If you are one of the many residents in California who is facing an impending divorce, you may know that California is one of a few community property states. This fact may impact your final divorce settlement but it does not at all dictate what the specific terms of that agreement will be. What creates an equal distribution of a marital estate can vary based on the circumstances. One factor often in play is the value of a couple’s home.
If your spouse wants to keep your home, there are some things you should know and do before you agree to that. As explained by The Mortgage Reports, you should never allow your former spouse to keep the house if your existing joint mortgage remains intact. Many people assume that if they have a divorce decree that identifies their spouse as responsible for the mortgage payments, that is sufficient. However, that is not true.
If your name remains on the loan and your former spouse misses any payments or is late on any payments, the bank has the authority to report that on your credit report as well as your ex’s. They also have the right to pursue repayment from you. Foreclosures also can appear on your credit report. A new mortgage in your spouse’s name only must be part of the agreement if they want to keep your house.
If you would like to learn more about the factors you should evaluate when negotiating your divorce settlement so that your financial future is protected, please feel free to visit the property division and homes page of our California family law and divorce website.