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How to handle the marital home in a divorce

Couples who own a home together and are divorcing or separating in Texas might need to consider how to handle the property during proceedings. In many cases, one spouse stays in the home and the other moves out. However, this process might not be as simple as some people think it is. According to a recent article, a divorce that awards the home to one party might not remove the other party's liability for the mortgage.

The article suggests that both parties are still held liable for payments because they entered the mortgage jointly. This means that the credit score of the individual who no longer lives in the home might be affected by the financial decisions of the other person. For example, the homeowner's failure to maintain the monthly payments might result in a decrease in the other party's score because the credit rating companies still believe that the other party is liable. However, that individual's name can be taken off the debt if the mortgage is refinanced.

If the divorce has not been finalized and one party is still seeking to buy a new home, an extra step might need to be taken to avoid giving the other party interest in the new property. Avoiding joint interest requires the signing of a quitclaim deed, which provides a release of the signatory's stake in the purchase of the home even though the couple is still legally a joint entity.

Property division can be a difficult hurdle people must overcome before getting a fresh start after divorce. An attorney could help individuals who are seeking a divorce understand the different steps that they might have to take to fully separate their finances from a former spouse.

Source: Credit.com, "How to Divide Your House in a Divorce", Scott Sheldon, July 09, 2014

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Bruce Turner

In addition to his law degree, Bruce Turner has a master's degree in tax law and is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization.

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