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My Ex-Husband Wants to Give Me the House. He Can’t Afford the Payments. – Kelly

“Dear Steve,

Ex and I divorced last year. I left him the house but the judge did tell us the decree did not relieve me of the mortgage responsibility. Unfortunately he was not able to refi because of his current income.

Called me last week to ask if I’d like the house back because he cannot afford it any longer and wants something cheaper. He is current on house payments. And like most people it has depreciated. It has not been listed, so no potential buyers. I don’t want the house, but I know any other option he decides is going to slay my credit.

Do I have any other option to save my credit, and remove my name without taking the house back? If not, what other options do we have as far as selling/giving back the house and how would that affect my credit?

Thank you kindly!

Kelly”

Dear Kelly,

Ouch. Your options are limited. You can take over the mortgage and make the payments or attempt a short sale with your lender and get them to not go after you for the debt forgiven from lowering the sales price.

Many people have decided they can neither sell the home or the bank won’t accept a short sale situation. In that case you’d be left with a deed in lieu of foreclosure or just flat out handing the house back to the bank. That’s going to leave a mark.

Banks have no obligation to modify any mortgage or reduce any amount that you owe. They also will not release any party from the note unless the mortgage is qualified for again and refinanced. Since the property has depreciated it might be worth less than the amount owe on it. In that case refinancing is most likely not possible.

If you hand the house back to the bank, unless they agree otherwise, they will come after the current mortgage holders for the balance due after foreclosing on the house. People can deal with this by including that debt in bankruptcy and discharging it. If you decide you might do that, click here to find a local bankruptcy attorney first and discuss the timing and approach with them before you do anything.

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Please post your responses and follow-up messages to me on this in the comments section below.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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