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After divorce, who is responsible for the mortgage?

When a couple, whether in Maryland or elsewhere, chooses to go their separate ways and comes to terms on asset division, those terms are documented in a final divorce settlement. One might think this means that one is released from any financial obligation toward an asset that has been awarded to the other party -- such as a mortgage. Unfortunately, the terms of divorce are only between ex-spouses.

Mortgages are most often signed by both spouses unless, of course, the property belonged to one of them before the marriage. Because of this, the simple truth is that lenders will continue to hold both signers accountable for paying back the money borrowed. What is written in a divorce settlement may only offer very limited protection in regard to creditor claims.

So, what happens if the spouse granted the home fails to make mortgage payments? The lender may pursue a judgment against both signers, regardless of what is stated in a divorce agreement. While there may be little that can be done to fight that judgment, one may be able to go back to family court to have the terms of the divorce agreement upheld. For example, if a settlement states that one spouse will be solely responsible for the mortgage, he or she may be held in contempt for failure to abide by the settlement terms. In doing this, the individual that was not awarded the home may be able to recoup any losses experienced as the result of having to pay a deficiency judgment, which typically arises when the amount owed exceeds the sale price of the home in foreclosure.

What is included in a divorce settlement and how it is worded can have long lasting consequences. This is particularly true when dealing with the financial side of marriage dissolution. With the assistance of legal counsel, divorcing couples in Maryland can ensure that the proper protections for their specific situations have been put in place before their divorces are finalized.

Source:, "Mortgage trumps divorce agreement", Tom Resnick, July 10, 2016

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