When one spouse takes out a mortgage or loan secured by marital property without the other spouse’s participation, a specific set of considerations arises during dissolution of marriage proceedings. This situation often involves dividing property and debts acquired during the marriage. For example, if a husband obtains a home equity loan solely in his name during the marriage, the wife, though not legally obligated to the lender, may have her share of the marital estate affected during the divorce.
The relevance of such arrangements lies in the potential impact on marital asset division and spousal support determinations. Courts must equitably, or in some cases equally, distribute marital property, including both assets and liabilities. The presence of debt incurred by only one spouse necessitates careful examination of its origin, purpose, and benefit to the marital estate. Historically, the handling of these situations has evolved, with courts increasingly focusing on fairness and economic realities rather than strict adherence to the name on the loan documents.
