Q My husband and I decided to divorce after 20 years. We have been working well on our own and agreeing to most things, including the sale of our house in Dover. We are supposed to close next week and equally share the proceeds. I just got a copy of the settlement statement from the real estate lawyer. I was shocked to see we have a mortgage and a home equity loan. I knew about the mortgage but not the loan. I went to the bank and got a copy of the HELOC documents. The signature above my name is not my signature. I am angry and starting to question what else he has lied about.
I still want to sell the house, but I don’t think I should have to pay the $200,000 HELOC. What do you recommend?
A Presumably your husband also wants the sale to go through. Ask him if he will agree to have the real estate lawyer hold the net sale proceeds in escrow for now while you look into this HELOC issue. If he says no, ask the real estate lawyer to hold the net sale proceeds in escrow over your husband’s objection while you hire a divorce lawyer and obtain emergency orders. If the real estate lawyer will not agree, you can refuse to close. It is unlikely your husband will allow the deal to fall apart over a delay in his receipt of his share of the sale proceeds.
Then you need to hire a qualified divorce lawyer to file a complaint for divorce and an emergency motion to escrow the net sale proceeds from the sale of your house. Your lawyer should issue a subpoena to the bank for all documents relating to the HELOC, including the loan application and all statements showing what the HELOC was used for.
Generally in a divorce, both assets and liabilities are divided equitably, in a long-term marriage, often means equally. However, if this HELOC was taken out without your knowledge, with your name being forged to the documents and the funds used for some purpose about which you had no knowledge, you have a solid argument that your husband should be responsible for all of the debt associated with that loan.
Now that you have a sense of what he is capable of, make sure all discovery is done formally. Your lawyer will be able to ask for all kinds of information from your husband so that you can test his veracity in other areas. You may still be able to settle amicably, but there has to be clear transparency on both sides. He needs to regain your trust.
If you have to let this sale fall apart to protect yourself, there will be another buyer out there. Losing this sale is a small price to pay for your piece of mind.