? Also, what about changing the agreed to value of this property at the time of divorce? Can they get a lien on the property for this?

I am not looking forward to spending $'s contesting this, because of the "cost/benefit". But I might do it out of spite and because that is what we agreed to.

P.S. I do have an appointment with a family law attorney next week but am looking for some advice or information prior to my meeting regarding modifying a divorce decreee after such a long time and changing the payment terms.

Sorry for the long post and thanks for any help.
It is generally not the intention of the courts to allow someone to put off paying someone their share of the equity in a piece of property for 9 years. Therefore, if this goes to court, its likely that you will either be ordered to pay her, her share of the equity now, or ordered to sell the property and pay her, her share of the equity. Depending on the wording of the decree, its even possible that interest could be added.

Yes, she can certainly get a lien against the property. Depending on the overall circumstances you could even be ordered to pay her legal fees.
 

frogtexas

Junior Member
Thanks for the response!

What if other parts of the decree were negotiated with this particular agreement and wording regarding this property in mind?

Can and will a judge really overturn our agreement made 9 years ago? Especially if I have been in compliance with every other stipulation of the order?

Thanks,
 

mistoffolees

Senior Member
It is generally not the intention of the courts to allow someone to put off paying someone their share of the equity in a piece of property for 9 years. Therefore, if this goes to court, its likely that you will either be ordered to pay her, her share of the equity now, or ordered to sell the property and pay her, her share of the equity. Depending on the wording of the decree, its even possible that interest could be added.

Yes, she can certainly get a lien against the property. Depending on the overall circumstances you could even be ordered to pay her legal fees.
If the decree simply said that the OP gets $15 K when the property is sold, then OP is not in default for not paying the money. The property hasn't been sold. Therefore, it's unlikely that he/she will have to pay ex's legal fees- particularly since ex chose to accept the situation for nearly a decade without comment.

The agreement to pay $15 K was apparently reached as part of a global settlement. Both parties obviously negotiated to get what they wanted. The court is not going to second guess that and change the agreement just because one party made a bad deal.

The wild card is the statement "The letter also states that they might have a case as to the agreed upon equity in 1999." I don't know what this refers to. Depending on what it says and how it's worded, ex might be able to make a case, but there's not enough detail to know. Furthermore, there's the issue of timely action. Ex chose not to take action for 9 years - the court isn't going to force OP to be penalized for ex's inaction. If ex had taken action in a more timely manner, then OP's cost would be lower.

I'd wait to see what the attorney says, but it wouldn't hurt to post the wording of "The letter also states that they might have a case as to the agreed upon equity in 1999."
 

frogtexas

Junior Member
The letter is at my office and I will post the exact wording tomorrow. Basically, I think they just threw in this sentence about previous property value because the value has gone up and I have recently signed a gas lease for drilling. I think they are saying this to try and coerce/threaten me into signing a promissory note.
 

frogtexas

Junior Member
Also, they have not filed a petition to modify, they just said if we cannot come to some sort of agreement that they may end up filing.
 

frogtexas

Junior Member
Here is the exact wording in the letter I received:

"my opinion that the Final Decree of Divorce provisions were not so clear that my client's interest in the property was limited to 15K and an argument could be reasonably made that, based upon the language used, that the interest is one-half of the equity in the property. However, we are willing to agree that the interest is 15K if the repayment of this amount is reasonable in time and includes some amount of interest".

"I believe it to be fundamentally unfair that whatever the interest in the property, that ex should be delayed receiving it to a date you decide to sell the property and that ex receive no interest on the equity. Had this case been tried in court, I believe ex would have received the interest in the property immediately or would have received a reasonable interest rate on the interest until is was paid at a date certain rather than bing nine years post-divorce. The 15K interest is really worth less now than at the date of divorce due to inflation."

"I have not filed any pleadings regarding this property issues as I wanted to first determine if we could resolve this matter without litigation. However, without a repayment plan I will file the petition seeking interpretation of the language in the decree and attorneys fees".

My divorce decree states the following regarding this property:

Under property to me, it states "I am awarded the following as my sole and separate property, and the ex is divested of all right, title, interest, and claim in and to that property:

then it goes on to describe the property.

In a separte section which is titled "FURTHER ORDERS", it states:

"it is further ordered and decreed that when the property at XXXX is sold, and if the net proceeds are at least 30K, ex will receive 15K or in the alternative if the proceeds are less than 30K ex will receive 50% of that amount but not more than 50% of 30K".

Thanks for you input.
 

Bali Hai

Senior Member
Here is the exact wording in the letter I received:

"my opinion that the Final Decree of Divorce provisions were not so clear that my client's interest in the property was limited to 15K and an argument could be reasonably made that, based upon the language used, that the interest is one-half of the equity in the property. However, we are willing to agree that the interest is 15K if the repayment of this amount is reasonable in time and includes some amount of interest".

"I believe it to be fundamentally unfair that whatever the interest in the property, that ex should be delayed receiving it to a date you decide to sell the property and that ex receive no interest on the equity. Had this case been tried in court, I believe ex would have received the interest in the property immediately or would have received a reasonable interest rate on the interest until is was paid at a date certain rather than bing nine years post-divorce. The 15K interest is really worth less now than at the date of divorce due to inflation."

"I have not filed any pleadings regarding this property issues as I wanted to first determine if we could resolve this matter without litigation. However, without a repayment plan I will file the petition seeking interpretation of the language in the decree and attorneys fees".

My divorce decree states the following regarding this property:

Under property to me, it states "I am awarded the following as my sole and separate property, and the ex is divested of all right, title, interest, and claim in and to that property:

then it goes on to describe the property.

In a separte section which is titled "FURTHER ORDERS", it states:

"it is further ordered and decreed that when the property at XXXX is sold, and if the net proceeds are at least 30K, ex will receive 15K or in the alternative if the proceeds are less than 30K ex will receive 50% of that amount but not more than 50% of 30K".

Thanks for you input.

My advice is to tell your gold digging ex and her ambulance chasing attorney to each place a copy of the letter your recieved from them firmly where the sun never shines!!
 

LdiJ

Senior Member
Here is the exact wording in the letter I received:

"my opinion that the Final Decree of Divorce provisions were not so clear that my client's interest in the property was limited to 15K and an argument could be reasonably made that, based upon the language used, that the interest is one-half of the equity in the property. However, we are willing to agree that the interest is 15K if the repayment of this amount is reasonable in time and includes some amount of interest".

"I believe it to be fundamentally unfair that whatever the interest in the property, that ex should be delayed receiving it to a date you decide to sell the property and that ex receive no interest on the equity. Had this case been tried in court, I believe ex would have received the interest in the property immediately or would have received a reasonable interest rate on the interest until is was paid at a date certain rather than bing nine years post-divorce. The 15K interest is really worth less now than at the date of divorce due to inflation."

"I have not filed any pleadings regarding this property issues as I wanted to first determine if we could resolve this matter without litigation. However, without a repayment plan I will file the petition seeking interpretation of the language in the decree and attorneys fees".

My divorce decree states the following regarding this property:

Under property to me, it states "I am awarded the following as my sole and separate property, and the ex is divested of all right, title, interest, and claim in and to that property:

then it goes on to describe the property.

In a separte section which is titled "FURTHER ORDERS", it states:

"it is further ordered and decreed that when the property at XXXX is sold, and if the net proceeds are at least 30K, ex will receive 15K or in the alternative if the proceeds are less than 30K ex will receive 50% of that amount but not more than 50% of 30K".

Thanks for you input.
To be honest, I think that the attorney is making a very reasonable argument. I don't care if you are the ex husband or the ex wife. Nine years is a long time to wait for a share of marital equity in a property, after divorce...and you obviously have no intention of selling the property any time in the foreseeable future.

In my opinion a judge would be likely to feel that enough time has passed, and its time for you to make good on her 15k.
 

frogtexas

Junior Member
Well, it sounds like an argument can be made for both parties. Not exactly the answer I was looking for, but typical of me being thrown under the bus one more time. Again, this was not the intent of the agreement and the ex knew there was a very good chance that this property would not be sold for some time, if ever.

I am now considering countering with a one time payment of 15k on or before April 15, 2010. I would ask that they agree that any interest would not start accruing until the date that we signed the agreement. I would also request that no lien be filed on the property unless this payment is not made in a timely manner.

Thoughts?

Also, is there any way I can deduct the interest paid? Investment interest, etc. even though it relates to the division of marital property? I realize it won't help much, but better than nothing.

I am still going to meet with an attorney next week to discuss the situation and get his opinion/advice. However, to fight this may end up costing some $'s. It is like stepping over a dollar to pick up a dime.

On the bright side, at least an agreement would get rid of the ex once and for all because this is the only item left to be settled. It just pisses me off that the ex always has to be in control and gets anything and everything even though it was agreed to and signed of by a judge in a court of law.

Thanks for all of the input.
 

LdiJ

Senior Member
Well, it sounds like an argument can be made for both parties. Not exactly the answer I was looking for, but typical of me being thrown under the bus one more time. Again, this was not the intent of the agreement and the ex knew there was a very good chance that this property would not be sold for some time, if ever.

I am now considering countering with a one time payment of 15k on or before April 15, 2010. I would ask that they agree that any interest would not start accruing until the date that we signed the agreement. I would also request that no lien be filed on the property unless this payment is not made in a timely manner.

Thoughts?

Also, is there any way I can deduct the interest paid? Investment interest, etc. even though it relates to the division of marital property? I realize it won't help much, but better than nothing.

I am still going to meet with an attorney next week to discuss the situation and get his opinion/advice. However, to fight this may end up costing some $'s. It is like stepping over a dollar to pick up a dime.

On the bright side, at least an agreement would get rid of the ex once and for all because this is the only item left to be settled. It just pisses me off that the ex always has to be in control and gets anything and everything even though it was agreed to and signed of by a judge in a court of law.

Thanks for all of the input.
No, this would not be investment interest, it would be debt interest, which is not tax deductible (I am a tax professional).

Is there a particular reason why you want to make a lump sum payment on April 15th 2010? April 15th would be poor timing for most people, and that stretches it out for 18 months? Wouldn't making payments, therefore reducing interest, be more cost efficient?
 

frogtexas

Junior Member
Again, thanks for the response. Here is my thought process.

I have been making escalating quarterly payments for 9 years. I want the ex to go one full year without me making a payment. The interest at 4% would only be about $900 which in the big scheme of things is not much. Am I being too mean here?

On the tax side, during 2007, I receive a "sign-on" bonus from a gas company for the minerals and an override on this property. This was reported to me on a 1099 and listed as rents. I reported that income on schedule E. I was under the impression that you can deduct interest on debt paid if the property is "investment property", or "property held for the production of income". Is this not correct or should I also hire a CPA or tax attorney?

Thanks,
 

mistoffolees

Senior Member
Here is the exact wording in the letter I received:

"my opinion that the Final Decree of Divorce provisions were not so clear that my client's interest in the property was limited to 15K and an argument could be reasonably made that, based upon the language used, that the interest is one-half of the equity in the property. However, we are willing to agree that the interest is 15K if the repayment of this amount is reasonable in time and includes some amount of interest".

"I believe it to be fundamentally unfair that whatever the interest in the property, that ex should be delayed receiving it to a date you decide to sell the property and that ex receive no interest on the equity. Had this case been tried in court, I believe ex would have received the interest in the property immediately or would have received a reasonable interest rate on the interest until is was paid at a date certain rather than bing nine years post-divorce. The 15K interest is really worth less now than at the date of divorce due to inflation."

"I have not filed any pleadings regarding this property issues as I wanted to first determine if we could resolve this matter without litigation. However, without a repayment plan I will file the petition seeking interpretation of the language in the decree and attorneys fees".

My divorce decree states the following regarding this property:

Under property to me, it states "I am awarded the following as my sole and separate property, and the ex is divested of all right, title, interest, and claim in and to that property:

then it goes on to describe the property.

In a separte section which is titled "FURTHER ORDERS", it states:

"it is further ordered and decreed that when the property at XXXX is sold, and if the net proceeds are at least 30K, ex will receive 15K or in the alternative if the proceeds are less than 30K ex will receive 50% of that amount but not more than 50% of 30K".

Thanks for you input.
Frankly, I wouldn't worry about it too much. Your ex (and his/her attorney) can write all the self-serving letters they wish. Getting the court to modify an agreement after 9 years (when your ex could have filed for a modification any time during the 9 years) isn't reasonable.

In spite of it looking like you're benefiting from the delay, it's also important to remember that you've been paying the mortgage on the property, taxes, upkeep, etc, so it's not reasonable for the ex to benefit from all the money you put in. You WILL Have to pay the $15 K, but I don't see that you owe any more than that.

Furthermore, what was the value 9 years ago? If you had sold it right away, would your ex have gotten the full $15 K or something less? If they'd have gotten less at the time, then they HAVE benefited from the delay.

It's not your fault (nor the court's fault) that your ex negotiated a foolish agreement. But in the worst case, I would figure out what the equity was at the time of the divorce. I would start with their half of that figure (but no more than $15 K since that's what the decree says) and add 3% per year - which is what a savings account averaged over that time. That's the maximum I'd even consider paying. But I don't think you're going to have to. I'd ignore their threats. If they go to court, hire an attorney and ask him to countersue because their case is frivolous. Finally, if they go to court to ask for more money from the property, I would tell the court that if they want to reopen the agreement you want your $375 K back - with interest.

I just don't see them getting anywhere. The agreement is clear and they chose not to do anything about it for 9 years.
 

LdiJ

Senior Member
Again, thanks for the response. Here is my thought process.

I have been making escalating quarterly payments for 9 years. I want the ex to go one full year without me making a payment. The interest at 4% would only be about $900 which in the big scheme of things is not much. Am I being too mean here?
Its petty and vindictive. Apparently your ex agreed to allow you to pay out the property settlement over time, rather than having to liquidate assets to settle up with her in a lump sum at the time of your divorce. That was actually pretty generous on her part and not something that a judge would have likely given you.

On the tax side, during 2007, I receive a "sign-on" bonus from a gas company for the minerals and an override on this property. This was reported to me on a 1099 and listed as rents. I reported that income on schedule E. I was under the impression that you can deduct interest on debt paid if the property is "investment property", or "property held for the production of income". Is this not correct or should I also hire a CPA or tax attorney?

Thanks,
Ok...you are misapplying the rule to your situation. You did not borrow money to earn money. You owe your ex wife for a share of the equity in the property. That is a simple, personal debt that has nothing to do with any investment.

Now, if you owned the property with a partner, and your partner was receiving a share of the rents, (or heck, even if your ex had been receiving a portion of the rents as co-owner) and then you entered an installment agreement to buy your partner out, and you started receiving 100% of the rents, THAT would be investment interest. The interest would be directly related to your increase in income.

However, your wife has not been receiving a share of the rents, you are receiving 100% of the rents. Therefore the debt has nothing to do with an increase in income or potential income and would not be tax deductible.

Another example: You take out a loan on the property to buy a car, because that's cheaper money to borrow than a car loan. Again, that is not investment interest, because you did not borrow the money in order to make or potentially make more money. You borrowed it to buy a car. Therefore its not tax deductible.
 
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