Liability for Mortgage Payments

When a court or a marital settlement agreement gives the entire interest in the house to one spouse and makes that spouse responsible for paying future mortgage payments, that does not mean the spouse who moves out is no longer potentially liable for the mortgage. Banks and other lending institutions are very reluctant to give up the security of having more than one person responsible for the loan. The spouse who moved out still is responsible for the loan in the event the other spouse does not pay the mortgage. The legal remedy for the spouse who moved out is a hold harmless provision. That means that if the spouse who moved out is obliged to pay a loan that the other spouse was supposed to pay, then the spouse who moved out can collect the loss from the spouse who has the house. The spouse who moved out can sue his or her former partner for any lost funds. Assuming the house has a positive net worth, the court could order the house sold in order to pay back the spouse who moved out.