One thing that often pushes couples to the brink of a divorce is a financial crisis, which is why a foreclosure on a home and a divorce often go hand-in-hand. Indeed, debt can be one of the biggest stressors in a relationship, and if you are facing debt and are at risk of losing your home, and thinking about divorce, you may have a lot of questions about how each will affect you.
Dividing Debt in a Divorce
Many couples think that if they file for a divorce, they will be able to escape debt, particularly if the debt is in their spouse’s name. However, because Illinois law holds that all property obtained during the course of the marriage is marital property, there is a very good chance that you will be liable for mortgage debt if you and your spouse purchased the home during the course of your marriage. If the house was purchased by one spouse prior to the marriage, then it may be the case that spouse retains the residence and the debt.
Options When Facing Foreclosure During a Divorce
Another reason that divorce and foreclosure are often paired is because one party may stop making payments on a home when divorce is announced. If you are facing foreclosure as a result, some options are:
- To make all payments owed;
- Modify the terms of your loan;
- Short sale (you sell your home for less than the mortgage loan); and
- Filing for bankruptcy.
Other options for avoiding foreclosure in a situation where neither spouse wishes to keep the home include renting out the property (and using the rental income to make mortgage payments), or selling the property and using the profits to pay off any debts.
Foreclosure Makes Divorce More Complicated
Chances are that if your home is at risk of being foreclosed upon, you and your spouse are dealing with debt from a variety of other sources as well. Like assets in a divorce, debt will need to be divided in a manner that is equitable, and you will need to figure out a way to pay back the debt for which you are responsible. Depending upon the level of your debt, selling your home or other assets, working out a repayment plan, or even filing for bankruptcy may all be viable options. Any assets that you and your spouse have will also need to be divided amongst you in a way that is fair before your divorce can be finalized.
Questions About Foreclosure During Divorce? Contact Us Today
If you have questions about foreclosure during divorce, our lawyers have the answers you’re looking for. We know that facing foreclosure can make the process of filing for a divorce that much more stressful, and our team is here to guide you through everything you need to know. To schedule a consultation with our Illinois divorce attorneys serving Naperville and surrounding areas, please call us today at Fay, Farrow & Associates, P.C. or send us an email using the form found on our website.