Things to Know About Divorce and Mortgage Payments

The largest financial asset as well as the largest debt that most couples have is their marital home. One of the most substantial determinations within a divorce in the state of North Carolina is how a marital home will be divided. Both spouses cannot keep the home, and therefore there are several options available to the parties to divide this significant asset. Contact our competent and knowledgeable attorneys at Arnold & Smith, PLLC to learn what your options are regarding your divorce, your marital home, and mortgage payments during the divorce process.

Whether a couple is getting a divorce or not, the bank will still want to receive payment of the mortgage on marital property. If a marital property was both titled and financed in the name of both spouses, then both spouses continue to be financially responsible for those mortgage payments even if they are going through a divorce. Even if one of the parties left the home during the separation prior to the divorce, if that spouse continues to be listed on the mortgage, then he or she will remain legally responsible for all mortgage payments until that asset is divided in a divorce. If one party refuses to make a payment of the mortgage, then the other will remain responsible for those mortgage payments, regardless of any divorce process.

It is important to note that if you wish to keep the marital home, you should attempt to avoid leaving it at all costs. In some circumstances, depending on the judge, certain courts will not look favorably upon the person who left the marital home, and not award that person with the right to occupy the home following the departure. However, if you are suffering from any kind of physical or emotional abuse from your spouse, you should always seek safety and contact a domestic violence association or law enforcement immediately for your own protection, and the protection of your children.

Depending on the preferences of both parties within a divorce, marital property may be sold, and the equity divided among both parties as determined by the court. Another option would be for one spouse to remain in the home and pay the other spouse half of the equity accumulated during the marriage. If this is the method that both parties choose, then the party deciding to stay in the marital home will have to refinance that property in his or her name. If there are any challenges to this person refinancing the home, the spouses may have to look for other options to divide the property equitably. It is important to note that if one party continues to live in the marital home and has the property refinanced, then that party should remove the other spouse from the title of the property, otherwise the other spouse will still have a legal right of ownership in that property.

If the decision is made to sell the marital home because neither spouse can afford to make the mortgage payments or refinance the house, then each spouse will receive a share of the proceeds as determined by the court. In many cases, a spouse will take these net proceeds and then use them to purchase a new house. However, during the process of the sale of the marital home, both spouses will remain responsible for the mortgage payments. Again, if one spouse fails to pay their share of the mortgage payments even following a divorce, the other spouse will remain responsible unless the house is sold or retitled in someone else's name. It is possible that one spouse’s payment of the mortgage can be recouped in the final division of the assets of the marriage.

The important conclusion is that you will be legally liable for the mortgage payments of a marital home unless a court legally determines otherwise, or until the marital house is sold or refinanced. It is extremely important to have an experienced family law attorney help you determine how best to financially handle all the property division within your divorce, and to ensure that all your legal rights are protected. As an additional note, there are several complicated tax implications that occur with respect to marital property, and how that property is divided as part of the divorce settlement. If you are considering filing for divorce, contact an experienced family law attorney in Mooresville, North Carolina at Arnold & Smith, PLLC at 704.370.2828 or online today for your initial consultation.