Divorcing spouses in Mississippi who are attempting to come to an equitable division of marital property often find themselves facing financial challenges and difficult decisions. Ownership of the marital home is frequently an issue that presents some relatively complex legal issues.

Spouses may agree upon ownership and transfer title to the property from both spouses to one spouse as part of the divorce settlement. However, mortgage lenders are not required to honor the terms of a divorce agreement. The relinquishing spouse is still responsible for mortgage payments under the loan agreement, even after ownership has been transferred.

This manner of property transfer in a divorce proceeding is legal, but it has no effect on the existing mortgage loan. Selling the home or refinancing in the name of one spouse is usually required to remove one person’s name from the loan. Even though some divorce decrees may set forth requirements regarding future mortgage payments, mortgage companies are not parties to the divorce and are not bound by such provisions. However, the relinquishing spouse may rely upon such provisions to seek recovery and enforcement of obligations in court.

Divorce litigation presents unique stresses and financial challenges for divorcing couples. In Mississippi’s current economy, these struggles may be even more difficult to overcome. Bankruptcy may offer a viable solution for persons who are facing overwhelming debt and unmanageable financial struggles as a result of a divorce. Under the protections offered by Chapter 7 bankruptcy, a person is no longer responsible for debt protected by the bankruptcy proceeding. This can include both secured debt such as mortgages and unsecured debt such as credit cards and medical bills. Chapter 7 bankruptcy protection can stop wage garnishments and creditor harassment and allow for a fresh financial start.

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