Paying the mortgage after separation is a non-negotiable financial obligation that belongs to both parties, equally. While couples may be in flux or experiencing financial strains, the bank does not care and will not make allowances for not paying the mortgage. Both parties will remain one-hundred percent responsible for making the mortgage payment every month. However, it is possible for couples to work together to come to an agreement as to how the mortgage will be paid. This is the smartest approach a separating couple can take as it will protect both of them from credit issues and/or the bank foreclosing on the property.
There are many reasons why a couple might not be able to continue to pay their mortgage as they did when they were a couple. Some of these reasons include:
- One person has moved out of the residence and is now paying rent on another home. This can make it financially impossible for the non-resident to afford to pay for the whole or any part of the mortgage on the marital home.
- The person living at the residence is a stay-at-home parent and cannot quickly gain employment that would be sufficient to make the full mortgage payment
- The person who is no longer residing in the home may have some anger and resentment and simply refuse to help make any part of the mortgage payment
If any of these situations arise, the first thing a couple should do is contact their mortgage holder and ask if it is possible to adjust their original payments based upon their limited financial hardship. It is possible the holder of the mortgage will agree to work with the couple, rather than have the mortgage go unpaid. If the bank holder refused, then couples can embark on a variety of other options.
Alternative Financial Options
It is always encouraged that a couple sits down, possibly with a mediator, to see if they can come to some agreement regarding the ongoing mortgage payments. Some options include;
- For the couple to continue to live together, thereby saving on the cost of another dwelling, for the limited period of time prior to finalizing their divorce. This would allow for expenditures to remain the same until one person buys the house of their own accord, putting a new mortgage in their name only, or the home can be sold.
- For the person who is making enough money to afford to pay the mortgage to do so, allowing time for the second person to seek gainful employment that will eventually allow them to pay half of the mortgage.
- Agreeing to put the house on the market as soon as possible to reduce the number of mortgage payments that need to be made.
- Rent the home for an amount that will allow for the rental income to pay for most or all of the mortgage
No Alternative Agreement
In the event that no agreement can be reached between the parties, the homeowners can request assistance from the court. One or both parties can make an application for the court to do one of the following;
- Decide as to each person’s share of the mortgage payment and issue a corresponding order for the same
- Order the home be put up for sale immediately
- Order one party to pay the mortgage in its entirety
While separation is both financially and emotionally difficult, it is always recommended that the couple be willing to speak openly and cooperatively with each other over their joint financial responsibilities. When responsibilities, such as a mortgage payment, is equally owned by both persons, it is in everyone’s best interests to make sure the mortgage is paid and each person’s credit rating is protected.
In the event that you find yourself in need of assistance, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.