What can you do when your ex-spouse tells you they refuse to contribute to the mortgage?
It is unfortunately all too common during separation and property settlements that one spouse either cannot continue to pay their share of the mortgage, or they outright refuse to do so.
Understanding Joint Mortgage Liability
When a mortgage is in both names, both parties remain legally responsible for the full payment. This means that if your spouse is not paying their share, you need to take action as the lender will hold you liable. Missed payments can:
- Damage both parties’ credit scores
- Risk foreclosure
- Create long-term financial consequences
Even if you move out, you are responsible for the repayments as long as your name remains listed on the loan.
Similarly, if you move out of the property prior to a property settlement, you are still entitled to your share of the property – you do not lose your entitlement simply because you have moved out.
Recommended initial steps
- Document all missed payments
- Communicate in writing with your ex about the mortgage payments
- Contact your mortgage lender or bank to discuss options – most banks have a ‘financial hardship’ team and family violence assistance team
What can a lender do if you are behind on your mortgage?
While lenders do have to follow specific steps before they can take your home, the consequences are significant.
1. Default notice
Your lender can send you a ‘default notice’ on the very day your repayment becomes overdue. However, they may wait until your repayment is 90 days or more overdue. The default notice will give you 30 days to make up the payments plus the regular repayment on your loan. You can still apply for a hardship variation at this stage.
2. After the 30-day default period
Your lender can serve you with a ‘Statement of Claim’ or a summons. This is the start of legal action against you to claim the entire amount of your home loan.
You have a set number of days to file a defence or lodge a dispute with a dispute resolution scheme.
If you do nothing, your lender can take action to repossess your home.
Contact us if you receive a Statement of Claim or summons.
3. Eviction
If your lender gets a court order to repossess your home, they will send you a Notice to Vacate or a Sheriff’s letter. Your lender may also get a Warrant for Possession. A sheriff (or bailiff) will come to your home, evict you from the premises, and change the locks.
This does not release you from the obligation to pay your loan. Your lender may sell your home and recover any outstanding balance by taking further legal action. This can include making a claim to sell your other assets.
What are your options with your ex?
Some options might include:
- Agree with your ex to continue to pay the mortgage together until you can agree to a property settlement on a final basis.
- Agreeing with your ex to put the house on the market as soon as possible and informing your bank – the bank may be more lenient with late payments if they know they will receive their fees in the short term upon sale
- Agree with your ex for one of you to buy the other person out (if they can afford it)
If you cannot agree, you may decide to make an application to the Court to seek either:
- You buy the other person’s share of the property (and subsequently refinance the mortgage into your name)
- The property be sold to a third party
- The other person pays the majority of the mortgage repayments in the short term pending a property settlement (if they are the higher income earner).
RAMSDEN FAMILY LAW – HOW WE CAN HELP
If you face such a situation, consult our experienced family law specialists at Ramsden Family Law. We are here to provide you with the necessary legal support and guidance to protect your family’s best interests during this challenging time.
Our team of dedicated family law specialists brings extensive experience to the table. We understand the nuances of family law cases involving property settlement and joint mortgage liability. We offer comprehensive legal support tailored to your specific situation.
Every family law matter is unique. We provide customised solutions and legal strategies tailored to your specific circumstances. Ramsden Family Law has a strong track record of successfully handling family law cases, including those involving property settlement disputes.
If you are facing family law challenges related to joint mortgage liability, do not hesitate to contact Ramsden Family Law today. Your family’s future is our priority, and we are here to provide the guidance and support you need.
The content of this article is intended to provide general guidance to the subject matter and must not be relied on as legal advice. Specific advice should be sought about your circumstances.
Posted in: Property
January 29 2025