Georgia property owners who are going through a divorce may wonder how the property will be divided between the two former partners. Even if one spouse is award a house that was owned jointly in the divorce decree, both names will still be on the loan unless the owner files for a new mortgage. The mortgage will still show up on the credit report of both people despite the decree of divorce. If one person’s name is on the loan, creditors can sue that person because they still have a contract with them, even if the divorce decree states that the other person is keeping the home and taking on the debt.
One option for splitting up large assets such as a home is for the spouse who will be leaving the property to buy the other one out and for the spouse who is staying to refinance the property in his or her name alone. Doing this prior to the divorce can make the whole process go much more smoothly. That way, the spouse who is moving out will be able to qualify for new loans. If the spouse who is moving cannot pay the full amount of the other spouse’s investment in the home, gift funds may be used to reach the full amount.
Those who are getting a divorce should take a look at their credit report to see what debts are in their name prior to filing. It’s a good idea to fix any problems with the report at this time. A divorce lawyer can help someone determine what they legally own and what the best move is for splitting up a house and mortgage.
Source: Credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, December 15, 2014