Louisville Divorce, Foreclosure and Short Sales

Divorce and Can’t Sell Your House For What You Owe?

A valuable guide to the benefits of a “short sale” in a divorce situation

By Dave Halpern, Real Estate Broker, Louisville Short Sale Expert

There are enough stress factors in a divorce, you don’t need to be chained to house that you seemingly cannot sell because of too much debt. There are solutions, primarily a “short sale”.
In a short sale, the lender lets the house sell for an amount short of the payoff. In most cases, the lender forgives the remaining debt.

There are many benefits to a short sale of your house in a divorce situation.

Short sale is financially better than foreclosure

1. Foreclosure ruins credit of both spouses
   • Short sale is more gentle on long term credit
   • A short sale allows the borrower to get a new loan quicker
2. One spouse buying out the other is sometimes impossible. A short sale can avoid a foreclosure or a prolonged period of unaffordable payments. It can also avoid violation of the divorce agreement if the spouse responsible for the buyout cannot perform on the court order, regardless of the following reasons;
   • When the house doesn’t appraise high enough
   • When there are credit issues
   • When refinance is impossible
3. Short sale gives the opportunity to have “forgiven debt” rather than a foreclosure, which has higher risk of deficiency judgments against the borrowers. Post-foreclosure deficiency judgments can result in;
   • Wage garnishment
   • Bank account levies and garnishments
4. Losses are typically much higher in a foreclosure, which could cause higher negative tax consequences.
5. Foreclosure can hurt security clearance and can cause job loss.
6. Foreclosure can hurt job applications.

Less stress in the divorce negotiations

1. A short sale rather than foreclosure enables one less monthly stressful communication
   • Gets the house issue over instead of the fears and the unknowns of a foreclosure and its aftermath.
   • The mortgage debt problem is being managed by a professional short sale Realtor rather than by the foreclosing lender and their attorneys who are adversarial to the borrower.
2. One less point of contention in a hostile divorce
   • Whether a hostile divorce or collaborative divorce, the short sale is can be processed parallel to the other resolutions. A short sale provides lower likelihood of debt after the sale of the house, thereby reducing or eliminating the need for agreements of debt obligations after the divorce.

Short sale is more dignified than foreclosure

1. The seller can stay in the house during the short sale.
   • Provides time to prepare for an orderly move.
   • Provides time for immediate financial survival.
2. You are not losing your house. You are selling your house and losing your debt.

Emotional value of the short sale vs. foreclosure

1. Easier on the children.
   • A short sale is a much more controlled sale than the bank and court system taking the house away.
   • There is more control over the timing of the move. Less fear of the unknown.
2. Emotional value
   • More control over the process rather than the bank and the court system controlling.
   • The borrowers don’t have say the house was lost to foreclosure.
   • The borrowers don’t have to endure the publicity of a foreclosure.
   • The house issue is resolved with dignity and respect.

Helps parties move on with their life

1. Too often feuding couples do not get divorced or continue staying together after divorce because simply because they can’t sell the house, owe too much, or the mortgage payment is too high
   • Couples are compelled to be locked together financially, sometimes referred to as “roommate marriages.”
2. A short sale enables getting rid of a house that may have bad memories.
   • Hanging on to a house may stand in the way of a new beginning.
3. Selling the house via a short sale avoids the feelings of unfairness that one spouse retained the convenience or the victory of staying in the house

Short sale reduces dependency of one spouse on the other

1. One spouse may be on the loan, the other doesn’t care, thereby giving control to the one not on the loan.
2. One spouse may be concerned that the spouse who got the house will not afford the payments, and foreclosure will wreck the credit of the other spouse who remained as a guarantor on the note
3. The out-of-the-house spouse typically cannot qualify for a new loan on a future house while the mortgage on the ex-marital home is still in both names.
4. Keeping the house because too much is owed can constrain the spouse for years.
   • Relocation for job or other reasons can be seriously impeded.
   • Making payments on an overleveraged home impedes the ability of the spouse to make child support payments.
5. A short sale avoids years of dependency and stress.
6. One spouse stays in the home, the other spouse may be responsible by divorce agreement to pay all or all or part of the mortgage payment.
   • The remaining spouse is dependent on the other spouse. A short sale gets rid of the house and that dependency, especially if the mortgage payment is unaffordable.

Spouses, divorce attorneys and mediators should always consult with a short sale Realtor expert to help optimize and facilitate the liquidation of an overleveraged marital home.

Dave Halpern, Real Estate Broker, in Louisville Kentucky, specializes in short sales and helps dozens of sellers each year avoid foreclosure. Many of Dave’s current and past clients have required a short sale due to a divorce. Many testimonials are available.

Sellers looking for foreclosure help in Louisville, KY should call Dave Halpern, Realtor, Louisville Short Sale Expert Realtors, (502) 664-7827. I will dedicate to you all the time you need for a full explanation of the process. We are compassionate, caring and patient. I will listen to your needs and wishes and customize a strategy to meet your circumstances.

I will provide you detailed information about foreclosure options and short sales. We help dozens of sellers avoid foreclosure every single year in Louisville, Jefferson County, Oldham County, Bullitt County, Shelby County, Nelson County and Spencer County.

We can help. You have options. Call even if you think your house isn’t sellable. Put an expert real estate agent on your side. Many testimonials available.

Dave also trains other Realtors how to perform successful short sales.

IMPORTANT NOTICE: LouisvilleShortSaleExpert.com is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit. We do not provide legal advice, you are encouraged to seek legal counsel. We cannot and will not charge upfront fees.