Should I let my spouse keep the house?

Illinois spouses who are getting divorced should learn how to protect themselves and their credit before they agree to let their partner keep the marital home.

It is not uncommon for a marital home to be the single biggest asset that a Missouri, Illinois, Kansas and Oklahoma couple has. A home can also be something to which people assign a lot of emotional value. When the spouses end up making the choice to get divorced, it only stands to reason that the decision about what to do with the house can be complicated.

Selling the home is a common scenario

Most people know someone who has gotten divorced and sold their home in the process. This tends to be perhaps the most common decision about how to deal with a home in a divorce and there are some good reasons for this according to Bankrate.

Homes and mortgages

One of the reasons that couples often sell a home in a divorce is based on how banks look at houses and mortgages. In the eyes of a lender, these are two distinct things. This means that even if a divorce decree stipulates that one spouse will keep the house and is responsible for the upkeep and mortgage on the property but the original joint loan remains in place, both people can be liable for the debt.

The Mortgage Reports indicates that even if one spouse agrees to sign a quit claim deed that assigns full ownership of a property to their former spouse, both parties can be pursued for payment if the joint mortgage remains untouched.

Negative credit implications

If one spouse keeps the family home and the existing mortgage stays in place, the other spouse puts themselves and their credit score in a vulnerable position. If the person who keeps the house fails to make a payment or is late on any payment, the bank may report the negative actions on both parties' credit reports.

If a property eventually goes into foreclosure, that will also be reported against both parties.

Refinancing or obtaining a new mortgage

The only way to fully absolve oneself of financial liability for a home is for the person who keeps the property to obtain a new mortgage in their name only or to petition the bank for a refinance into a solo mortgage.

It can be a challenge for a newly divorced person to qualify for a mortgage in some cases, especially as credit generally takes a hit during a divorce and overall household income can drop significantly.

Legal advice is important

With a person's financial future potentially on the line, it is recommended that anyone deciding whether or not to let their spouse keep a home in a divorce speak with an experienced attorney in Illinois before making a final determination.