Is he required to pay the mortgage if it's not in his name?
In a divorce proceeding, a couple may have to decide what to do with the house that they lived in together. In some cases, a divorce decree may stipulate that one party is responsible for making mortgage payments. This may be the case even if this person’s name isn’t on the mortgage itself. However, only the person who has their name on the loan paperwork will suffer negative credit consequences if the payments aren’t made.
The Mortgage Company Isn’t Bound by a Divorce Decree
It is critical to note that a mortgage contract and a divorce decree are two separate agreements made by two different entities. The mortgage itself is a legal contract while the divorce itself is a civil matter. Therefore, the lender can go after whoever is on the loan regardless of who was supposed to make the payment under the terms of a divorce agreement.
What Recourse Would an Individual Have in This Scenario?
If a former spouse failed to abide by the terms of a divorce decree, it could be possible to seek compensation through mediation or litigation. It could also be possible to have that spouse considered to be in contempt of court. Penalties for being in contempt of a court order include jail time and fines in addition to making past due mortgage payments.
Of course, it is possible that this person doesn’t have any money needed to keep up with the mortgage. Furthermore, a former spouse who has not complied with a court order may continue to ignore it despite the penalties imposed. While assets could be liquidated or wages garnished in some cases, that may or may not occur before a mortgage company chooses to foreclose.
Could the Home Go Into Foreclosure?
Technically, the mortgage company has the right to foreclose on the home after a single missed payment. However, lenders generally don’t take steps to repossess a home until several payments have been missed. This means that you could negotiate a new payment plan to get your loan back to current. It may also be worthwhile to consider filing for bankruptcy to prevent a foreclosure from taking place.
You Could Choose to Make the Payments Yourself
If your former husband doesn’t make payments like he is supposed to, you could always assume them yourself. In addition to preserving your credit, it may provide leverage to get something else of value in exchange. For instance, you could propose that your former spouse give up a larger portion of his 401k instead of making future mortgage payments. You could also ask for more alimony each month to help make up for the extra expense.
Consider Selling the Home
As a general rule, women tend to prefer to keep the marital home because it provides a sense of stability in an otherwise chaotic time in their lives. In some cases, they choose to keep the family home because they want to provide stability for their children. However, it is important to know that a home may be more expensive than it is worth to keep over the long-term.
In addition to the mortgage payment, you have to pay for insurance and property taxes. You may also need to pay someone to mow the lawn, plow the driveway or fix a leaking faucet. Utilities such as light and heat will also cost money that may be better used building up an emergency fund or a retirement account.
If you decide that making the mortgage payments isn’t worth it anymore, consider liquidating the property. Assuming that your former husband isn’t making payments, a judge is unlikely to prohibit you from selling your own property. If you do choose to sell, be sure to consult with a real estate agent who can help maximize its sale price.
What If There Is No Court Order Requiring Payment?
In the event that your husband’s name is not on the mortgage, he has no obligation to help pay that debt in the absence of an order to do so. However, he may choose to make payments voluntarily as a means to support any children that he had with you. Be careful that you don’t guilt your former husband into making payments as a condition of seeing his children after a divorce. While you may think that this is a shrewd strategy to get help paying your living expenses, it will put the children in the middle of a fight that they shouldn’t be a part of.
If you have a mortgage in your name only, it is your responsibility to make payments in a timely manner. Even if your husband is required to do so by court order, always have money set aside in case he willfully chooses not to pay or if a financial emergency doesn’t allow him to pay. This can ensure that you retain your positive credit history and that you don’t lose a valuable asset.