Global economic woes impacting property settlements
Posted
Family law experts along the New South Wales mid-north coast say the global economic meltdown is changing the way people dispute property settlements.
Lawyers says clients are starting to argue over the level of mortgage debt rather than the amount of home equity.
The Taree-based president of the Mid North Coast Law Society, James Paton, says in divorces the debt argument can worsen already difficult situations.
"The other issue is that one partner will just stop paying the mortgage, so it puts a lot of stress and strain on the other partner and if they default on their mortgage then financially they're in a very difficult position to refinance or re-borrow," he said.
"If they do want to re-borrow and there's been a mortgage default then they're paying a much higher interest rate. So the whole thing is really very serious."
Mr Paton says falling property values mean many people do not have the sort of financial security they thought they had.
"We see now in property disputes people are actually arguing over debt now because the debts on their houses are just greater than the equity which is a real concern, especially in this area," he said.
"It's something that I've not seen before and I think a lot of other of my colleagues where you're fighting over debt rather than equity which I think is a reflection of the time."
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