The division of marital property can be a complex aspect of divorce proceedings for many Missouri denizens. The inherent emotions involved in divorce litigation can serve to complicate this situation, so a satisfactory agreement regarding property division may be a challenging prospect that can result in financial struggles for both spouses. Ownership of the marital home is often an issue that causes conflict.
Divorcing spouses often come to an agreement in which one spouse transfers title to the home to the other. While this manner of property transfer is legal, such a transfer places the relinquishing spouse in a vulnerable position regarding the mortgage loan and the handling of future payments. It is important to remember that creditors are not parties to the divorce litigation. Even though some divorce decrees set forth specific guidelines and instructions regarding future mortgage payment obligations or the transfer of property from one spouse to the other, mortgage companies are not bound by a divorce decree. Provisions such as these may provide an avenue for the relinquishing spouse to seek enforcement of the agreement, but they have no effect on the existing mortgage loan. Therefore, both spouses are still legally responsible for the loan unless the house is sold or the loan is altered by a refinance in which one spouse becomes the sole debtor.
An attorney who is familiar with Missouri divorce laws may be able to help individuals navigate the divorce litigation process. Each divorce proceeding presents different challenges based on the amount of property obtained during the marriage, whether there are children or business assets involved, and a variety of other factors. The equitable division of marital property depends upon reasonable negotiation and accurate valuation of marital property. The court may assist with this division if no satisfactory agreement can be reached.
Source: Fox Business, “How Does Divorce Affect Bankruptcy and Mortgage?“, Justin Harelik, July 03, 2013