No matter how you twist and turn it, starting over after a divorce is not easy. Not only will be the assets divided but also the liabilities most of the time. Many times, it will hit a woman much harder than a man. Traditionally the man is the one who holds all the credit because traditionally they are the “bread winners” of the household. This does not hold true 100% of the time but it is close to 95% of the time.

I thought of putting together a several part blog post that gives ideas and personal insights on how you might “Face the financial aftermath after a divorce”. First, let me advise you that I am not an attorney and all this information given is not to be taken as legal advice. This is just for informational purposes and some personal experience as well.

During the divorce you need to have an honest and truthful conversation with your attorney. The one thing you need to honestly think about is the Real Estate that might be involved. You need to be truthful to yourself. When you want to be the one to keep the Real Estate, can you really afford the payment after the divorce? When there is only one income before the divorce, and you are the one who is not working, but you want to keep the house, you need to truly face the facts that you need to pay for the mortgage at one point in time. When there is no income, or not enough income, and the mortgage is based on past income that may have been higher, there may not be a way for you to afford the house.

Just because one party signs the deed over to the other party, as part of the divorce agreement, does not mean that this will relieve that person from their mortgage payment responsibility. Even when the party that wants to keep the house agrees to make the mortgage payment on time, as soon they default on the mortgage payments, the mortgage servicer will call on both of you to satisfy the amount due.

Rather than signing the deed over to the other party, consider having the other party refinance the house before the divorce is finalized. This will ensure that your name is off the mortgage paperwork and when the other party defaults, you don’t have to worry about getting any calls from the mortgage servicers demanding money. When the other party cannot afford to refinance the Real Estate consider selling it to make certain you are no longer responsible for a mortgage payment of Real Estate you no longer have control over.

Also, even if your name is not on the mortgage you may still own part of the Real Estate equity. Make sure you discuss this with your attorney during your consultation. When you are eligible to receive Real Estate equity out of the Real Estate when it is sold, there are several ways to accomplish the payment before or after the divorce is final.

One way it can be accomplished is have the other party refinance the Real Estate and make payment in full before the divorce is finalized. The other way is to have the attorneys draw up a note that becomes due at a certain point and make this part of the divorce papers. After the divorce, either you or your attorney should consider filing the note as a lean against the property. This will ensure that when the property is sold you will receive a check, or when something else happens to the property, you will be notified.

When you are facing divorce and looking for help with your Real Estate needs feel free to contact the Settles Team.