Divorce and Your Mortgage Payments

Divorces require many legally complex decisions to be made. Some involve child custody, child support calculations, spousal support, and the division of marital property. In most cases, the largest financial asset that spouses have is their marital home. Additionally, this will also likely be their largest financial debt. Mortgage payments need to continue even during the process of a divorce. If you are considering filing for divorce in the state of North Carolina, you may have many questions regarding the division of your marital property, assets, and debts. While both spouses cannot keep a marital home, the law offers many options to equitably divide this significant marital asset.

It is important to note that even though a couple is attempting to obtain a divorce, the process may take a considerable amount of time. During this time, a mortgage lender will expect that mortgage payments will continue to be made regarding the marital home. If both spouses are listed on the mortgage paperwork, then they will both remain legally responsible to make the financial payments regarding the marital home. This is true even if one of the spouses left the marital home during the separation prior to the divorce. If a spouse continues to be listed on the lending paperwork, then that spouse remains responsible financially to pay that mortgage payment every month. Therefore, if one spouse refuses to make a payment on the mortgage, the other spouse will remain fully responsible for that mortgage payment until legally binding decisions are made otherwise by the court. It is important to continue making mortgage payments to preserve the marital asset. Should either party refuse to pay the mortgage, the property could wind up in foreclosure or with significant penalties added to the mortgage debt which in turn results in less value to the marital estate.

In many cases, prior to a divorce, one spouse will leave the marital home during a separation period, or as preparation for a divorce. It is important to note that in some circumstances, depending on the discretion and interpretation of the presiding family court judge, the person leaving the marital home may not have as strong of a right to keep the marital home in the divorce process. This will largely depend on the facts and circumstances of your divorce, the assets that need to be divided in your divorce, as well as the predisposition of your family court judge. As always, if you feel you are in any kind of physical danger, or if your children are in any kind of physical danger, you should always seek the assistance of law enforcement or a domestic violence association, and leave the marital home as soon as possible for your own safety.

When an equitable distribution judgment is granted or a settlement reached, all decisions regarding the division of marital property will be included within that judgment or settlement. Depending on your facts and circumstances, the marital property may be sold outright and the assets divided equitably among both spouses, or one spouse can stay in the home and pay the other spouse a share as the equity accumulated in the property. However, the spouse who is staying in the marital home would have to have the financial ability to not only pay the mortgage payments independently, but also be able to refinance the entire marital property solely in his or her name. If the spouse has the ability to financially handle the mortgage payments as well as refinance the property, then he or she would repay the other spouse a share of the equity in the home, and then remove the other spouse from the title of the property. Removing your spouse from the title of the property allows you maintain the full ownership interest in the marital home. Therefore, it is extremely important to remove the other spouse as soon as possible following a final judgment or settlement if you received the right to refinance the marital home in your own name.

At the end of the day, you may be legally liable for all mortgage payments on a marital home unless the marital house is sold outright or refinanced under one spouse's name. It is critical to have an experienced family law attorney assist you through this process and give you advice regarding how to best financially handle the division of all property and assets within your divorce. Ensure that your legal rights are protected by contacting an experienced family law attorney in Charlotte, North Carolina at Arnold & Smith, PLLC at 704.370.2828 or online today for your initial consultation.