Ex-Spouse Behind on Mortgage Payments

Have been divorced (uncontested) since May of this year. Left my home with my ex still living ther and my son to move in for a year to see if he could afford it. The mortgage has not been paid since June. I am along with my ex on the mortgage and deed. We only had a verbal agreement. What can I do to protect myself. I cannot pay the arrears and found out there is a tax lien on the property.

One Response to “Ex-Spouse Behind on Mortgage Payments”

  1. Jeff Jenkins

    You recently asked:

    “Have been divorced (uncontested) since May of this year. Left my home with my ex still living there and my son to move in for a year to see if he could afford it. The mortgage has not been paid since June. I am along with my ex on the mortgage and deed. We only had a verbal agreement. What can I do to protect myself. I cannot pay the arrears and found out there is a tax lien on the property.”

    Verbal Agreements

    Legally, verbal agreements are sticky situations. In some cases, they are enforceable in court. In others, they are completely unenforceable. Unfortunately, one of the cases in which they are completely unenforceable is any situation involving real estate. The only real estate agreements that legally matter are the ones that are written down in an official way. In this case, that’s the agreement between you and your mortgage company. The verbal agreement you made with your ex and your son doesn’t affect that written agreement between you and the mortgage company. As far as they’re concerned, you still owe the money you agreed to pay them on the mortgage note that you signed.

    Getting Out of the Mortgage

    It’s very difficult to get out of a mortgage once you’ve signed your name. The mortgage company doesn’t care about any family troubles – they just want to get paid. The more names they have on the mortgage, the more people they can go after if the payments aren’t getting made. They won’t want to let you off the hook.

    The one way you can get off the mortgage is if your ex wants to keep the home and refinance it. If she is able to qualify for refinancing, you could have your name taken off the original Note and the Deed. However, it’s not easy to qualify for refinancing. If she hasn’t had the cash to pay the mortgage since June, it seems unlikely that she has enough income to qualify.

    The Tax Lien

    You mentioned a tax lien, but the consequences of that lien depend on the type of tax lien. If the lien is for unpaid property tax or unpaid water and sewer bills, you don’t have to worry about those things. You’re not personally responsible for that debt. They can place a lien, or a claim, on that property but they can’t actually sue you personally for collection. Certain other types of liens, however, may come with personal liability.

    Foreclosure

    The problem here is your exposure on the Note. If your mortgage company forecloses, picks the property up at the sheriff’s sale, and then turns around and sells it to someone, the payments on the Note continue to accrue very month until the mortgage company can sell it. You’re responsible for that deficiency, and it could be substantial. If you don’t pay, they can sue you for collection and potentially get a court order for wage garnishment or levies on your bank account.

    What can you do?

    If refinancing in your ex’s name isn’t an option, you may want to consider filing a bankruptcy. Aside from helping you deal with any other debt, a bankruptcy will wipe out your personal liability for the mortgage note. That means that even if no one is paying the mortgage, the mortgage company can’t sue you for the deficiency. It may be the best way for you to escape the situation.

    Bankruptcy is a serious decision and one that you shouldn’t take lightly. It’s best to sit down with a bankruptcy attorney to discuss your finances in greater detail. Your attorney can help you decide if bankruptcy is best for you or if you’d be better served by some other financial technique.

    I hope this helps,

    Jeff Jenkins

    Reply

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