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It’s already tough enough to face divorce, but when you are also dealing with property foreclosure your sanity may be tested. It may be a thought that divorce courts will finalize any property process, but this may not be the case when the property is in foreclosure. A Utah divorce can cause some serious financial consequences, so here are a few tips to deal with your property foreclosure when you are in the middle of a divorce.
Home Mortgage
In order to handle the property and how the foreclosure will be assessed, first we must determine who is going to be responsible for the mortgage of the property.
Often after married, a couple will jointly acquire the title of a property. Although sometimes, one of the spouses will take the mortgage entirely, this would be the primary holder as they have signed a promissory note.
A promissory note is, a legal document that details a respective person’s obligation to pay for the mortgage. If a couple jointly signed this then they both are held accountable, however, when a singular spouse signs it, they relinquish all obligations to the other party. Therefore, that spouse would be held accountable.
When a couple is undergoing a divorce, the court will make any actions needed in order to establish who will keep the marital home and whom will have to be responsible for the mortgage payments. If both parties refuse to comply, the house can begin its foreclosure process.
There is no way to obtain forbearance toward your foreclosure while being in a divorce. The only exception to this is if the property’s mortgage and foreclosure cost are brought current.
If you are facing foreclosure, there are a couple of approaches to handle this financial burden.
The first is just to give up and let the bank foreclose the property. This means you will no longer be held responsible for the financial truckload of any past due mortgage payments. When this happens, it may be to your best interest if you hire an attorney to determine if this the ideal path for you. However, on the bright side, letting your property foreclose does not have any impact on to your credit.
Short Sale
Short sale may be one of your options to resolving a foreclosed home when going through a divorce. In this case, you will be selling your property at a greatly reduced price, but the transaction is processed extremely quickly which means almost an instantaneous amount of money.
Depending on your finances and specific circumstances, you may want to give up the property to you ex-spouse as it may alleviate any additional financial burdens. If you’re not happy with this outcome, ask your local attorney to help you know which path is best for you and let them talk to the lenders to potentially have them modify terms in your mortgage so that you can be able to keep your property.