Rhode Island Divorce and Family Law Attorney | Attorney Christopher Pearsall

Two Benefits to Having a Marital Settlement Agreement by RI Divorce Attorney Christopher Pearsall

If you had the choice of having an easy uncontested Rhode Island divorce and a difficult mess of a divorce, which would you choose?

I would like to think that you would choose an easy uncontested Rhode Island Divorce because I prefer to think that as a reader of this blog you have a lot of common sense and you would rather see things go smoothly instead of roughly.

There are two benefits that divorcing spouses should be aware of on a practical level.

If you don't understand what a Rhode Island Marital Settlement Agreement is, then here it is in a nutshell.

Rhode Island Marital Settlement Agreement (MSA) 

A Marital Settlement Agreement (MSA) is a written contract which is entered into and signed by both parties and contains all the items you and your spouse agree upon regarding the manner in which you are going to dispose of your marital estate (your marital assets and debts) and usually includes all the specific agreements you and your spouse have made to provide for your Minor Children.

A successfully drafted Marital Settlement Agreement that is signed and executed by both spouses to a divorce creates two specific benefits for the spouses.

First, a well-drafted Marital Settlement Agreement allows the attorneys to quickly authenticate the MSA by the testimony of the spouses and ask that the court accept it and approve it as a full exhibit.  

Assuming this is successful, the MSA eliminates the need for the judge to hear countless pages of details and conditions about all the assets, debts and considerations for the children, except those provisions in the Marital Settlement Agreement that are required to be placed on the record of the family court because they relate directly to the well-being of the Minor Children, Healthcare directives of the parties, and provisions regarding Alimony.  This, of course, saves the spouses considerable time on the witness stand and makes the proceeding flow much more quickly.

Second, many experienced Rhode Island Divorce Attorneys charge different rates for time spent preparing for a case and time spent "in court."  Time spent "in court" is usually more expensive.  Therefore, the shorter your uncontested hearing, the less money you will spend on the actual proceeding simply because you used a Marital Settlement Agreement.

Other benefits will be discussed in subsequent articles, including problematic issues and how they might best be addressed.

Authored By:

Christopher A. Pearsall, Attorney-at-Law

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Can my RI Divorce Lawyer Save My House?

RI Divorce Lawyer Question:

    For the sake of this question I'll call myself William.  I have a 401k that I began 10 years before I got married.  It had about $75,000 in it before Tammy and I got married.  We've been married for the past 13 years and my 401k is up to about $285,000.  I'm concerned about being able to pay my attorney's fees.  I'm also concerned because I want to keep the house my wife and I live in.  The house has been in our family for generations.  I don't think I can get a loan to buy out my wife's interest in the house because my credit isn't so good.  We have about $140,000 in equity in the house.  What can I do to save my house?  One attorney has told me that Tammy will get 1/2 of my 401k and that I can't touch my 401k monies while the divorce is pending.  This doesn't seem fair.  It looks like I'm going to lose 1/2 of everything I built.  I know Tammy is entitled to part of everything but it seems like I'm being left with no options but to lose the house and 1/2 of my 401k.  Is there anything I can do here?

    - William  (Coventry, RI)

RI Divorce Lawyers Answer:

    William, I can tell you that you have more options than you may think.  Ultimately, your 401k plan is the key to resolving your difficulties.  A 401k if much more versatile than a pension, annuity, IRA or any other investment vehicle. 

    First, Check with your 401k Plan Administrator.  Ask whether you are allowed to take a loan up to a certain percentage of your vested 401k balance.  Then confirm the amount of your vested balance and the allowable loan that you could take from your vested balance.  Loans on 401k plans are typical and are usually limited to 50% of your vested balance.

    For the sake of example let's assume this is a typical 401k plan and you can take a loan of up to 50% of your vested balance.  Based upon the numbers you have provided, I would be willing to venture a guess that you may be told that the entire $285,000 is vested and that your maximum allowed loan at 50% would be limited to $142,500.  You should also find out how much interest will be charged on whatever loan you take out and the maximum repayment period.  Of course you will be repaying yourself the interest so this is a considerable benefit to you.  Plus, you can check with your accountant to see if any of the 401k interest is potentially deductible because it is used as a buyout of your wife's interest in the real estate and adds to your adjusted basis in the property.

    Now William, there are a few things to take into consideration but careful planning will eliminate difficulty.  If you are already in the midst of a divorce then your are bound by the Automatic Orders of the Court.  These Orders prevent you from spending, hiding or doing anything out of the ordinary with any assets without the written consent of your spouse.  You may not unreasonably incur any debt that is not in the normal course of your home or running your business except for paying your attorney's fees.

At the outset this looks like it poses a massive hurdle but your case is a bit different.

The Rhode Island Family Court has the power of equitable distribution over the marital estate.  This means the marital assets and debts of the parties.  This does not include pre-marital assets.  You have already disclosed that your 401k had a value of $75,000 before you got married.  This $75,000 is a premarital asset.  These funds are yours.  Additionally, any appreciation relating solely to those $75,000 is also a non-marital asset because they are funds generated purely by virtue of a the pre-marital asset without further contribution from the parties.  Thus if over the 13 years if your 401k averaged 7% per annum return then your $75,000 has roughly appreciated to $180,738.38 making the marital portion of your 401k $285,000 minus $180,738.38 which equals $104,261.62.    The $104,261.62 should roughly be the true marital portion for distribution by the Rhode Island Family court.  It is certainly viable for you and your attorney take the position that this should be undisputed and that $180,738.38 is truly a premarital asset to which your wife is not entitled. 

If you are allowed a 50% loan to vested monies then you have in excess of $90,000 that you can take as a loan for both your attorneys' fees and to buy out your wife's interest in the house.  If your wife's share of the house equity is agreed to be $70,000 then even with poor credit you should be able to secure an equity line of credit or a refinance of the house even if you take out a loan of $40,000 and put $35,000 toward the house and rely upon $35,000 of the house equity to balance out the loan.  This also leaves you with an additional $5,000 for attorneys' fees.

If you take out a loan of $35,000 as suggested, then you still have $145,738.38 that should remain a pre-marital asset that you are entitled to claim as a pre-marital asset.

Keep in mind that this is an arguable position.  Technically, it is a judge's role to determine whether an asset is marital, non-marital, premarital or otherwise exempt from the court's equitable distribution power.  However, when the issue is as clear cut as this in accordance with the statutes, most judges will not penalize an individual for following the advice of his attorney in order to settle a matter on the judge's calendar.

If the judge disapproves of the manner in which you proceed and finds the circumstances to require the court's authority, the most likely conclusion is that the Judge will consider any disproportionate amount as an offset to your spouse against the marital estate.  However, pursuant to the Rhode Island General Laws this is an arguable position that you should be able to take and use without the written permission of the other party or an order of the court, especially if it is used in an effort to settle the case. 

However, if the funds are used for purposes other than settling the case, be prepared for the court to take more appropriate actions to punish you as an abusing party even if you are within your legal rights.

Authored By:

  Christopher A. Pearsall
Attorney-at-Law
70 Dogwood Drive, Suite 304
West Warwick, RI 02893

Call (401) 632-6976 Now for your low-cost consultation.
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Copyright 2008.  Christopher A. Pearsall, A New Rhode Island Divorce Lawyer for a New Millenium

*The Rhode Island Supreme Court licenses all attorneys in the general practice of law.
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Rhode Island Divorce Lawyers Tip: Divorce History a Help!

Originally the Rhode Island Family Court and divorce proceedings were part of the Rhode Island Superior Court.  Though they remained a court of superior jurisdiction, the Family Court was created to address family related matters which in and of themselves comprised a substantial number of cases focused on the specific subject of legal matters dealing with relationships, the well-being of the family unit and contracts such as marriage.

Seeing the need for a separate court to address divorces and relationships which resulted in contract-like situations, the RI General Assembly established the Rhode Island Family Court system and its underlying structure.

It is helpful and important to know that Rhode Island Divorce lawyers often deal with very emotional issues for their clients because with marriage often comes divorce - the severing of the living situation, financial dependencies the parties have with each other, the children borne of the marriage, and the assets and debts accumulated during the courts of the marriage.

It is extremely help however to understand that the RI Family Court system arose out of the Superior Courts due, in large part, to the contractual nature of marriage.

A marriage, though not viewed by many people as such, is in fact a contract.  During that contract children may be born, assets may be acquired, debts may be accumulated and one of the parties may need financial assistance to survive the dissolution of the marriage contract.

Do you want to get through your divorce and move on with your life as quickly as possible?  Then as difficult it is, put aside your emotions and think about where the judge is sitting and what he or she must do.

Imagine your case the way the judge does.  The judge sits there day in and day out hearing all kinds of saga, including emotions, hard luck stories, bitter retorts, vindictive statements, heartfelt pleas to punish the other spouse and more.  Yet the judge isn't there to be your counselor or to take the court's time so that you can say your piece just to get it off your chest and feel somewhat better just for having said it.

The judge sits on the bench in a divorce case to help the parties reach an equitable result to the dissolution to your marriage contract.   

Think about the judge's role and take the most direct result to the resolution of your divorce that is fair and reasonable or that is acceptable to you.

While the judge sits on the bench he or she has a specific role, namely to identify and deal with the important aspects of what your marriage produced.  Usually it is fairly straightforward.

1)  Minor Children
2)  Marital Assets
3)  Marital Debt
4)  A Spouse's ability to financially survive after the divorce.

While it is true that each of these items has each of its own characteristics, a divorce can reasonably be converted down into these four (4) basic elements for the purposes of understanding how you can help yourself through it.

This is simply a practical tip that will help any party to a divorce, IF, you can do it. 

1)  Put your emotions of rejection, anger, feelings of fault, depression, and all other emotions about your relationship away as much as possible when dealing with your Rhode Island Divorce Lawyer.  Why?  Because lawyers address the legal issues the court will rule on and unless they have counseling training for mental health issues, they are not the best ones to voice those concerns too.

I am not recommending that you bury your feelings or that you don't deal with them at all.  I am suggesting that you find a good psychologist, psychotherapist, individual counselor, family counselor and/or marriage counselor and talk them out, whether they be feelings about your spouse's infidelity or your own insecurity or fears.  Your emotions should be dealt with by a professional skilled in mental health and emotional issues.

2)  Focus on what the judge must deal with in your marriage.  Those are the four points I have listed above.  These are at the center of your Rhode Island divorce.   If you can remove the emotion from these points and focus on them in the order they are listed and decide upon them in the order in which they are listed then you will have the best opportunity to resolve your divorce as quickly and and effectively as possible to move on with your life.

The Rhode Island family courts are not a forum for waging vendettas and punishing your spouse for the wrongdoing you believe he or she has committed that have caused you to feel hurt or embarrassment.  Move on with your life sensibly and maintain your self-respect and dignity.  In this way, your life will grow and be enhanced much more quickly.

Life is all about change but not all change is bad.  Divorce is a big change for spouses and for children but it need not be a bad change.  Divorce is not only an ending of something you are familiar with, it is the beginning of something new, a great adventure that may bring you untold happiness without measure.

Embrace it and Live for You!

Authored By:

  Christopher A. Pearsall
RI Divorce and Family Lawyer
70 Dogwood Drive, Suite 304
West Warwick, RI 02893

Call (401) 632-6976 Now for your low-cost consultation.
from
Rhode Island's Most Affordable Divorce & Family Law* Attorney
now
100% Digital and Virtual!

Copyright 2008.  Christopher A. Pearsall, A New Rhode Island Divorce Lawyer for a New Millenium

*The Rhode Island Supreme Court licenses all attorneys in the general practice of law.
Pearsall.net | AttorneyPearsall.com | Rhode Island Divorce Tips | ChristopherPearsall.com | GuaranteedWealth.com | Rhode Island Divorce Attorney | Rhode Island Divorce Lawyer | Chris Pearsall
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Rhode Island Divorces | How to save up to $3,000!

I've previously written Rhode Island Divorce articles about civility and trying to work with your spouse to resolve your issues.  What I didn't mention in those other divorce articles is that by remaining civil, holding your temper and keeping a cool head is that it can save you a hefty sum of money.

One of the most time consuming parts of any divorce is reaching a Marital Settlement Agreement.  A Marital Settlement Agreement is typically a document that embodies all the terms of what you and your spouse have agreed to and it anticipates what could happen in the future, to the extent that reasonable changes can be foreseen and prepared for. 

Assume that your attorney in this example costs $200 per hour and it takes him or her 4 hours to draft and re-draft the complete Marital Settlement Agreement which includes provisions to protect you and provisions to specify which states laws apply, etc....  That's $800 you would save if you just came to an agreement with your spouse, wrote out all the terms and conditions and you both signed it before a notary public and then testified at the hearing that your signature is genuine, that you signed it freely and voluntarily and that it is fair and equitable. 

Now, 4 hours is a minimal amount of time to prepare a Marital Settlement Agreement which goes back and forth between the other attorney for changes, additions, removals, etc.... So when I say 4 hours, I am giving you an almost unrealistic figure.  In fact, if it's to be properly detailed and is prepared by an attorney then the attorney is going to try to anticipate anything and everything that could affect you in the future so the attorney is likely to take a good 10 hours on the Marital Settlement Agreement.  Now what if your attorney charges $300 per hour but you and your spouse come to your agreement on your own.  You just saved a whopping $3,000 on legal fees. 

Now here is a question you can easily answer.  Would you rather keep a cool head, be reasonable with your spouse and reach an agreement to hang on to that money or give it to a Rhode Island divorce attorney?

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

Attorney Pearsall's practice is focused almost exclusively in the areas of Divorce and Family law.

CALL (401) 354-2369 now to schedule for your low-cost, no obligation legal consultation!

NOTE:  The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue.  This site is based on Rhode Island and is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.

Copyright 2008 - Christopher A. Pearsall and Pearsall Law Associates (All Rights Reserved.)

Help Rhode Island Divorce Attorney Christopher Pearsall Save You Money!

You can help your Rhode Island Divorce Attorney immensely by providing information at the very beginning of your representation. The information I find most valuable as a Rhode Island Divorce Attorney is the following:

• Name and Description of Each Asset?
• Current Value of Each Asset?
• Who Purchased the Asset?
• Whose Name is the Asset Held In?
• Where is the Asset Located?
• Was this asset given to you or your spouse as a gift or inheritance?
• If so, who as the asset given to (your or your spouse) when and why?

• Name of Each debt?
• Person or Company to Whom the debt is Owed?
• The Account Number for the debt?
• The existing balance of the debt
• Who created the debt?
• When was the debt first created?
• What were the monies used for?
• Who used what monies that make up the debt?

• Do you have children?
• How many children do you have with your current spouse?
• Do you have any adopted children?
• What are the children's names and dates of birth?
• Where do the children live?
• Who is the primary physical caretaker of the children?

• When were you married?
• Where were you married?
• Are you still living in the same household?
• If not, when did you separate and why?
• Do you have evidence of infidelity of your spouse?

• Identify your employer's name and address?
• What is your job, and what are your job duties?
• How long have you worked with this employer?
• How much do you make per week?
• Do you receive any overtime?
• If you receive overtime, how much do you receive?
• Is your overtime regular?  (weekly, biweekly or monthly)

• Identify your spouse's employer's name and address?
   
• What is your spouse' job, and what are your spouse's job duties?
   
• How long has your spouse worked with this employer?
• How much does your spouse make per week?
• Does your spouse receive any overtime?
• If your spouse receives overtime, how much does your spouse receive?
• Is your spouse's overtime regular?  (weekly, biweekly or monthly)

        Give a thumbnail sketch of your educational background and the educational background of your spouse.

This information will be invaluable to your Rhode Island Divorce attorney as long as you really take time to brainstorm.  Remember that automobiles are assets but any financing for them is a debt.  Also, pensions, 401ks, investments, CD's, bank accounts are assets but loans against those retirement vehicles are debts.  A house is an asset but mortgages and equity loans against those items are debts. 

This is not to imply that you couldn't figure this out.  Yet there are some clients I've had over the years who have experienced frustration because they truly do not understand the nature of each question.  As an example, most clients will not put down their new television and surround sound system or their new dining room set as an asset because they just see it as furniture.  It's understandable and yet knowing these things is helpful to your attorney and to the court because they are things that may have to be divided between the spouses.

If you want to get a jump on things and help an attorney evaluate your case, then complete this list thoroughly and take your time. You'll find it's well worth it and it should save you money on attorney's fees in the long run.

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

Attorney Pearsall's practice is focused almost exclusively in the areas of Divorce and Family law.

CALL (401) 354-2369 now to schedule for your low-cost, no obligation legal consultation!

NOTE:  The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue.  This site is based on Rhode Island and is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.

Copyright 2008 - Christopher A. Pearsall and Pearsall Law Associates (All Rights Reserved.)

Rhode Island Divorce Attorney Pearsall - Equity Loans as Marital Debts

Equity Loans are very similar to mortgages. Usually they are loans secured by something of value, traditionally a peice of real estate that is worth more than the loan being taken out. A mortgage for an equity loan is typically recorded and though it can be a first mortgage on the property, it is often a second mortgage.

Equity loans can also be extended upon other collateral of value, such as bonds, stocks, valuable business equipment, jewelry and the like.

Fred has been married to Rachel for 26 years. Over the years they have accumulated a nice house along the water which is paid off. Fred has a 22 Foot Scooner that has a galley kitchen and sleeps six (6). Rachel has four (4) collectible fur coats that she has kept in mint condition and lots of diamond jewelry including necklaces, anklets, bracelets and rings that she only wears for special occasions.

Fred has kept the finances, but he hasn't done it very well and after he and Rachel retire, he realizes they have no liquid cash coming in to sustain their lifestyle.

Fred panics as Rachel tells him she's going shopping at Carte Blanche. Scrambling to figure out what to do Fred finds the deed to his schooner and grabs the three most valuable peices of jewelry that he bought for Rachel.

While Rachel is gone Fred runs out and has the jewelry appraised and gets a value assigned to his Scooner. Fred then runs down to Focus One Finance and applies for a loan by pledging the equity in the jewelry and his schooner. Focus One Finance holds the title to the schooner and records a lienholder statement against it. Focus One Finance also holds the jewelry and tell Fred that he'll get all of this back when he satisfies his Equity Loan terms. Focus One Finance wires $85,000 to Fred's bank just in time for Rachel to make a purchase with her MasterMoney Card.

Fred rushes back home feeling that he has put an end to the crisis.

Two weeks later Fred gets his first Equity Loan Statement. He doesn't want to pay it out of the monies he got so he puts it in a drawer. A month later another statement comes with a double payment due and penalty fees. Again Fred stuffs it in the drawer, not wanting to deal with it at this time.

Finally in the third month Fred knows he can't avoid this anymore, but rather than pay the statement he waits until Rachel is out of the house and he takes her two best fur coats and runs down to Focus One Financial. At first Fred offers them as payment and tells Focus One that the fur coats are worth much more than the payments due, but Focus One Financial wants payment ...they do not want to barter. Financial Focus One states that the best it can do is re-finance his loan and capitalize the interest and penalties and hold the garments as additional collateral since he did not make the first three payments. Fred agrees and returns home.

A week later Fred and Rachel are invited to a formal dinner event. Rachel immediately notices that several of her best peices of jewelry are gone and so are her fur coats. Rachel insists on calling the police but Fred urges her to keep looking. After about an hour, Fred breaks down and tells Rachel the whole story. Rachel is furious! She demands that he go right down and get her furs and her jewelry back immediately. Fred goes to Focus One Financial but they will not release the items until he fulfills the Equity Loan. Fred checks the checkbook. There is only $5,300 remaining in the account. Fred goes back and checks all the entries and they are all purchases that Rachel made for herself.

Fred returns to explain to Rachel why he can't get the items back. Rachel quickly packs a suitcase, takes her debt card and their check book and leaves.

The next afternoon Fred is served with divorce papers. Fred goes down to the bank to get some monies to hire an attorney. The ATM gives him $300 and then says $0 balance. Rachel had withdrawn the other $5,000, presumably to hire her attorney.

How might this mess be dealt with by the Rhode Island Divorce Court?

Fred didn't tell Rachel about the equity loan. Is Rachel likely to be held responsible for the equity loan given that circumstance?

Fred pledged Rachel's jewelry and fur coats as collateral against the equity loan. In the divorce proceeding could Rachel get them back from Focus One Financial without paying off the equity loan?

Rachel used up virtually every dime of the equity loan money. Even if Rachel didn't know where the monies came from, might she be held responsible for the loan as well since she received the benefit of the monies?

Is the Equity Loan a marital debt such that the Rhode Island Family Court has the power to determine its apportionment and assignment, or does Fred's conduct in deceiving Rachel render this his own private debt?

There are three (3) other issues (Questions) in this case that you should spot.  Can you see them?

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

Attorney Pearsall's practice is focused almost exclusively in the areas of Divorce and Family law.

CALL (401) 354-2369 now to schedule for your low-cost, no obligation legal consultation!

NOTE:  The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue.  This site is based on Rhode Island and is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.

Copyright 2008 - Christopher A. Pearsall and Pearsall Law Associates (All Rights Reserved.)

Hiring a Divorce Lawyer with a Credit Card!

Paying for your Rhode Island Divorce Atttorney doesn't come cheap depending upon who you hire.  Many people feel trapped and unable to file for divorce or defend against their spouse's claims simply because they don't have the monies to hire a decent Rhode Island Family Attorney.

However, if you have a credit card, whether it is in your own name or jointly held with your spouse, that credit card can be used to hire the lawyer.

Now most people might worry because all they believe they are doing is increasing their debt.  However, there are a few considerations that may outweigh the use of a credit card to pay for the attorney who will represent your rights.

First, if you don't hire the divorce lawyer, might you take a greater loss on your rights than the amount you are putting on the credit card. Second, if your spouse has a lawyer or even if he doesn't, isn't it reasonable to claim that the hiring of the attorney was a necessary expense to help the marriage come to its conclusion fairly and equitably?  Both issues are more than reasonable and it is an entirely valid argument to make to the court that the charge for your attorney was reasonable and necessary and therefore it is a marital debt just like any other.  This is especially true if your spouse was the party filing for the divorce.

If you need to hire an attorney for your divorce and your only recourse is a credit card, it is probably your best bet to use the card, protect your rights and hire a decent family law attorney.

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

Attorney Pearsall's practice is focused almost exclusively in the areas of Divorce and Family law.

CALL (401) 354-2369 now to schedule for your low-cost, no obligation legal consultation!

NOTE:  The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue.  This site is based on Rhode Island and is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.

Copyright 2008 - Christopher A. Pearsall and Pearsall Law Associates (All Rights Reserved.)

Rhode Island Divorce Attorney Pearsall - How are Mortgages treated in a Rhode Island Divorce?

Mortgages are one of the common debts that are encountered by the court in a Rhode Island Divorce proceeding. Typically the mortgage is on the marital home that the parties live in. In less frequent cases the mortgage may be on a second home, rental income property or even a summer home or beach house.

It is a common misconception in a Rhode Island Divorce that the mortgage debt belongs solely to the spouse or spouses whose names appear on the mortgage itself. Mention this, because typically the mortgage lender will make it very clear at the time the mortgage is given as to who is responsible for payment of the mortgage.

So why the difference, right?

Though this tends to be an oversimplification, the difference is that the legal mortgage given by the bank or other lender in exchange for a loan or finance monies is a legal and binding contract between the parties that sign the contract. However, when the Rhode Island Family Court justice looks at the mortgage, even though he or she may consider whose name is on the mortgage, the judge is more concerned with the character of the debt. For instance, was the mortgage used to further the marriage or the marital assets. The judge may question what monies, if any, came out of the mortgage, who controlled them, who used them and what were they used for. The Rhode Island Family court judge in apportioning and assigning debt is not bound by the contract that was signed between the lendor and the mortgagor. The question is one as to whether the mortgage is a Marital Debt. Then, depending upon how it was used, who used it, who primarily paid it and who might currently be capable of paying it, who should be held responsible for that marital debt as between the spouses, or who should be responsible for what portion of that mortgage.

This example might help illustrate the difference, and the confusion that can result if your Rhode Island Divorce attorney does not take the time to explain the obligations to you properly.

Tim and Rose are married and own a home in Cranston, Rhode Island. The deed to the house and the mortgage are in both of their names. Tim is a construction company supervisor and the primary wage earner in the family and his income accounts for about 90% of the mortgage payment each month. Rose works full-time with children afflicted with Downs Syndrome which is very rewarding but does not pay nearly as well and her income covers the remaining 10% of their house mortgage.

In early 2006 Tim gets a large pay raise and a profit sharing bonus check. The check is so large that he runs out and buys a beach house in Narragansett, Rhode Island that is just in his name. When he comes home to talk to Rose he is a bit nervous. Yet Rose is fine with it. Tim has worked hard over the years and he's never asked for much for himself so Rose figures Tim is entitled to this.

In the summer of 2006 Tim brings Rose down to the Narragansett beach house and treats her like a queen almost every weekend. Rose adds a homey touch to the place with decorations and some splattered paint designs and pictures and Tim likes the place even more.

In 2007 cutbacks cause Tim to be demoted and he has to take a pay cut as the bosses son takes over his position. Tim is very depressed and his work is slumping off. Rose tries to talk to Tim and help him see the bright side of things. Tim continues to get depressed and starts buying things for himself, thinking this will make him feel better. Rose starts seeing the checkbook balance drop drastically and she mentions it to Tim that he can't keep spending on all these little things and that they aren't going to make him feel better.

In the late spring of 2007, Tim enters the driveway of their Cranston Home driving a new 2007 Harley Davidson Motorcycle. Tim is all excited. Rose is petrified but keeps calm. Tim has her come out and look at the motorcycle and he points out all the extras that he had put on before he drove it home. Rose asks him how he paid for it. Tim tells her not to worry that he took out a mortgage on the Narragansett Beach House and financed the whole thing. Rose is upset and walks inside. Tim pursues her because he wants to know what's wrong. Rose explains that she doesn't think it's right that he made such a large purchase without discussing it with her first and that she wouldn't have agreed that a mortgage should be taken on the Narragansett Beach House which had been paid off.

Tim tells Rose that he doesn't care. It's HIS beach house and he took the mortgage out in HIS name to buy HIS new motorcycle so she has nothing to say about it. Rose leaves the room crying.

Over the next several month Tim continues doing whatever he wants and begins using the funds in their joint account which is used for bills. Finally Rose cannot take Tim's financial infidelity anymore and she files for divorce.

Rose requests relief from the Rhode Island Divorce Court by asking for, among other things, half (1/2) the equity in the Cranston house after it is sold, half (1/2) the personal belongings, half (1/2) the equity in the Narragansett beach house and half (1/2) the value of the motorcycle and accessories after they are sold.

Tim files a counterclaim for divorce asking that he be awarded 90% of the equity in the Cranston home, the Narragansett Beach House, the Harley Davidson Motorcycle and 50% of their mortgage debt.

What questions will arise when the Rhode Island Family Court Judge scrutinizes these requests?

Does Rose have any claim to the Harley Davidson Motorcycle?

Does Tim have a valid claim that Rose should pay half of the debt when he made 90% of the income?

Does Rose have any right at all to make a claim to the Narragansett Beach house?

If the Narragansett Beach mortgage is only in Tim's name, does the Rhode Island Divorce Court have the power to add Rose to the mortgage if the Judge determines Rose has to pay a portion of that mortgage?

Is Tim stuck with the Narragansett Beach house mortgage but only half it's equity no matter what happens?

Since Tim took out the mortgage on the Narragansett Beach house to buy his motorcycle without Rose's knowledge, can that particular mortgage be considered a marital debt at all?

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

Attorney Pearsall's practice is focused almost exclusively in the areas of Divorce and Family law.

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