Financial Planning & Divorce

Old Marital Debt - I signed over the marital house to my ex-spouse. As I try to get a new mortgage and a car loan, I find that lenders still see my old mortgage as my debt. What can I do?

Since the mortgage company was not a part of your divorce, they are less interested in the ownership of the house than who signed the commitment to repay the house loan. Since you and your spouse purchased the house during your marriage, you each became personally liable for the entire debt. (Property owed by the “entireties" means that you each own the entire property and are liable for the entire debt associated with the property.) Even if your divorce decree says that your spouse will payoff the mortgage, the mortgage company does not need to abide by your divorce decree since the mortgage company was not a party to your divorce. To be relieved of these responsibilities you must contact the lending institution and request that you be removed. You will need to show that your ex-spouse can carry the payments alone. You will find this much easier with your ex-spouse’s help.

Spouse's House and Marital Property - When I married, my husband owned a house. My husband and I refinanced the house. The mortgage company did not require a deed change. Now we are considering a divorce. Will this now be considered marital property?

You should consult an attorney & bring the relevant documents to get an accurate assessment. However, in general, you should be aware that the mortgage company would consider the debt you took on when the house was refinanced as your debt, regardless of the name on the deed. Since your husband did not add your name to the deed, it will require a careful examination of the circumstances. However, it is likely that you may be able to claim a share of any increase in the value of the home during the marriage as marital property. Keep in mind that (as in the previous question and answer) you are likely to still have the debt regardless of the court's decision on the issue of marital property.

Last Date of Legal Review 01/17/08 (PLL/M.A.J.)