Even after a New Jersey couple obtains a divorce, they may find themselves to still be involved financially. Property obtained during the marriage is assumed to be the joint property of both spouses, and this includes assets such as houses that often carry with them long-term debt.
If a home is purchased during the time of a marriage, then it is owned by both spouses, regardless of whose name may be on the title. If the couple divorces, then it will divided according to the property settlement portion of the divorce agreement. However, any liens or loans that are taken out against the property will also be the responsibility of both individuals, and an interruption of scheduled payments or other failure of loan obligations can affect both parties regardless of the distribution of the actual house.
One way to prevent liability for a house that has gone to a departed partner is to refinance the home solely in the name of the retaining partner at the time of the divorce. This can have the additional benefit of providing funds to equalize the property distribution. The partner who keeps the home refinances at the current market rate and buys the other partner out according to the divorce settlement. Under certain circumstances, it can also be a good idea to gift money to one spouse in order to comply with the divorce agreement.
The assistance of an attorney can be beneficial for those who wish to craft a divorce settlement and complete the property distribution under all applicable New Jersey laws. They can also help by contacting lending organizations and making sure that the divorce decree is known to them so that they can remove erroneous information from their reports to credit agencies and collection attempts.
Source: Credit.com, “How to Divide Your House in a Divorce”, Scott Sheldon, July 09, 2014