Divorce and Foreclosure

Sometimes foreclosure proceedings and divorce proceedings happen simultaneously.  The divorcing couple may not have the money to pay the mortgage and may be going through a foreclosure and a divorce at the same time. Other times, foreclosure begins once the divorce complaint has been filed.  One spouse may be living in the house and the other spouse may have stopped paying the mortgage, for example. 

Common Legal and Financial Questions Associated with Divorce Foreclosure

Couples who are divorced or in the process of getting divorced often have common questions about the effects of foreclosure, such as:

• How Will the Property be Divided?  Typically, the property is divided between the spouses by the Court in a divorce decree.  However, if the property is in foreclosure then the property will likely not be divided because the creditors have the rights to the property.
• Who is Liable for the Property Going into Foreclosure? That depends on whether the couple is still married at the time that the property goes into foreclosure and whose name is on the title of the property.  If the divorce is still pending and the couple is still legally married then both spouses are usually liable for the property that is going into foreclosure even if the title to that property is only in one spouse’s name.  If the divorce has been finalized then liability is usually limited to the name or names on the property deed.  That means that if both spouses bought the property together and remain on the title after divorce then both spouses are liable for the property going into foreclosure, even if only one spouse was living in the home and responsible for the mortgage payments.
• Who’s Credit Will be Hurt by the Foreclosure?  Both spouses should be aware that both of their credit ratings may be hurt by divorce foreclosure if both of them are liable for the property going into foreclosure.

Seeking Legal Help During Divorce Foreclosure

The effects of a foreclosure last for a long time.  Your credit rating can be significantly harmed and your ability to borrow money in the future may be limited.  Accordingly, you should work with a local divorce attorney who has experience in real estate matters so that all of your rights can be protected during a divorce foreclosure.