Q: I live in Minnesota and my ex-husband and I co-own a cabin, without a mortgage. Per our divorce he had 2 years to sell this cabin and pay me my half (approx. $125K). The time is up this month, and he claims he doesn't have the money to pay me. The cabin is currently for sale (at $316K), but he's picky about accepting offers. Can he take out a loan against this paid-off cabin and pay me my half?
A: You have the leverage here, not him. Yes, he could use the cabin as collateral for a loan to pay you off. You would have to agree to deliver a quit claim deed to the title company that would be issuing the mortgagee policy to the lender, but you would deliver this to be held in escrow by the title company to be delivered at the closing of the loan closing upon funding of the amount due you.
If he does not agree to this or is not accepting reasonable offers to buy this property, you can force a sale of the property by filing a suit for partition. The result of that suit will be that the court will order the property sold under and pursuant to court supervision and the proceeds divided. The reality is that in most cases, once he knows this is your plan if he doesn't get a loan or agree to a reasonably purchase offer, he's likely to do one or the other to resolve this without going through the suit.
-- Answer from Richard T., a lawyer on JustAnswer.
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