As the best divorce lawyers in Gilbert AZ we often get asked, “what do you do with the house that you and your spouse bought during the marriage?” Now Arizona is a community property state, so any house or any other property for that matter, that you acquired during the term of the marriage, is going to be considered community property. Now, since your getting divorced, of course both of you are not going to stay in the house. Inevitably, one party or the other ends up with the house. Who that is often becomes the decision of the parties, but sometimes the decision of the court. But houses present some unique and interesting problems in divorces. Not just who gets to stay in the house, but what do we do about a house that has a mortgage on it. Most people when they get a mortgage on a home when they’re married, have both spouses put on the mortgage.
When you get divorced, one party is taking the house and the other party is moving. That presents a problem, because the party who is moving out, or not staying in the house often wants their name taken off of that mortgage. They don’t want to be legally responsible for it anymore. After all, if the spouse who was staying in the house gets to keep the house, they should have all the responsibility for the mortgage as well. But that makes sense, that’s the way it should be. The problem often that arises is that there’s not enough equity in the house to refinance it out of the other spouse’s name into just one spouse’s name, but so what do you do in a circumstance where were that arises? There’s really only a few things that can be done with a house in divorce. One is you sell it. That’s that’s not an uncommon way of dealing with houses. The parties just say we’re going to sell the house. If there happens to be any money left over after the sell of the house, we’ll divide it and we’ll both go our separate ways. Option two is, one spouse stays, the other spouse goes, but the spouse who keeps the house has to go and refinance it into his or her own name.
Now, what I often do in cases like this is we put language in any agreement, giving that spouse a certain amount of time to get that refinance done and that’s really important, because the sooner your name gets off the mortgage, the sooner you’re going to be able to go on, maybe buy another house of your own, make other purchases, etc. Until your name is off that loan, your credit is going to always be affected by whether or not your ex is paying that mortgage on a monthly basis. Every once in awhile, we have a case where the ex doesn’t pay the mortgage and that creates a whole different set of problems which I’ll talk about in just a minute. But typically, if the parties don’t sell the house, one of the parties goes and tries to refinance the house. If they’re able to do that, great. Problem solved. Now he or she is the only one responsible for the mortgage and you can go on with your life. It’s really important, though, to have a deadline by which that is supposed to take place. For example, I often see parties who try to do these things on their own without the advice of an attorney. You know, in the spirit of let’s save some money and let’s not fight. They go and they put together an agreement on their own but they leave out really key details that a good attorney who deals with these situations wouldn’t leave out. I’ve seen cases, for example, where there’s no deadline.
Now why is that a big deal? If you don’t have a deadline for the spouse who stays in the house to refinance it, it could be years and there’s no legal obligation for them to do it within any specific time. So I always make sure that there’s a specific deadline, usually six months to a year, that’s a reasonable amount of time to get a refinance done. But if they’re not able to refinance the house within six months to a year, then usually we have something happen. Either the house reverts back to my client, the party who left the house, or we just sell it. Otherwise, you’re going to be in a situation where your ex could impact your credit for years to come. Now, what do you do if you have that situation where your ex is staying in your house and they don’t pay the mortgage and your getting calls from mortgage company? The problem is until your name gets off that loan, you’re gonna get those calls every single time your ex spouse doesn’t pay the mortgage. Why is that? After all, did the judge order that your ex is responsible for the mortgage, not you? Of course that’s what the court orders say. The problem is, that creditors, including mortgage companies, aren’t required to follow what the court orders say. All they know is that they have a contract with you and your ex saying that you will both be responsible for the mortgage, and now you’ve got an ex who’s not paying the mortgage and is screwing up your credit and making your life miserable.
So what do you do in that circumstance? In that circumstance, really you don’t have a whole lot of choice other than to go back to court and ask the judge to enforce the prior orders, and in a lot of cases what that means is that the judge is going to force the sale of the house. Well what do you do if you’ve paid the mortgage in the spirit of trying to save your credit, right? Your ex isn’t paying it. You don’t want your credit to go down the tubes. What do you do? The only thing you can do to save your own credit is to pay that mortgage until you can get the judge to order something new. In that circumstance, you could ask the family court judge to order your backs to pay you. Now, that’s the remedy. It’s a very complicated situation, but a lot of times, the problem can be solved by drafting really good settlement documents at the time of the divorce. Like I said, a lot of people try to do this on their own. They want to save a few bucks, but what ends up happening? They come back to the attorney anyway to sort of bail them out of a bad situation? So at the law offices of Kevin Jensen, we offer a consultation. Come in and sit down with us if you’re going through a situation like this, either at the time could divorce or even if you’re in a situation where you are in divorce but you’re fighting over a house afterwards. Come in and sit down with us. Let us talk to you about the situation. We’ve handled many, many cases involving parties fighting over houses and the proceeds of houses and mortgages on houses. We know how to help you in this circumstance and we know how to go fight for your rights. So give us a call, come on in, sit down, and we’ll about your situation. Thanks.
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