Metro-Detroit Divorce Lawyer: Am I Still Liable For The Mortgage After Divorce?

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     In many divorces in Michigan, there is the issue of real estate. Many times, the couple will purchase a house and get a mortgage in both their names. This leaves a very sticky issue when that couple divorces: Who is responsible for the mortgage a divorce?

     Generally, whomever gets the house in the property settlement, will be responsible for the mortgage. The divorce judgment will state that as a property settlement”Plaintiff is responsible for the mortgage…”. But does that relieve Defendant from the liability? The answer is no.

    When you take out a mortgage mortgage is signed, it creates a liability on both the husband and wife in that both are jointly liable for the payments. So if either party misses a payment, the mortgage company or bank can go after either party. This liability does not end because the husband and wife got married, regardless of what the divorce judgment states. The reason is that your divorce judgment is a contract between you and your ex-spouse, and the mortgage company is not a party to that divorce. Also, state court judge does not have the power to relieve anyone from a mortgage that is legally signed by both parties. So even after the divorce judgment is signed and your ex-spouse is responsible for the mortgage, you will be liable if the ex spouse misses any payments. So what can you do to protect yourself?

    It is important to craft the divorce judgment carefully. You will want an indemnification clause in your judgment that will allow you to go after your ex spouse for damages if he/she fails to make payments and the mortgage company sues you. This means you get sued by the mortgage company, you can sue your ex spouse, usually through a contempt of divorce judgment action in court. Also clauses that allow you to use a judicial sale action if your ex spouse misses three consecutive payments will give you added protection. Finally, you will want a clause that requires the ex spouse to refinance the mortgage to get your name off the mortgage. 

     This is why it is important when going through the divorce process, your attorney understands the implications of a joint mortgage in a divorce, and is able to refer you to qualified mortgage experts and a Realtor. If you have any questions, feel free to call your Metro-Detroit Divorce Lawyer for a free consultation to see how this intersection of the two areas of law may affect you. In Macomb County, call (586) 439-4297, extension 0. In Oakland County, call (248) 581-0598 extension 0.

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