Avoid The Mortgage [Trap] If Getting a Divorce (2024)

FAQs

Can my spouse stop paying the mortgage during a divorce? ›

Even if one person doesn't want to or can't pay the mortgage, both people are likely still on the hook for the debt. The lender can often come after either person for the full amount of the existing mortgage, no matter who is named on the mortgage.

The first thing you must determine when determining who gets the house in a California divorce is whether the house is community property or shared property. In California, divorcing spouses usually split community property evenly. However, each spouse can generally keep their separate property.

If you're keeping the home and you don't have enough cash to buy out your ex-spouse's share, you'll need to use the home's equity for a “divorce and mortgage” buyout agreement. A home equity loan or HELOC could access your equity without refinancing the first mortgage.

This is known as a breach of contract claim. Your ex agreed to pay a certain amount of money towards the mortgage, and if they are not doing so, they are in breach of that contract. A breach of contract claim can lead to a court order requiring your ex to pay what they owe.

How can I protect myself from being responsible for the mortgage if my ex-spouse fails to make payments? This unpleasant possibility means contacting your divorce attorney, as well as pleading your case to your mortgage servicer and possibly to the judge in your divorce.

It may be possible to take a person's name off your mortgage documents without refinancing. Ask your mortgage lender about loan assumption and loan modification. Either strategy can remove a former co-owner's name from the mortgage.

Moving Out Can Affect Spousal Support Payments

In some cases, temporary orders compel you to continue paying during the divorce. It's common to have to cover your share month to month, even if you live elsewhere. This also often sets a negative precedent when it comes to spousal support.

Men Often Experience a Loss of Identity

They form a critical part of our lives. But when a divorce happens, men lose most of it – the spouse, the children, the familial bond, and the happiness. The custody of the children is often given to the mother, while the father only gets the visitation rights.

Until you have a court order, any property or debt from your marriage still belongs to both of you. This is true no matter who is using it or who has it with them. The same is true of debts.

Does It Matter Whose Name Is on the Mortgage in a Divorce? While the name on the mortgage can influence who is responsible for the debt, it doesn't necessarily dictate how the property is divided.

What happens if a spouse cannot refinance after divorce? ›

Both spouses remain liable to the lender. In addition to the risk of the ex-spouse defaulting on the loan, the liability for that loan will remain on the other spouse's credit report making it difficult if not impossible to obtain financing for another home.

The Loan Assumption Process is Time Consuming

The approval process is often lengthy, and your lender might require a new loan title policy. A new loan title policy would require a title company to research your property and obtain approval from their underwriters, extending the timeline further.

The bottom line is that your soon-to-be ex remains just as financially responsible for your shared mortgage as he or she was before (even if only you are living there while your divorce is pending).

One of the most common ways to get your name off the mortgage after divorce is to have your ex-spouse refinance the mortgage. This means, essentially, taking out a new mortgage and using those funds to pay off the old mortgage balance.

If Your Spouse Isn't Paying the Mortgage

The bottom line is that your soon-to-be ex remains just as financially responsible for your shared mortgage as he or she was before (even if only you are living there while your divorce is pending).

If you took out the mortgage when you were married, this is considered joint or marital debt. As such, the mortgage will be split between you and your spouse, as California law has ruled both parties are entitled to an even split of marital assets and debts.

If the couple cannot agree on who stays in the home, a judge will decide based on property division laws. California is a community property state, which means that anything the couple acquired during the marriage belongs to both equally.