Dividing financial assets and liabilities during a divorce can be a complicated process. That is even more so, if the couple involved owns a mortgage. This is a very common situation in the United States where house ownership is a beloved dream. However, when a marriage goes sour, it is important to determine who is responsible for the mortgage payments, and who will retain the house.
If you and your spouse own a mortgage on your home, you must first determine who is responsible for paying off the mortgage. If both you and your spouse have jointly signed the promissory note and the mortgage, both will be jointly responsible for paying off the market. However, if only you signed the mortgage and the promissory note, then you are the only one responsible for repaying the mortgage. If there is any kind of deficiency after the foreclosure, you’re the only person the bank will go after.
If you have established that you will continue to live in the home, and will continue to pay the mortgage, you can either assume the loan, or refinance the loan so that it is in your name only. In such cases, you will resolve your spouse of any liability for the mortgage payments. If you want to retain the house as part of your divorce settlement, then you would assume the mortgage, and will also take over responsibility for loan payments.
If you are currently making mortgage loan payments, then your situation is precarious, because any failures to make payments leading to foreclosure of your home could negatively affect your credit scores, even if your spouse is the one who ended up with the house, and was required to make mortgage payments. In other words, if your spouse keeps the house, but stops making mortgage payments, and doesn’t even refinance the loan, you may bear some responsibility for the repayment of the mortgage. Speak to a Colorado divorce lawyer about how your mortgage liability must be divided during the divorce.