It is fairly common for one party to a divorce to be awarded the marital home through the property division process. Typically, that party also will be responsible for paying any mortgage loan that is secured by the marital home. Since mortgage loans taken out by married couples usually are joint loans owed by both parties, a divorce decree often contains a provision that orders the party living in the home to refinance the mortgage loan solely in his or her own name.
Refinancing the existing joint mortgage loan into a new mortgage loan will eliminate the other party’s financial responsibility for the home altogether. This process helps to ensure that if the party who is living in the home fails to make the mortgage loan payments, the other party will not be held responsible. In fact, unless the party not living in the home files for and receives a bankruptcy discharge, refinancing is likely to be the only way that the party will be able to remove his or her name from the mortgage loan.
The refinancing process does not always go as smoothly as the parties would like, however. In many cases, the party living in the home may not qualify to refinance the mortgage loan solely in his or her name. Whether the party’s income is considered insufficient to solely support the mortgage loan or his or her credit score is simply not high enough, refinancing is impossible if no lender will offer it as an option.
When an ex-spouse does not comply with a provision in a divorce decree or court order, the remedy is for the other party to file a contempt of court action. A person can be held in contempt by the court for failing to follow a court’s order. As a practical matter, however, if the party can show that he or she has tried to refinance the mortgage loan as directed, but has simply been unable to do so, he or she is unlikely to be held in contempt of court. In this case, there is little or nothing that you can do to compel the other party to do what is impossible for him or her to do. This is an example of why your choice of attorney matters. A well drafted settlement agreement or court order can provide the parties protection beyond relying on just a good faith effort to refinance.
Divorce, real estate, and property division matters can be very complex. If you are facing a divorce and these types of issues, you should consult with an Atlanta divorce attorney who has the experience and knowledge to properly advise you. Contact us or call today to learn how Shaw Law can work with you to achieve the best outcome possible for you and your children.
Scott Shaw is founder and principle of Shaw Law Firm LLC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.