Although an Illinois divorce can understandably be difficult emotionally, it can also be tough to navigate financially. One area that often causes contention during a divorce is the marital home. Approaching the mortgage in a financially sound manner may help each divorcing party to leave the marriage on the right financial foot.
The parties may simply agree to sell their marital home and then split the proceeds between the two of them. This is particularly wise if there is a large amount of equity in the home. However, sometimes two divorcing individuals simply cannot afford to sell the home because they owe more than what the home is worth.
If selling the marital home on the open market is not an option, the parties can consider short selling the home for an amount less than what is due on the mortgage. This process, which will require the approval of the lender, does affect people’s credit scores and has tax implications, however. It may also be possible to rent out the house. The couple could even decide to continue living together until the residential real estate market goes up enough to make selling the home worthwhile.
The divorce process in Illinois can quickly become complicated, particularly when high-value assets, such as homes, are involved. If two people are willing to try to find common ground during this type of family law proceeding, divorce negotiation or mediation may be helpful for reaching a mutually beneficial settlement. If the two parties cannot see eye to eye, however, a judge will have to make any remaining financial decisions for them.
Source: time.com, “What Happens to Your Mortgage in a Divorce?“, Ashley Eneriz, March 29, 2016