NJ Mortgage Help for Single Parents

Going through a separation and divorce is never easy, but the complication level increases when you add children to the mix. Establishing a stable family life for your kids is something every good parent strives to do, and divorce can throw a wrench into even the best laid plans.

Supporting the expenses required as a newly single parent is a daunting task as you attempt to maintain as much constancy and normalcy for your children as possible. To that end, the marital/family home is most often where divorced parents elect for their children to remain living.

With that being said, finances don’t always stretch far enough for one parent on their own to pay the mortgage on that family home, along with all other monthly expenses. If both parents are able to pitch in financially to keep the children and one parent in the home, the chances of losing the home are lower. However, the threat of foreclosure for recently divorced single parents is real, and although frightening, it is not something that will go away if you ignore it.

If you are a single parent fighting to keep the home your children have thus far grown up in, you may be overwhelmed by the responsibility of making that monthly mortgage payment on your own. Missed payments are common after significant life events like job loss, illness, death, and, you guessed it – divorce.

The bank will never throw me out since I have young children, right?

Unfortunately, too many people simply give banks and lenders a lot more credit than they deserve. Your bank does not care if you have children, an elderly parent, three sick dogs and a chronic illness – their bottom line is money. You may think, “But there are people working at that bank; surely there is someone there with enough empathy to see that I am struggling.”

While that may be true – of course there are kind people working in banks and lending institutions – they must follow the instructions they are given by their superiors. A mortgage loan that is not being paid on time or at all WILL be sent into foreclosure by the lender. The question is not “If” but “When.”

How can I keep the bank from foreclosing? I just need a little more time!

The best move you can make if you’re in a similar situation is to take action before your home is foreclosed upon by your lender. You may qualify for a loan modification or refinancing. A New Jersey foreclosure and bankruptcy attorney should be the next person you call. Not many attorneys specialize in both areas, so it is important that you work to find a certified NJ attorney who has the experience you need.

Why do I need a bankruptcy attorney? I’m not broke and I want to keep my home.

An experienced NJ attorney who handles both foreclosure defense and bankruptcy matters will be able to stall your foreclosure by using the Automatic Stay. This tactic can only be utilized if the debtor files for bankruptcy.

Even if filing for bankruptcy was not on your top ten list of things to accomplish in life, it is a means to an end that has helped a multitude of people in your exact situation before.

 

Image: “Mother’s Moment” by Leonid Mamchenkov – licensed under CC 2.0

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Multi-Generational Living Arrangements & Home Ownership Rights

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Today’s modern families are ever-shifting in a multitude of directions, some of which were made possible by the evolution of our nation’s legal system. Still other present-day families form when an adult “child” returns to live at home after attending college, job loss, divorce, or simply by choice. Additionally, many older parents live with a daughter or son and their family in order to cut costs and to share child-rearing duties of the next generation.

Regardless of the reason, the changing structure of the typical American family can raise some questions about ownership of the family home. When other adults outside of the original home owner live together, what are their rights if that homeowner passes away?

Example: Single mom Nicole and her mother decide the best course of action after Nicole’s divorce is for the two of them to move in together. Nicole’s husband kept the marital home, so Nicole and her two children move into her mother’s more-than-ample house. As Nicole’s father passed away several years ago, this decision will allow companionship for Nicole’s mother, and will relieve the financial burden on both women.

Something important for Nicole and her mother to think about is what will happen to the home when Nicole’s mom passes away? Assuming the current living situation continues until such a time, what will Nicole’s rights be?

In New Jersey, Nicole and her mother can modify the home mortgage paperwork to include special language that will protect Nicole and her children from losing the home upon the death of her mom. The deed to the home must say that Nicole and her mother are joint tenants with right of survivorship.

Joint tenancy means that both parties named own the property equally, and upon the death of one of them, the deed to the home will automatically transfer to the other, superseding anything that is stated in the decedent’s will.

If Nicole’s mother had previously created a will indicating that upon her death, her home should be divided equally between all three of her children (Nicole and her two siblings), as long as the proper language was added onto the title documentation, Nicole should have no problem being granted full ownership of the home.

While in theory this is a relatively simple concept, it must be handled with the utmost seriousness and attention to detail.  As has happened in the past, if the joint tenancy language is not used precisely as required, legal disputes can and likely will arise.

Do you have questions about your rights to real property that you shared with another family member or unrelated roommate who has now passed away? If you were not joint tenants, you may still have some recourse, but you will have to act swiftly and with the aid of a very experienced NJ estate planning/real estate attorney.

If you’re currently in a situation like Nicole’s, be proactive and make sure that your living arrangements are solidified for the future by taking title of the home in joint tenancy.

Image credit: Bryan Anthony

Can a NJ Lender Foreclose for Late Payments Only?

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Like millions of Americans who own their own homes, your largest monthly bill is most certainly your mortgage payment. This is especially true if you’ve wrapped your property taxes in with your mortgage loan. Paying your mortgage each month can feel physically painful at times, especially if you have to write out all of those numbers on a paper check. OUCH.

Nonetheless, you obviously knew what you signed up for when you applied for your current mortgage, so its appearance each month doesn’t necessarily come as a surprise. Why, then, are so many Americans habitually late in paying for this particular loan?

The answer to that is simple. A large percentage of homeowners in this country are living paycheck to paycheck – earning just enough money every month to fulfill their financial obligations. This leads to tense moments when there simply aren’t sufficient funds in the bank to make the huge mortgage payment without fear of bouncing a check.

Nobody wants to bounce a check – we all know that. The hassle combined with added fees from your bank AND your lender mean that bouncing a check is an extremely costly mistake. Instead of potentially writing a check that can’t be cashed, many homeowners simply wait until their bank account has enough money to fulfill the mortgage payment. Sometimes this means the mortgage payment gets sent in a few days (or weeks) late.

The question here, is: Can a lender foreclose on a homeowner if they are chronically late with their mortgage payment? To clarify, we’re talking about a borrower who hasn’t actually missed any payments and technically isn’t “behind” on their mortgage – only slightly late with nearly every payment.

The short answer is that almost no lender will move toward foreclosure if the borrower isn’t actually behind on payments. That’s not to say it has never happened, but if it has, it’s exceedingly rare. In most cases, lenders don’t send out ‘Intent to Foreclose’ notices until a borrower has missed 3 full mortgage payments. Some lenders will threaten foreclosure after one missed payment, but as long as you can bring the mortgage current, they back down.

What can happen to you if you consistently pay your mortgage (or any other monthly bills) late is that your credit score can drop. Even though you may avoid foreclosure, late payments are often reported to credit reporting agencies, and each late payment will ding your score a few points. If you’re late every month for a year, your score may have dropped over 100 points.

If you’re currently struggling to pay your mortgage in a timely manner, there are some things you can do. First, check your credit score to see how much damage you’ve done. That gives you a good starting point. Next, get in touch with your lender and tell them why you’re having trouble paying on time. You may benefit from changing the time of month that your payments are due, paying online, or paying via telephone when your bank account is primed and ready.

If none of the above options is enough to alleviate your tardiness, you may benefit from applying for a NJ loan modification. You can apply for one on your own, but many times a real estate attorney can negotiate with your lender much more effectively, working to extend the life of the loan, reduce the principal amount due, erase late fees, and maybe even lower the interest rate on the loan. One or a combination of these modifications can make paying your mortgage on time much more manageable.

 

Image credit: John Lloyd

Can I File for Chapter 7 and Chapter 13 at the Same Time?

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“Sometimes one bankruptcy isn’t enough.” – George Veitengruber, Esq.

As we’ve discussed before on our blog, there are time limitations put into place that prevent a debtor from receiving a second chapter 7 discharge unless at least eight years have passed since their first chapter 7 discharge. You also cannot be granted a chapter 13 discharge unless at least four years have passed since you filed for chapter 7, so where on earth can we possibly be going with this?

Bankruptcy law disallows back to back bankruptcy discharges in order to avoid people abusing the bankruptcy system. With no restrictions, any debtor could theoretically bounce from one bankruptcy discharge to another, and that wouldn’t be fair to creditors, nor would the debtor learn any valuable lessons regarding their finances.

There are situations, however, wherein a debtor can file consecutive bankruptcy cases, but only when the desired outcome is not a second discharge.

Most people associate bankruptcy with ridding themselves of all of their debt, the closest thing to a financial “do-over” that exists in the real world. While a bankruptcy discharge can indeed be akin to a capital tabula rasa, giving debtors a clean slate isn’t the only function of the bankruptcy system.

For example, one of the most beneficial (and immediate) effects of filing for any type of bankruptcy is the automatic stay:

Automatic stay \noun\  a judicial order known as an injunction that halts any and all lawsuits as well as actions by creditors attempting to collect money from someone who has filed for bankruptcy

Many people file for chapter 7 when they have a significant amount of unsecured debt.

Unsecured debt \noun\ a debt that doesn’t have any collateral attached to it that a creditor could take for payment if the debtor defaults
Examples of unsecured debt: credit card debt, student loans, utility bills, medical bills, some taxes, and most personal loans

In filing for chapter 7 relief, many or all unsecured debts can be discharged at the end of the bankruptcy case, as long as the applicant meets the filing requirements and no fraud is at play.

Frequently, a discharge of all unsecured debts so significantly reduces the financial strain on the debtor that they are then able to resume paying their monthly living expenses without difficulty.

Sometimes, though, even after a chapter 7 wipes out a huge chunk of their debt, some people are still left facing a significant amount of non-dischargeable debts.

Non-dischargeable debt \noun\ money owed that can almost never be discharged via any type of bankruptcy proceeding
Examples of non-dischargeable debt: child support, alimony, student loans, income tax debt

Still other people, after filing for chapter 7 and receiving a discharge, are left with secured debt(s) that they want to continue making payments on in order to keep the property that secures the debt(s) in question.

Secured debt \noun\ a debt that has collateral attached to it that a creditor could take for payment if the debtor defaults
Examples of secured debt: home mortgage, auto loan, valuable personal property loan (mechanical equipment, furniture, tools, etc)

Whether the debtor is left with substantial non-dischargeable debt or secured debt(s) that hold important value (usually a mortgage and/or auto loan), filing for chapter 13 immediately after a chapter 7 discharge will allow for a reorganization of any subsequent arrears owed, allowing the debtor to bring the loan(s) current.

Veitengruber Law can navigate your path through multiple bankruptcies! If you thought your financial situation was too “messed up” to be fixed – think again. Even better – we want to help you. Please give our office a call if your debts have gotten out of control. Your consultation won’t cost you thing, so you’ve got nothing to lose.

Image credit: Alachua Cty

 

 

Filing for a Mortgage Modification and Bankruptcy at the Same Time

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If you’ve been fighting off an impending foreclosure for a significant amount of time and you don’t seem to be making much headway, you might need to get more aggressive with your debt resolution strategies.

Recently, a question was raised regarding filing for bankruptcy and modifying a mortgage simultaneously. Many people don’t think of bankruptcy properly, so putting bankruptcy together with a mortgage modification may seem strange at first. However, when you realize that bankruptcy laws were created to help distressed debtors afford their monthly living expenses again, making some changes to an existing mortgage is a very sensible thing to do, especially if you’re filing for bankruptcy.

Luckily, the New Jersey bankruptcy court actually provides debtors with a program to assist them with modifying their current mortgage, if they wish to keep their home even after their bankruptcy discharge. Even so, if you feel like filing for bankruptcy and applying for a loan modification is right for your situation, you simply must seek the help of a NJ attorney who is not only experienced in bankruptcy but also in foreclosure and loan modifications.

Navigating the bankruptcy code and rules can be extremely confusing and should not be attempted without the assistance of not just a professional, but an expert in the above-mentioned legal areas. Taking on such a complex combination of laws can easily lead you down the rabbit hole into mass confusion which may very well cause you to either mis-file something important, or to forget a piece of information altogether. Even with the best intentions, you could end up committing bankruptcy fraud unknowingly, which as we all know by now can only end very, very badly for you.

Whether or not you will be approved for a mortgage modification while you’re in the midst of a bankruptcy filing will depend on your debt-to-income ratio – specifically what it will look like after your bankruptcy case is completed.

You can discuss what chapter bankruptcy to file for with your attorney. Chapter 7 bankruptcy entails a liquidation (sale) of a lot of your assets in order to repay at least some of your debts. If you are granted a chapter 7 discharge, the debts remaining at the end of your case will be erased, unless you choose to reaffirm any of your debts in order to keep the asset in question, namely: your home.

Chapter 13 bankruptcy is essentially a reorganization of your debts. Some of your debts may be reduced, and most of them will be restructured and/or refinanced so you can afford the payment schedule with your current income.

During a loan modification, your attorney will negotiate with your mortgage lender to alter some of the terms of your loan in order to make it more affordable for you. These alterations may include changing the length of the loan, wiping out past due amounts, eradicating late fees, etc. The goal of applying for a mortgage modification is to have small but significant changes made to your loan.

To learn more about filing for bankruptcy while also initiating an application for a mortgage modification, contact Veitengruber Law today.

 

Image credit: Cafe Credit

What is Credit Counseling? Is it Right for Me?

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All of the terms associated with getting out of debt can get so confusing that you may end up not even understanding which service(s) you could benefit from. That’s why we’re putting out a Back to Basics series, explaining many of the most common terms we use regularly. Look for a new Back to Basics post every week.

What is Credit Counseling?

Just as a marriage counselor sits down with a married couple in order to evaluate the state of their relationship, a credit counselor takes a good look at your finances. He will then work with you to design a plan of action that will see you paying off your debts faster, spending less money on non-essentials, and putting more money into savings.

Typically, you’ll be seeking credit counseling when you’ve found yourself deep in debt with no end in sight, but you can also seek this kind of help if you don’t have a lot of debt but want to save for retirement, pay for your child’s college education, refinance a loan, and more.

During your credit counseling sessions, you will essentially receive an education about how to improve your ‘Money IQ.’ This means that credit counseling is not just a temporary quick fix; you will learn how to maintain financial stability for good.

Who Provides Credit Counseling Services?

Firstly, you should know that there are many credit counseling services in business today who use unethical and often illegal methods to attempt to get you the results you want.

It is important to choose wisely when looking for help with your finances. If you have a lot of debt and need assistance negotiating with lenders, look for a certified and experienced NJ debt settlement law firm.

Many credit counseling services will claim to be able to help you settle your debts in addition to providing you with credit counseling assistance. The truth is that they usually don’t have the ability and necessary knowledge required to negotiate with lenders or to help you file for bankruptcy. All too often, debtors end up even deeper in debt after working with a so-called ‘credit counseling company!’

When you work with a certified debt negotiation attorney, you’ll be in good hands. Look for a New Jersey credit counseling law firm that also specializes in debt restructuring, bankruptcy, credit repair, asset protection and real estate matters (especially if your debt has pushed you into or toward foreclosure.)

How Much Does Credit Counseling Cost?

While you may be able to find a company that will quote you a remarkably low price for their services, remember the saying: “You get what you pay for.” Also – keep in mind that these companies are routinely engaging in fraudulent methods (scams) that have them promising results to customers that they simply cannot, and will never, deliver.

Rather than paying an uncertified company for credit counseling services that’ll get you nowhere fast, consider paying someone who really knows what they’re doing and get a huge return on your investment!

It can be a knee-jerk reaction to balk at the thought of hiring an attorney, but when you find the right certified New Jersey bankruptcy attorney, he will always have valuable experience in the areas of credit counseling and debt negotiation.

Will you have to pay an attorney to teach you how to get out of your unfortunate financial bind? You definitely will – but it will be more than worth it when your debts are either completely discharged (via bankruptcy), negotiated down to much lower amounts, or refinanced and restructured.

Do you think you could benefit from some high quality credit counseling? Would your life be less stressful if your finances weren’t constantly on your mind? If you want to learn more about our credit counseling program – call today and we’ll set up your free consultation. [(732) 852-7295]

We are happy to consult with you in our offices or over the phone, and we look forward to helping you.

Image credit: Coalition for ICC

Can Filing for Chapter 13 Help Me Save My Home?

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Have you fallen behind on your mortgage payments and are now at risk of losing your home to foreclosure? Is keeping your home something that you want? Would making your monthly payments be feasible if the amount due each month was adjusted to fit into your budget?

Frequently, we see homeowners at risk of foreclosure who are desperate to keep their homes. Many times, the homeowner has already applied for a loan modification with their mortgage lender. Unfortunately, waiting for a loan modification to be approved can drag on and on for many months.

If you have applied for a loan modification, your mortgage debt (including past due payments and late fees) will snowball while you wait for your loan modification to be approved. Sadly, many loan modifications are not approved the first time around, especially without help from a debt relief attorney. Either way, while you wait for an answer, the amount of arrears will continue to climb, making it more impossible than ever for you to catch up.

We’ve worked with clients who’ve found themselves in this exact scenario. As we recently discussed in our last blog post, many people wait until the last minute to ask us for help saving their home from foreclosure.

Though Veitengruber Law does have last minute strategies that can often help postpone a foreclosure, today we’d like to present you with a way to stop a foreclosure early, giving you many options and the time you need to reorganize your your debts.

While most people associate bankruptcy with chapter 7, filing for chapter 13 may be exactly what you need if you’re facing foreclosure while attempting to obtain a loan modification.

Chapter 13 is a good choice for you if:

  • Your lender has filed a Notice of Default [missed payment(s)].
  • Foreclosure appears imminent.
  • You want to keep your home.
  • A loan modification would make your payments achievable.

How can a chapter 13 bankruptcy help me?

  • Filing for chapter 13 puts a stop to any foreclosure proceedings, known as an automatic stay. Your mortgage lender(s) (and all other creditors) are legally prohibited from collecting payments during the automatic stay period.
  • You are permitted to continue seeking a loan modification during your chapter 13 bankruptcy proceedings.
  • While you are seeking the modified loan, you will still be able to make payments (in the amount you can afford) so that you don’t fall further and further behind.
  • Any unsecured debts that you may have in addition to your mortgage loan can also be reorganized or modified to make repayment achievable. Some unsecured debt may even be dismissed altogether.
  • As soon as you file for chapter 13, you will start communicating with the bankruptcy division within your mortgage company. Oftentimes this results in a loan modification application that gets approved!

Consult with an attorney who specializes in debt relief and loan modifications to find out if a chapter 13 bankruptcy is right for you. Send Veitengruber Law a message now or call us at (732)852-7295 for more information about bankruptcy and foreclosure in New Jersey.

Image credit: Anders Lejczak

Is Fear Keeping You from the Financial Help You Need?

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One of the biggest hurdles for many of our clients is fear. This emotion can be a gigantic stumbling block when it comes to getting assistance in many situations because asking for help is hard. You may think that asking for help means you’ve failed at something, but that line of thinking will only magnify and worsen the problem at hand.

The reason you have trouble asking for the help you need is because we live in a ‘self-help’ society where, for many people, seeking assistance suggests a deficiency of some sort.

Regarding personal finances – it’s completely understandable that many of our clients come to us at the last minute. The hard truth about the extent of your money problems can be really difficult to come to terms with. Feeling out of control and unsure how to fix things, it probably has felt easier not to think about money at all.

When you’ve waited until the eleventh hour to reach out for help, you’re much more likely to be acting in panic-mode, which will cloud your thinking. It can also impair your ability to communicate your needs effectively, making everything that much more confusing for everyone.

Veitengruber Law advises anyone struggling with any of the following to stomp out FEAR and ask for help as early as possible:

  • paying your monthly living expenses
  • outstanding credit card debt
  • imminent foreclosure
  • looming sheriff’s sale
  • job loss (which will quickly lead to financial strain)
  • divorce as a displaced homemaker or stay-at-home-mom
  • overwhelming medical debt
  • identity theft that led to a financial crisis
  • deficiency judgement after short sale or foreclosure
  • any other personal or business financial burden

The earlier you come to us, the better we will be able to help you sort out whatever money situation you’ve found yourself in. We want everyone who needs us to have no fear about consulting with us. In fact, you should be proud of yourself for reaching out to a bankruptcy attorney who has the experience needed to turn your situation around.

With all of that being said – if you have let fear hold you back and you’ve come to the sudden realization that you’re about to be in real, serious trouble, we’re still here with open arms, ready and willing to go to battle for you.

Did you bury your head in the sand as the foreclosure sale date on your home passed? Does it feel like there can’t possibly be any way to save your home from sheriff’s sale?

Even when it feels hopeless, push your fear aside and call us. We’ll have an entire team working to save your property or solve whatever financial puzzle you challenge us with. Last minute solutions aren’t ideal, but when you work with us, they are possible.

We can help you file for NJ bankruptcy, which will automatically postpone a foreclosure, even if the Sheriff’s Sale is tomorrow! We’ll go over your financial details to determine the best plan of attack. No matter what money emergency you’re facing, Veitengruber Law is the team you want on your side. We prioritize legal emergencies. You will not be ignored, pushed to the bottom of the schedule, or left to play phone tag with our voice mailbox.

If you need help saving your home, getting out of debt, filing for bankruptcy, applying for a loan modification, or arranging the sale of your home via short sale – message us today or call us now (732-852-7295) to get the kind of assistance that gets results.

 

Image credit: David Goehring

Displaced Homemakers: Getting Back on Track

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Are you a displaced homemaker?

Were you married, unemployed outside the home, and providing care and services for a number of your family members? If so, you were likely dependent on your spouse’s income to meet the financial needs of your family. Women (and men) who meet the above description and then find themselves divorced are referred to as displaced homemakers. The most important thing to know first is that YOU HAVE RIGHTS.

Working and living as a stay-at-home-mom (SAHM) is a stressful, all-consuming job. That’s right; SAHM is an actual job title! The only difference between working as an at home parent and working outside the home is the lack of a paycheck.

When divorce happens to couples who designated one parent to stay home to care for the children and the home, it is natural for the at home parent to panic. After all, if you haven’t been earning an income for a number of years, how are you possibly going to be able to financially support yourself?

You and your spouse made the decision for you to stay at home and raise your children and/or care for your home. When that decision was made, you became entitled to part of the income that was earned by your spouse. If you are currently entering into the divorce process, find a New Jersey divorce lawyer who has successfully worked with displaced homemakers so that you can get the Property Settlement Agreement that you deserve.

When your split is finalized, you’ll have to come up with a plan for supporting yourself after your divorce. Where are you going to live? Will you have to get a job outside of the home? Who will care for your young children? How will you be able to afford to pay for daycare? Do you have any rights to the marital home?

All of these questions can literally plague the mind of a displaced (or soon-to-be displaced) homemaker, causing unimaginable levels of stress and worry. Veitengruber Law knows and understands the plight of the homemaker who has been through a divorce. In fact, we’ve worked with enough displaced homemakers that we decided to partner up with Brookdale Community College’s Displaced Housewives Program.

On February 24, 2016, we will be presenting a workshop specifically for stay-at-home-parents who have been (or will soon be) divorced or separated from the person who was the wage in the relationship.

Topics we will discuss at this interactive workshop will center around real estate, and include: buying, selling, foreclosure, loan modifications and short sales. We will also explain the rights displaced homemakers have to their homes and how the Down Payment Assistance Program works.

Please note that this workshop is not open to the public and you must be pre-screened in order to attend. If you think that you are a displaced housewife, find out if you qualify by calling Laurie Salka at The Displaced Housewives Program at Brookdale Community College. Laurie can be reached at 732-739-6020. You may also email her at lsalka@brookdalecc.edu.

If you are interested in a private consultation with Veitengruber Law regarding your situation, you will be able to schedule a free consultation at the workshop on February 24th. You can also call our office directly (732-852-7295) for a free consultation at any time. We look forward to helping you achieve financial independence!

Image credit: Simon Harrod

Facing Foreclosure During a Divorce

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Nearly everyone who has been through a divorce has had to deal with at least some level of financial struggle. For some people, divorce necessitated a complete money mindset makeover. One of the biggest transitions that has to be made when a couple splits relates to the marital home. If you are a homeowner who is currently going through a divorce, you may be wondering if your home will be foreclosed upon by your lender.

Most married couples enter into a mortgage agreement jointly, as they happily begin their lives together. Years later when the marriage is breaking up, it’s much less pleasant to have to disentangle yourself from a joint mortgage loan. Tempers flare, children may be involved, and communication can be complicated and tense.

There are many different answers to the question, “Who will keep the marital home?” However, sometimes neither party wants to or is able to keep up with the payments without the other partner. Of course, other situations may also prevent either party from remaining in the marital home, like new relationships and relocation for work, but the most common reason is lack of finances.

A very important thing to keep in mind as you move through your divorce is that your mortgage lender is not even slightly interested  in the state of your marriage. If you and your spouse signed for the home jointly – you are both equally responsible for the debt.

Although it may be quite difficult, it’s important to keep communication as open as possible when it comes to dividing up your marital assets and debts. Miscommunication on important financial issues can lead to devastating results.

If both parties move out of the marital home and both refuse to continue making monthly payments on the mortgage, the home will quickly go into foreclosure. Foreclosure is not a desirable outcome, especially if there are other plausible options for the property. Don’t let your pride or anger get in the way of making a smart decision that can help you avoid foreclosure!

Discuss with your spouse the idea that one of you remain living in the marital home. If this is a situation that you can both agree to, the spouse living in the home should plan to either assume the loan or refinance it in order to remove the other spouse from liability.

If you plan to go this route, find out if your mortgage contains a due on sale clause.

Remember that one spouse may be entitled to either child support, alimony or both after the divorce is final. This money may be enough to make staying in the marital home a reality for the support receiver, even if they don’t earn enough income on their own to pay the mortgage.

If one party remains in the home but fails to refinance or assume the loan – trouble could be nigh. If at any time, that person decides to stop making mortgage payments, the bank/lender will not care if the parties are happily married, platonic roommates, or divorced and divided.

The only thing that matters to the lender is whose name(s) are on the mortgage loan and promissory note. If both names remain on the documents, it doesn’t matter if you’ve been divorced for a decade – both parties will still be held responsible. Foreclosure of the property will be significantly damaging to both parties’ credit scores.

If you are dealing with foreclosure and divorce, find out what your options are now, before you end up facing a deficiency judgement and a rotten credit score. Ask us all the questions you want in your free consultation so that we can help you decide what steps you want to take next.

Image credit: Don O’Brien