Property division can be a complicated process during divorce. A lot goes into deciding which, if any, spouse gets the house and how the other spouse is compensated. Adding concerns about the house going into foreclosure can make property division even more difficult.
There are a lot of important things that you should consider if your house is in foreclosure during the divorce proceedings or if you think your home is in foreclosure. An experienced divorce attorney can help explain everything you should look out for if your house is in foreclosure during a divorce.
Joshua Denbeaux is an experienced New Jersey foreclosure attorney committed to fighting for consumer rights. Contact us today to learn more about how we might be able to help you.
Property Division in Divorce
In typical divorce proceedings, any property or assets are divided between the spouses. It is always intended for property and assets to be divided as equally as possible between divorcing spouses.
A home is often a major asset to be divided in a divorce. During the divorce proceedings, it must be decided which spouse gets to keep the house and how much property the other spouse will receive for giving up interest in an asset.
In most divorces, a home is considered an asset because it is a place to live that could be sold in the future if needed. Homeownership may sometimes be viewed as a liability rather than an asset. If the couple is already behind on mortgage payments or if it would be difficult to keep the home out of foreclosure on one spouse’s salary, it may be less appealing to be the home’s sole owner.
Occasionally, both spouses will continue contributing financially to maintaining the home during the divorce proceedings or even after. The spouse not living in the home could refuse to make payments as a form of resentment. This could be detrimental to both spouses as it risks falling behind on mortgage payments and being in default.
Avoiding Foreclosure During Divorce
There are a few different ways to avoid issues that could lead to foreclosure during or after divorce proceedings. During divorce proceedings, it will more than likely be necessary for you and your spouse to agree on any methods to avoid foreclosure. After divorce, if the home has been put solely in your possession, you can make any decisions regarding your mortgage and avoid foreclosure on your own.
Loan Modification
After a divorce is finalized, the spouse who is given the home can apply for a loan modification. With a loan modification, you can change the terms of your mortgage to make it more manageable.
Mortgage Refinance
If the spouse staying in the home cannot make mortgage payments on their own, this could lead to foreclosure and hurt both spouses’ credit. In most divorces, when a home is awarded to a single person, the other spouse is taken off the mortgage and deed. A mortgage refinance is one way to accomplish that.
In a refinance, you would essentially buy your spouse out of the house and refinance your mortgage to only be in your name. A mortgage refinance would leave you solely in charge of the home and mortgage payments.
Sale
Selling your home may be a good option for a few different reasons. If you are not currently in foreclosure but think you are headed that way or know that neither you nor your spouse could afford mortgage payments on your own after the divorce, selling your home may be a good idea.
If you are not in foreclosure, you could sell your house in a normal sale and use the funds to pay off your mortgage. Any extra proceeds could be split between you and your spouse.
Short Sale
A short sale is an option to avoid foreclosure where you sell a home that’s already in foreclosure to avoid the home being foreclosed on. In a short sale, you have to work with your lender to sell your home and pay off your mortgage.
A short sale could be more difficult during a divorce. Both you and your spouse have to agree to the short sale to sell your home.
Contact a Foreclosure Attorney Today
Foreclosure can be difficult and confusing to navigate, not to mention stressful as you worry about losing your home. Going through a divorce while worrying about foreclosure makes it more complicated and stressful.
If your house is close to or already in foreclosure, there may be options to help you keep your home and avoid foreclosure. Even if you are going through a divorce and your financial situation is changing, there may be ways you can work with your lender.
A foreclosure attorney can look at your financial situation and recommend the best option to help you avoid foreclosure.
Contact Denbeaux Law today to learn more about how we may be able to help you.
