On behalf of The Walters Law Group, Ltd. posted in Divorce on Thursday, July 11, 2013.
When a couple files for divorce in Illinois, a common practice that often occurs is for one spouse to sign off on a deed to a house and transfer it to the spouse still living in the home. Although this transfer of property has legally occurred, as far as the mortgage company is concerned, both spouses are still responsible for payment of the mortgage as the lender does not have to remove either spouse’s name from the loan. A divorce decree may specify which spouse will continue to pay the mortgage; however, most lenders don’t care what the divorce decree specifies as long as the loan is up to date.
Legal considerations regarding property division can become sticky following divorce when money problems such as bankruptcy occur for one of the ex-spouses. In the case of the ex-spouse whose name is no longer on the house deed, that individual will no longer be responsible for payment of the mortgage once a bankruptcy filing has occurred.
Divorce legal issues can continue many years down the road after a decree has been finalized. Many issues can be confusing to the average person, particularly when money is involved. As the mortgage example illustrates, what may be legal in divorce court may have many different twists and turns depending on a person’s financial status. A divorce attorney may be able to thoroughly explain complications and options to clients when their personal situations change.
In addition to providing solid legal advice, a family law attorney may be able to help clients modify divorce agreements when extenuating circumstances or other life changes occur. Modifications can be made to alimony payments and child support, and property division issues may be addresssed too.
Source: Fox Business, “How Does Divorce Affect Bankruptcy and Mortgage?“, Justin Harelik, July 03, 2013