What will happen in the divorce if neither my wife nor I can afford to keep our house?
Stillwater family law attorney, Matt Ludt, discusses how foreclosure can impact divorces.
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Phone: (651) 430-9700
This oftentimes comes up because the parties need both their incomes to cover the one set of household expenses and neither one of them can afford it by themselves. In that circumstance the parties need to look at a – either selling the house for the equity and split the equity that’s in there, selling the house and engaging in a short sale or considering a strategic foreclosure situation. Oftentimes we’ll either leave them to cooperate together in selling this in kind of the post-divorce world setting the parameters and say, “All right, this is how you make decisions, and you work with a realtor, and ultimately this is how you divide any equity that’s done after the closing costs,” or one party is just bestowed the right to manage all that. Ultimately, though, it comes down to a lot as to whether or not they’re both on the mortgage versus just one party, because if they both have skin in the game, they got credit attached to that. Then, they – maybe both of them wanna be participating in how that gets addressed, because they don’t wanna end up with a involuntary foreclosure on their record.