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Dealing with Foreclosure During a Divorce in Connecticut

Married couples who purchase a home usually obtain the mortgage and property title jointly, so the deed is in both their names. This can make dividing the property complicated in a divorce, as a house is not something that can be physically split down the middle. Further complexities arise if foreclosure is imminent.

If neither you nor your ex-spouse wishes to keep the home and you need to avoid foreclosure, you have several options, including the following:

  • Sell the house — The easiest and most obvious step to take is to sell the home to someone who wants to buy it. If you’re underwater on the mortgage, however, it may be very difficult to find a buyer.
  • Short sale — This involves selling the home for less than what you owe on it, with the lender taking the proceeds. In some cases, the lender may agree to forgive the rest of the debt.
  • Deed in lieu of foreclosure — With this agreement, the lender assumes ownership of the deed rather than foreclosing on the property. It must explicitly state that the transaction completely satisfies the debt.
  • Rent the house — One way to earn the income to make mortgage payments is to rent out your house. However, both spouses remain responsible for the property and must continue to maintain it.

If one spouse wishes to keep the house, that person needs to assume sole responsibility for the mortgage and continue making payments. He or she may refinance the mortgage or seek a loan modification, which adjusts monthly payments to make them more affordable.

To learn more about your options for avoiding foreclosure as you’re going through a divorce, consult an experienced Connecticut family law attorney.

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