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Important divorce task: Figure out who pays the mortgage

We have written extensively on this blog about how divorces in Texas impact property division -- and how in many cases, the largest asset a couple has is their house. In past posts, we have talked about how if one person or the other has entered the marriage with specific debts, those debts will remain with that person after the marriage unless the other person elects to take them on as well.

However, in many cases, a house is something purchased as a couple. So too, frequently, are automobiles. But what happens if a couple gets divorced? In many cases, without the proper legal guidance, a couple might take it for granted that responsibilities for assets such as homes or cars need to be documented.

As one mortgage broker puts it, the end of a marriage is also the termination of a business relationship. It should be noted on the divorce decree as to who is responsible for paying the mortgage and car payments.

It is probably best for the party that is keeping the home to refinance it in order to remove the other spouse's name from the mortgage. The only ways to have a name removed from a mortgage, other than death, are to pay off the mortgage in cash -- not realistic for most people going through a divorce -- or to refinance in one person's name.

Of course, every situation is different. People in the Dallas area who are considering going through a divorce ought to be aware of their financial options and responsibilities in advance of taking any action.

Source: Summit Daily News, "Financial Facts: How divorce affects your mortgage," Bob Kieber, April 13, 2013

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