What Happens to Your Mortgage After A Divorce?

When a marriage ends in divorce there are a number of financial decisions that must be made. Spousal support, child support, and division of assets and debts are all important considerations that must be hashed out to the satisfaction of both parties.

One of the most pressing questions that many divorcing couples face is “Who gets the house?” Since California is a community property state, in most cases, California law will treat the house as community property and split the debt and value evenly between you and your spouse. Although your shared home likely has sentimental value to you both, the court can only consider its financial value when deciding issues related to property. You and your spouse will be responsible for deciding what to do with your home. 

Community vs separate property

Generally speaking, community property encompasses everything you own or owe while married. In cases of divorce in California, the court divides all assets and debts that are deemed community property equally between spouses. 

Separate property, on the other hand, includes both assets and debts that one spouse had individually before marriage. Financial gifts, property, or inheritance given to one spouse specifically are also considered separate property, even if the spouse received them during the marriage. Each spouse is entitled to retain the full amount of their separate property in a divorce.

Is a mortgage community or separate property?

Determining whether your mortgage is community or separate property can sometimes be tricky. Your mortgage is community property if you bought a house together after you were married or bought a house with money you earned during your marriage. 

If you bought the house with your own money before you were married, the mortgage would be considered separate property. However, any mortgage payments made jointly after marriage would be considered a community interest in the property and would be split evenly. 

Can I stop paying the mortgage if I move out?

Although you and your spouse will still be jointly responsible for paying the mortgage, you have several options moving forward. The following are some common scenarios:

• Sell the home and split the profits. If neither spouse is willing or able to maintain the home separately, this option can help ease the financial burden.

• Buy out. If one spouse wants to remain in the home, they can pay the other spouse half the value of the house. Usually, the spouse who is leaving removes themselves from the mortgage, and the remaining spouse will refinance the loan.

• Deferred sale. If one spouse wants to maintain the home, especially in cases where couples share minor children, the spouses can choose to stay joint owners of the home for a set amount of time. Once the children have moved out, or the custodial parent decides to move, the former spouses would then sell the home and split the profits.

Our experienced family law attorneys can help!

Working through the financial implications of divorce can be overwhelming. Determining community versus separate property and debt, assessing the value of your shared home and belongings, deciding on fair spousal and child support, and more is both mentally and emotionally taxing. You don’t have to do it alone. 

At Lonich Patton Ehrlich Policastri, we take the time to listen to you and work hard to protect your interests. We can help you understand property division issues and also ensure a fair distribution of your marital estate. Call us today at 408-553-0801 to schedule your free, 30-minute consultation. 

 

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.