Navigating a divorce is already a complex and emotionally charged process. When the threat of foreclosure enters the equation, the stakes become even higher — impacting not just your financial future, but also your credit, housing stability, and long-term well-being. At Hobson & Hobson, P.C., we leverage over 30 years of combined experience and innovative legal strategies to help clients in Atlanta and surrounding areas understand and address the unique challenges of foreclosure during divorce.
Understanding Foreclosure During Divorce
When a marital home faces foreclosure during divorce, both spouses — regardless of who resides in the property — are at risk. If both names are on the mortgage, both parties remain legally responsible for the debt until the mortgage is satisfied or refinanced. This means:
- Both spouses’ credit scores can be severely damaged
- Foreclosure will appear on both credit reports
- Future borrowing ability may be impaired for years
- Both may face deficiency judgments if the home sells for less than the mortgage balance
In Georgia, most foreclosures are nonjudicial, allowing lenders to proceed quickly and with fewer court requirements. Under federal law, foreclosure generally cannot begin until a borrower is more than 120 days behind on payments, providing a critical window for negotiation or intervention (Consumer Financial Protection Bureau).
Key Legal and Financial Implications
Division of Debt and Property
Georgia is an equitable distribution state, meaning marital assets and debts are divided fairly, though not always equally. The marital home is often the largest asset — and liability — in a divorce. If foreclosure is imminent, the court may:
- Order the sale of the home, even if one spouse objects
- Assign responsibility for the mortgage in the divorce decree
- Allow the custodial parent to remain temporarily for the children’s stability, but still order a future sale
If your ex lets the house go into foreclosure, both parties’ credit and finances are affected unless the mortgage is refinanced or the property is sold.
Impact on Credit and Future Finances
A foreclosure can lower your credit score by 100 points or more and remain on your credit report for up to seven years (Experian). This can make it difficult to:
- Qualify for new mortgages (often a 3-7 year waiting period)
- Secure favorable interest rates on loans
- Rent homes, as many landlords check credit history
There may also be tax consequences if the lender forgives any remaining mortgage debt, which could be considered taxable income (IRS – Foreclosure & Repossession).
What If Your Ex Lets the House Go Into Foreclosure?
It’s not uncommon for one spouse to stop making payments on a jointly-held mortgage during or after divorce, either intentionally or due to financial hardship. If this happens:
- Document all communications and payment arrangements
- Contact your lender immediately to explain the situation and explore hardship or loss mitigation programs
- Consult your divorce attorney about enforcing the divorce decree if your ex was assigned payment responsibility
- Consider mediation or court intervention if necessary
If you’re worried, “what happens if house goes into foreclosure during divorce?” — the answer is that both parties are at risk unless proactive steps are taken.
Options to Avoid Foreclosure During Divorce
1. Selling the Home
If neither spouse can afford the mortgage, selling the home — either through a traditional sale or a short sale if the mortgage is underwater — is often the best option. This can help both parties avoid foreclosure and minimize credit damage.
2. Refinancing
If one spouse wishes to keep the home, they may buy out the other’s equity and refinance the mortgage in their own name. This removes the other spouse from liability and can provide stability, especially for children.
3. Deed in Lieu of Foreclosure
If selling isn’t possible, a deed in lieu of foreclosure allows you to voluntarily transfer ownership to the lender, potentially avoiding some of the negative credit impacts of foreclosure.
4. Loan Modification or Forbearance
Some lenders offer loan modification or forbearance programs, especially in cases of divorce or hardship. Acting within the 120-day pre-foreclosure window is critical.
5. Court-Ordered Sale
Georgia courts have broad authority to order the sale of marital property if it’s the fairest option — especially if neither spouse can afford the home or if foreclosure is imminent.
Georgia-Specific Considerations
Georgia’s nonjudicial foreclosure process is fast — sometimes as little as 37 days from notice to sale (Georgia Legal Aid). This makes it essential to act quickly if you’re facing both divorce and foreclosure.
Judges may allow the custodial parent to remain in the home temporarily for the children’s benefit, but this does not prevent eventual sale or foreclosure if payments are not maintained.
How Hobson & Hobson, P.C. Can Help
Our team at Hobson & Hobson, P.C. combines deep experience in family law with a forward-thinking, technology-driven approach. We help clients:
- Negotiate with lenders for forbearance, modification, or short sale approval
- Draft clear divorce decrees that specify property and payment responsibilities
- Enforce court orders if your ex lets the house go into foreclosure
- Coordinate with financial advisors to minimize credit and tax consequences
- Advocate aggressively in court if necessary to protect your interests
We understand the urgency and complexity of these situations and are committed to providing clear, actionable guidance every step of the way.
Practical Steps and Professional Advice
- Act quickly — the earlier you address foreclosure risk, the more options you have.
- Communicate with your lender — many offer programs for divorcing homeowners.
- Document everything — keep records of payments, communications, and agreements.
- Avoid predatory “bailout” loans — these often worsen financial problems.
- Seek professional guidance — HUD-approved housing counselors and experienced family law attorneys can provide invaluable support (HUD Housing Counselors).
Frequently Asked Questions
What happens if my ex lets the house go into foreclosure during divorce?
If your ex stops making payments on a jointly-held mortgage, both of your credit scores and financial futures are at risk. You may need to return to court to enforce the divorce decree or seek other remedies. Contact your lender and attorney immediately.
Can the court force us to sell the house in a Georgia divorce?
Yes. Georgia judges can order the sale of marital property, including the family home, if it is the fairest way to divide assets or if neither party can afford the mortgage.
How does foreclosure during divorce affect my credit?
Foreclosure can lower your credit score by 100 points or more and remain on your credit report for up to seven years, making it harder to buy or rent a home in the future.
What are my options if I can’t afford the mortgage after divorce?
Options include selling the home, negotiating a short sale, seeking a deed in lieu of foreclosure, or applying for loan modification or forbearance. Consulting with a family law attorney can help you determine the best course of action.
How can a family law attorney help if foreclosure is imminent?
An experienced attorney can negotiate with lenders, ensure your divorce decree is enforceable, represent you in court, and coordinate with financial professionals to protect your interests.
Facing foreclosure during divorce is daunting, but you don’t have to navigate it alone. At Hobson & Hobson, P.C., we combine empathy, innovation, and aggressive advocacy to help you protect your rights and financial future. Contact us today for a consultation and let us help you make the best legal decisions during this challenging time.
For more information, visit Hobson & Hobson, P.C..
References & Further Reading:
- Consumer Financial Protection Bureau: Foreclosure
- Georgia Legal Aid: Foreclosure in Georgia
- Experian: The Impact of Foreclosure on Your Credit
- IRS: Foreclosure & Repossession
- HUD: Housing Counseling
Attorney Sarah Hobson at Hobson and Hobson, P.C. are powerful advocates for those who fight for better futures for those going through divorce and custody law matters.