What Happens to the Family House After Divorce?
Divorce proceedings typically drag on because of the complications related to financial and asset settlement. One of the primary considerations for divorcing couples is how to handle an ongoing mortgage payment. The usual arrangement for most mortgage loans is a joint obligation which means that both parties have equal liability to pay off the debt. Thus, defaulting on a mortgage loan will lead to negative credit for both you and your partner.
Work out an arrangement with the bank
Policies on payment default and extensions vary from one bank to another. The moment you and your partner begin divorce proceedings, contact your bank to notify them that there is a possibility of not being able to make payments on time. Although there is no assurance, some banks may offer a payment holiday until the finality of the divorce leads to a long-term solution.
Getting the right legal advice
Family law solicitors are experts in handling matters involving divorce and associated proceedings including child custody and asset settlement. They can also provide you with the necessary assistance in determining what will happen to mortgage obligations after the divorce reaches an absolute decree. In situations when the couple decides to sell the property, supplemental legal assistance from a conveyancing solicitor may be necessary on a case to case basis.
Different types of property order resulting from divorce
In general, there is no specific rule on what happens to a home after divorce. One of the most critical factors that have a significant impact on the court's decision is whether or not there are children. The law specifically provides for the protection and welfare of young children impacted by a separation.
As such, the natural solution is to ensure that children are secure in a home where they can continue their normal lives in the most reasonable way possible. Therefore, the person who retains custody of the children gets awarded the house as well.
Nevertheless, even if the other party does not retain ownership of the home, it does not exempt him or her from the mortgage. Various property arrangements can ensue concerning the financial implications of owning a property, which the courts finalise through a property order.
One possible scenario is permitting one of the parties to live in the house to care for the children up to a designated time, such as when all the children have reached the age of majority. At which point, the property will be up for sale with the proceeds divided according to the specifications of the Property Order.