Short Sales: When Proceeds Are Insufficient To Pay Off The Mortgage

After divorce, it is common for the parties to agree to sell their marital home, or it may be ordered by the Court.  It is also common for one party to keep the home, and "buy out" the other spouse for their share of the equity.  In the current market however, sometimes this is not possible, and the value of the home is such that a sale will not bring enough proceeds to cover the outstandig mortgages.  In this situation, divorcing spouses may have no choice but to consider a short sale.  The following article, recently posted on the New Jersey Law Blog, explains a short sale, and the possible benefits and risks.

A short sale is when the proceeds from the sale of a home are not sufficient to fully pay off all outstanding debts which are secured by the property (mortgages) after first deducting the homeowner’s costs of selling the property.  In such instances, the selling homeowner can either bring funds to closing to make up the difference, or obtain approval from his mortgage holders to accept a reduced amount to satisfy his outstanding loans. 


Unless a homeowner is able to pay off all of the mortgages which are secured by his property, the homeowner will not be able to convey good title to a buyer.  If the homeowner is unable to obtain a sales price which enables him to pay off all loans and closing costs, and he does not have the funds to make up the difference, then he may want to try to obtain approval from his current lender(s) to accept an amount less than the full amount due on its mortgage.  For a lender, this may be acceptable to obtain repayment of a substantial amount of its loan and to avoid the costs and delay of foreclosing on the loan.  This will generally mean that the Seller will not receive any funds from the sale of his home.


In order to obtain such approval from a lender - which may or may not be granted - the homeowner needs to contact his lender(s) to determine what information they will need to make their decision.  This usually includes a financial statement of the homeowner, copy of a contract of sale, appraisal, and other pertinent documents.  Generally, a lender will not consider approving a short sale without a clear economic hardship on the part of the homeowner and an existing default or pending foreclosure.


Until recently, forgiveness of a debt under these circumstances, could trigger a taxable event according to the IRS.  This means that if a lender forgave a part of the mortgage debt by accepting a reduced amount in full satisfaction of the loan, then the amount forgiven could be deemed taxable income to the homeowner.  This was so even though the homeowner received nothing from the sale.  However, in December 2007 Congress passed the Mortgage Forgiveness Debt Relief Act of 2007.  This Act amends the Internal Revenue Code to exclude from gross income amounts attributed to a discharge of indebtedness incurred to acquire a homeowner’s principle residence.  The amount of the debt forgiveness can be up to $2.0 million.  Thus, a homeowner is now able to sell his home for less than what is owed on it without incurring an additional tax liability.   This exemption for forgiven debt, however, is only temporary and expires within three years.

Source for Post: New Jersey Law Blog

Should Your Child Have a "Gap Year" Before College

Princeton encourages it. Harvard’s a big fan. From Tufts to MIT, some of the most prestigious universities in the nation are urging students to consider something that would make most parents cringe: The idea of putting off college for a year in favor of some much-needed down-time. 

It’s called a “gap year.” And while it’s been a common and popular rite of passage in Australia and the U.K. for decades, the concept is now starting to gain significant steam here in America.

Why? A growing number of high school seniors are balking at riding the academic conveyer belt from preschool, all the way to university. They’re burnt out. Or not quite ready. Or they want to explore a few interests before deciding what to study in college. So instead of packing their bags in anticipation of freshman year, they’re volunteering in New Orleans or teaching in Thailand. They’re starting the great American novel, or interning to help figure out what they want to do with their lives.

Continue Reading...

Recent Family Law Rulings From the Missouri Court Of Appeals

Circuit Court May Depart From Recommendations On Physical Custody
Guardian ad litem and court-appointed therapist both recommended joint legal custody and supervised visitation for Father. Circuit Court followed the former but not the latter. When evidence supports an alternative award, “the trial court is not bound by the requests of any party as to custody or visitation, even when both parties agree.” No judgment required Father to pay child support and Mother forgave some of it, so Circuit Court did not abuse its discretion in awarding no retroactive child support.
In re the Matter of L.J.S., by A.C.H., as next friend, and A.C.H., individually, Petitioner-Respondent, v. F.R.S., Respondent-Appellant. Missouri Court of Appeals Southern District

Circuit Court Must Decide Contempt Action
Upon dismissal of motion to modify custody, guardian ad litem was discharged, and testified only as to fees, mooting motion to remove guardian. Circuit Court issued an order that Father show cause why he should not be held in contempt for failure to pay child support. Circuit Court consolidated contempt action with child support modification action for all purposes, giving notice to Father, so that Circuit Court's failure to rule on it did not result in loss of jurisdiction. Circuit Court must decide it. Record supported Circuit Court's findings as to parties' relative income.
Angela Shapiro McCoy, Appellant v. Samuel Scavuzzo, Respondent. Missouri Court of Appeals Western District

 Findings Show Grounds For Termination Of Parental Rights
Presence of findings related to abuse shows that parental unfitness was not the sole grounds for termination of parental rights. Past abuse and lack of present reform raise presumption of future threat to Child's future.
In the Interest of: K.R.G., A.K.G., and R.C.G., C.G., Appellant v. The Christian County Juvenile Office, Respondent. Missouri Court of Appeals Southern District

Objection To Relocation Waived
Statute requires notice before permanently relocating children's residence. After temporary relocations, Mother gave notice of intention to permanently relocate as required by statute. Father did not file objection as required by statute and so waived objection.
Gina M. Dent, Petitioner/Respondent v. Charles W. Dent, Respondent/Appellant. Missouri Court of Appeals Eastern District

Source for Post:  The Missouri Bar

A Dozen Ways Children Of Divorce Get Caught In Their Parents' Conflict Part 3 of 3 (9-12)

Every divorcing parent should make it their top priority to keep their children from getting caught in the middle of the conflict of their divorce.  The following is the third installment of tips and thoughts are from James Roberts, RSW, a licensed social worker  in Missouri and Kansas and family therapist in Kansas.  Mr. Roberts practices with Madison Avenue Psychological Services in Kansas City Missouri.  

9.     Child Abuse Allegations

It is becoming common for conflicting parents to express their hostilities by making unfounded allegations of child abuse.  For children the consequences of these allegations are negative and far-reaching.  Children are drawn into evaluations, investigations, and court testimony which greatly increase the risk of prolonged confusion, hurt, and anger.

10.     Custody Fights

Some parents pursue custody fights when they know perfectly well that the real reason for the custody action is to be vindictive.  Children experience custody battles between their parents as extremely stressful.

11.     Child Support

Parents too often use child support by withholding it, demanding more, or making payments late when the real motivation is to perpetuate a dispute with the former spouse.  In many homes children suffer directly when child support payments are not made regularly or when conflict is expressed indirectly in this way.

12.     Using Noble Ideas to Hide Double Standards

A custodial parent might say "i want her to make her own decisions" when a child refused to visit the non-custodial parent but strictly enforce curfews when the same child wants to stay out late.  A custodial parent might say "He has the right to his own feelings" if a child says critical things about his non-custodial parent but lecture and browbeat the same child for "talking back" at home.  Children are sensitive to inconsistencies.  They react to them with mistrust and cynicism.

A Dozen Ways Children of Divorce Get Caught In Their parents' Conflict: Part 2 (5-8)

Every divorcing parent should make it their top priority to keep their children from getting caught in the middle of the conflict of their divorce.  The following is the second installment of tips and thoughts are from James Roberts, RSW, a licensed social worker  in Missouri and Kansas and family therapist in Kansas.  Mr. Roberts practices with Madison Avenue Psychological Services in Kansas City Missouri.  See the March10 post below for tips 1-4.

5.     Sabotaging the Child's Routine

When parents fail to give a child medication, fail to follow through on discipline imposed by the other parent, or bend rules on bed-time, diet, or curfews out of anger for the other parent, they are involving the child in parental conflicts.  conflicted parents frequently take their children to medical professionals without consulting the other parents as a way of acting out unresolved divorce disputes.  This practice places parental conflict above the child's medical well-being.

6.     Compensating for the Other Parent's Failures

One divorced parent may view the other parent as a poor parent for being "too lenient", "too strict", "too involved", or "not involved enough".  Such parents often try to compensate for the other parent's "failures' by being the opposite kind of parent.  Children in such situations suffer by not having parents who are using a balanced approach to rearing children.

7.     Making a Popularity Contest of Parenthood

A parent may try to win the affection of a child out of fear that the child favors the other parent.  such parents go overboard to "be nice" or refrain from being firm with their children. Children suffer in these situations by not having the advantage of a parent who is acting in the proper role of authority figure.

8.     Being an Accomplice to Whining

A parent may allow a child to complain about the other parents without helping the child see a more balanced view of the other parent.  If the parents either passively accepts the complaint or fails to urge the children to take up these grievances with the other parent they subtly encourage children to use indirect communication as a way of managing conflict.

The remaining 4 tips will appear in a future post

Source for Post:  James Roberts, RSW and the Kansas City Metropolitan Bar Association

Case Law Update: Premature Investigation and Study Require Dismissal

Premature Investigation And Study Require Dismissal
Statute requires Circuit Court to order investigation and social service study after filing of petition to terminate parental rights. Circuit Court ordered investigation and social service study before filing of petition to terminate parental rights. Mother need show no prejudice for Court of Appeals to reverse judgment and remand for further proceedings.
In the Interest of: N.A.H. (D.O.B: 04-21-04) A Child Under Seventeen Years of Age. Missouri Court of Appeals Southern District

Source for Post:  Missouri Bar

A Dozen Ways Children Of Divorce Get Caught In Their Parents' Conflict - Part 1 (1-4)

Every divorcing parent should make it their top priority to keep their children from getting caught in the middle of the conflict of their divorce.  The following tips and thoughts are from James Roberts, RSW, a licensed social worker  in Missouri and Kansas and family therapist in Kansas.  Mr. Roberts practices with Madison Avenue Psychological Services in Kansas City Missouri.

Parents who are either in the middle of a divorce, thinking about divorce, or already divorced should pay careful attention to the following ways that parents put their children directly in the middle of the conflict, and do their best to avoid them!

1.     Bad Mouthing

One of the most hurtful things a divorce parent can do to a child is to criticize the child's other parent in the child's presence.  Statements such as "Your father caused our divorce", or "if it weren't for your mother, we'd still be a family," are common examples of "bad-mouthing"

2.     Forcing a Child To Choose

It is harmful to pressure a child to "take sides" in a dispute between the divorced parents.  Children have a right to their own thoughts and feelings about the divorce and deserve to know they will be loved by both parents regardless of the opinions and feelings they have.  If parents are in conflict over custody and children are facing a decision about which home to live in outside professionals should be called upon for help.

3.     Spying

A parent who asks a child questions about the other parent's personal life is asking that child to become involved in the parents' conflicts.  Children in this situation may end up feeling they have betrayed a parent they love.

4.     Making the Child the Messenger

Parents make their children do a parent's job when they ask their children to carry messages to the other parent.  Children learn indirect ways to communicate when asked to be messengers and may feel guilt over having to assume adult responsibilities for their parents' communication

The remainder of James Robert's list will be posted to this blog in two future articles.

Missouri Courts Bulletin: Family Case Law Update

From The Missouri Bar
Editor:
  John W. Dennis, Jr., Esquire

Paternity: Change of surname/meeting burden of proof. Warren Joshua Wright, Respondent v. Anden Richard Buttercase by his next friend, Heather Ladawn Buttercase, and Heather Ladawn Buttercase, Appellants, No. 67861 (Mo. App. W.D., January 15, 2008), Lowenstein, J.
  
This child was born out of wedlock and given his mother's surname. In this action to establish paternity, custody and support, the trial court also ordered the child's surname changed to that of father. Mother appealed.
  Held: Affirmed. It is axiomatic that the party seeking to change the child's surname has the burden of proving that the change is in the child's best interest. Neither parent's name is presumed preferable to the other.
  The factors: (a) the child's age – here the child is too young to know the difference; (b) potential embarrassment or discomfort of the child in a change – here, the child is too young to know and is not in school, so no change will result in confusion, embarrassment or discomfort; and, (c) how the name change will affect the child's relationship with his parents. Father here testified that he was trying to build a relationship with the child. In addition, “every” child in the community had his father's surname and a change would help the child identify with the father's family. The trial court concluded that, given those circumstances, the child would be more likely to feel accepted by father if they shared a last name. Moreover, the child was so young that the change of surname would not affect his relationship with his mother.
  The foregoing was found to be substantial evidence to support the trial court's decision.
  Editor's Note: Although this case may be fact specific in relation to the outcome, it is instructive, in that there are outside factors to look for beyond a parent's motivation for seeking a name change for his/her child.

Child Support and College grades: Adequacy of notice. James Waddington, Petitioner/Appellant/Cross-Respondent v. Maureen (Waddington) Cox, Respondent/Cross-Appellant, No. 88992 (Mo. App. E.D., January 2, 2008), Shaw, J.
  
The parties were divorced in 1996. The parties' son was placed in the “primary” care of father, and mother was ordered to pay child support of $378 per month. In October, 2000, son went off to college. He provided mother with the university's letter of conditional acceptance. Throughout his college career, the child provided mother with notice of his grades via an on-line access service the university provided to its students. Mother did not pay child support. Eventually, father sought enforcement of the child support judgment. Mother claimed the notice of son's grades was inadequate because the on-line printout was not an official transcript. The trial court agreed. Father appealed.
  Held: Reversed. This is a case of first impression in Missouri. Section 452.340.5 RSMo requires the child to provide each parent with a “transcript or similar official document” from the institution showing grades, courses and credits earned. There is no question that the records provided to mother were not official transcripts.
  “Given the varying definitions and the ubiquity and security of online student records systems similar to [the one provided here], this Court declines to speculate whether the legislature assumed that a 'transcript' is inherently official or considered the possible implications of such an assumption in a case like the one before us. We can only observe that the legislature did not include the word 'official' before transcript. As such, 'official' only modifies the word 'document.' To interpret the statute to require an official transcript would be to add qualifying language where it does not exist.”
  “Missouri courts liberally construe section 452.340.5 to be consistent with the public policy of promoting the pursuit of higher education. Mandel v. Eagleton, 90 S.W.3d 527,531 (Mo. App. E.D. 2002) (internal citations omitted). “Therefore, we conclude that a parent's obligation to provide financial support to a child in college should not terminate merely for lack of an official stamp, where, as here, substantial evidence demonstrates that the parent received actual notice in the form of an inalterable online transcript containing all the information required by the statute.”

Abandonment Shown In Termination of Parental Rights Case: Case Summary and Law

Record supports findings that Father could have supported and contacted Child but did not do so, that he did not repent of his conduct, and that his present and future conduct would be no different.
In the Matter of E.F.B.D. W.H. and K.H., Petitioners-Respondents, v. S.B., Respondent-Appellant. Missouri Court of Appeals Southern District

(Father) appeals from a judgment terminating his parental rights to E.F.B.D.(FN1) Father's parental rights were terminated on the ground of abandonment pursuant to Section 211.447.4(1)(b).(FN2) On appeal, Father contends there was insufficient evidence to prove this statutory ground for termination. Alternatively, he contends there was sufficient evidence to show that he repented of his abandonment of E.F.B.D. The Court affirms.

Law Pertaining to Termination of Parental Rights
To terminate parental rights, a trial court must use a two-step analysis. In re S.J.H., 124 S.W.3d 63, 66 (Mo. App. 2004). In the first step, the court must find by clear, cogent and convincing evidence that one or more statutory grounds for termination exist. Section 211.447.5; In re P.L.O., 131 S.W.3d 782, 788 (Mo. banc 2004). "Clear, cogent, and convincing evidence is evidence that instantly tilts the scales in favor of termination when weighed against the evidence in opposition and the finder of fact is left with the abiding conviction that the evidence is true." In re S.M.H., 160 S.W.3d 355, 362 (Mo. banc 2005). This standard of proof may be satisfied even though the court has contrary evidence before it or the evidence might support a different conclusion. In re Adoption of W.B.L., 681 S.W.2d 452, 454 (Mo. banc 1984); In re A.K.F., 164 S.W.3d 149, 151 (Mo. App. 2005). After finding one or more statutory grounds for termination have been proven, the trial court then moves to the second step and must determine, by a preponderance of the evidence, whether the termination of parental rights is in the child's best interest. Section 211.447.5; P.L.O., 131 S.W.3d at 789; S.J.H., 124 S.W.3d at 66.

Abandonment in Missouri

Section 211.447.4(1)(b). In relevant part, this subsection states that "[t]he court shall find that the child has been abandoned if, for a period of six months or longer … (b) The parent has, without good cause, left the child without any provision for parental support and without making arrangements to visit or communicate with the child, although able to do so[.]" Id.; see In re J.M.S., 83 S.W.3d 76, 82 (Mo. App. 2002). Abandonment has been defined as either "a voluntary and intentional relinquishment of the custody of the child to another, with the intent to never again claim the rights of a parent or perform the duties of a parent; or ... an intentional withholding from the child, without just cause or excuse, by the parent, of his presence, his care, his love, and his protection, maintenance, and the opportunity for the display of filial affection." In re Watson's Adoption, 195 S.W.2d 331, 336 (Mo. App. 1946); see In re P.G.M., 149 S.W.3d 507, 514 (Mo. App. 2004). This largely presents an issue of intent, which is inferred from the parent's conduct. In re P.L.O., 131 S.W.3d 782, 789 (Mo. banc 2004); P.G.M., 149 S.W.3d at 514. Evidence of the parent's conduct both before and after the requisite six-month period may be considered. In re J.B.D., 151 S.W.3d 885, 888 (Mo. App. 2004). However, "[o]nly the parent's conduct prior to the filing of the petition for termination may be considered to establish the six-month period." Id.

Case Law Update: Award of Maintenance (Alimony) Upheld

Case Summary:
Past standard of living is not the standard for setting maintenance, but Wife showed that she can not meet her reasonable needs by working presently or in the future because of poor health and limited education. Circuit Court awarded proper amount, but used wrong term, in awarding maintenance, so Court of Appeals amends judgment to use right term. Substantial evidence supports imputation of income to Husband and award of attorney fees against him.
In re the Marriage of Debbie Lynn Taylor and Willie James Taylor, Debbie Lynn Taylor, Petitioner-Respondent, v. Willie James Taylor, Respondent-Appellant. Missouri Court of Appeals Southern District

Missouri Law pertaining to Awards of Maintenance (Alimony)
The trial court can award maintenance only if it finds that the party seeking maintenance "(1) Lacks sufficient property, including marital property apportioned to him, to provide for his reasonable needs; and (2) Is unable to support himself through appropriate employment[.]" Section 452.335.1.This section requires the trial court to follow a two-part threshold test. The court must initially determine if the requesting party has sufficient property to meet his or her reasonable needs, and if they do not, then the court must examine whether or not the party's reasonable needs can be met through appropriate employment.  Childers v. Childers,26 S.W.3d 851, 854 (Mo.App.W.D. 2000). The spouse seeking maintenance has the burden of establishing the threshold requirements. Comninellis v. Comninellis, 147 S.W.3d 102, 106 (Mo.App.W.D. 2004). After the court finds the threshold test has been satisfied, then the court may consider the statutory factors under Section 452.335.2 with respect to amounts and duration. Monsees v. Monsees, 908 S.W.2d 812, 817 (Mo.App.W.D. 1995).

In this case, Wife established that (1) she lacked sufficient property, including marital property apportioned to her during the dissolution, to meet her reasonable needs; and (2) that she is unable to support herself through appropriate employment.

Under Section 452.335.2, the court, in determining the amount and duration of a maintenance award, may consider all relevant factors including:

      The financial resources of the party seeking maintenance, including marital property apportioned to him, and his ability to meet his needs independently[;]
      The time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
      The comparative earning capacity of each spouse;
      The standard of living established during the marriage;
      The obligations and assets, including the marital property apportioned to him and the separate property of each party;
      The duration of the marriage;
      The age, and the physical and emotional condition of the spouse seeking maintenance;
      The ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance;
      The conduct of the parties during the marriage; and
      (10) Any other relevant factors.