For divorcing couples in Illinois, the process of splitting up their marital assets and debts can be quite complicated. Many couples find that their family home is not only their single most valuable asset but it is also one that elicits a lot of emotion due to the memories attached to it. It is not uncommon for one spouse, often the wife, to want to keep a home after a divorce. Despite this desire, many people end up selling their homes when they get divorced.
One reason that selling a home in a divorce is so common may be the challenge associated with the home’s mortgage. As explained by The Mortgage Reports, even if a divorce decree stipulates that one spouse will be responsible for the home and the mortgage payments, both people can be considered liable for the debt in the eyes of the bank if the original joint mortgage remains in effect.
According to Bankrate, the only way for a spouse willing to let the other person keep the home to eliminate their financial liability from the home is for the person taking responsibility for the property to get a new mortgage in their name only.
If this does not happen and the person who kept the property fails to make a payment or is late on a payment, those actions could be reported on both people’s credit reports. Even signing a quit claim deed to transfer ownership to one person alone is not enough to prevent this from happening.