Getting a divorce involves a lot of decisions, from who gets child custody to the division of assets. As any attorney will tell you, one of the most contentious choices that spouses must make is who will get the family home. When it comes to this pricey possession, you may decide that the person who will continue to live there will take over the mortgage. Refinancing related to divorce is not always straightforward, however.

Why Refinancing Needs to Be Formalized

The easiest option is usually for the spouse who is giving up their rights to the family home to file a so-called quitclaim deed. The spouse who remains must then refinance the mortgage solely in their name. Legally, however, they are not obligated to do this unless the divorce decree specifies that they must.

This is why it’s so important to address mortgage refinancing with an attorney from the start. You do not want to reach an informal agreement on the topic only to discover that your ex never changed the mortgage paperwork. If it’s in the divorce decree, they will experience consequences for failing to refinance; a judge can fine them for contempt of court and even issue jail time.

What to Do When Refinancing Isn’t Possible

Unfortunately, even when both persons involved in the divorce agree to refinance the home, this isn’t always possible. Say, for instance, the spouse staying in the family home has bad credit. They may not qualify for a loan and the bank has the right to refuse their mortgage application.

The courts can’t force the banks to approve a loan based on a divorce decree—so it’s time to look at other options. You may choose to sell the house and share the money this brings or, if this isn’t possible, to split the remaining debt. Whatever arrangement you agree on, always get the details down in the divorce paperwork.

Need an attorney to help with your divorce? Look to Lacy Katzen LLP of Rochester, NY. This law firm is known for compassionate professionals and the personalized attention they provide each case. Their self-proclaimed “passion for people” underscores all of their client relationships. Find out more about practice areas, from estate planning to nursing home neglect, online. For an appointment with an attorney, call (585) 454-5650.