Hello,I am about to file for a divorce in New Jersey. Due to dire financial circumstances, I am contemplating on taking a large from either ...

Question

Hello,

I am about to file for a divorce in New Jersey. Due to dire financial circumstances, I am contemplating on taking a large from either a friend or a family member loan using my primary residence as a collateral.

In a divorce proceedings and, in particular, the equitable distribution of the property aspect, will this loan be subtracted from the common property value before the division is set forth or taken out of my share after the property distribution is made? Could this act be rendered as encumbering a common property and, if yes, are there any regulations pertaining to such matters? Would I be required to present the court with the loan's allocation or a detailed schedule of the sums spent or would the entire amount be subtracted off the home's sale price? Thank you.

Answer

First of all, I question the wisdom of borrowing money to attempt to resolve dire financial circumstances. In general, it doesn't work. That being said, if you are borrowing money with the thought that you will be able to put a lien on jointly owned property, the lender will be asking your spouse to join in that loan to properly secure the loan. If it is not a lien on joint property, then the debt will be unsecured unless attached to property that you own alone. And in any divorce proceeding, your spouse's lawyer will absolutely attempt to attach the loan to you alone and make it your sole obligation. You will be seriously complicating your divorce proceedings.

Keep in mind that this answer is given based on the scanty information you have provided. My answer may change based on other information. Further, you cannot rely on this answer since you have not retained me as your attorney. To be sure that you have accurate information and direction, you should consult with a Family Law attorney. Feel free to call me at 856-546-8010. Mention Law Guru and your first consultation will be "no charge". Good luck. Rob Gleaner

Answer

Iagree with Mr. Gleaner. Seems like you are trying to do this without a lawyer which is almost always a bad idea.