One of the most stressful life events that one can go through is a divorce. There are many issues and pitfalls to be aware of as one goes through the process but there’s one big one relating to real estate that we’d like to bring to your attention.
When the parties are deciding how to divide the assets and liabilities if there is a home or real estate involved there may also be a mortgage and promissory note. Sometimes, the parties overlook the issues of divorces and mortgages. The mortgage and promissory note may have both names on it and legally obligate both parties to make the payments regardless of the titling of the property. Each of you is going to be jointly and severally liable which means that you are each individually held liable and responsible for making timely payment. If the payment is not made in a timely and in the full amount due, each party will have their credit affected by that payment or lack thereof.
We recently spoke to a prospective buyer who had divorced several years ago but failed to have his former spouse refinance the former marital home at the time of their divorce. He didn’t realize that just because he quitclaimed the house to her that he would still be liable to the bank for the mortgage. Due to this obligation still appearing on his credit and that his former spouse was delinquent in making payments, he was not able to purchase a new home and move forward with creating equity and getting the tax write offs that come with home ownership.
We’ve helped numerous homeowners who are going through divorces to sell their properties, pay off their obligations and move on with their lives. If you or someone you know is going through a divorce and needs to sell their real estate or find out what it’s worth, please have them give us a call.
