Key Takeaways
Divorce creates immediate uncertainty about mortgage obligations—and the stakes are high. Missed payments during a California divorce can damage both spouses’ credit scores within 30 days and put your home at risk of foreclosure, regardless of who filed for divorce or who moved out.
- Both spouses are jointly responsible for the mortgage payments, regardless of who lives in the home after the divorce. Even if one person wants to stop paying or is no longer living in the home, both persons may remain legally liable for the mortgage until the obligation is resolved.
- The lender does not care about your divorce. Even if only one person’s name is on the mortgage, both may be responsible for payments until the loan is refinanced, paid off, or the home is sold. A divorce decree cannot change your contract with the bank.
- Selling the home is often the easiest way to sever financial ties between divorcing spouses. This option can eliminate ongoing joint liability and simplify the division of assets.
- California’s community property rules and Automatic Temporary Restraining Orders (ATROs) heavily influence who pays the mortgage while the divorce is pending. Violating ATROs by unilaterally stopping mortgage payments can result in contempt findings and reimbursement orders.
- Los Angeles County courts frequently issue temporary orders specifying who must pay the mortgage during the case, and judges can later adjust the final property division to account for one spouse’s extra contributions or the other spouse’s free use of the home.
- As a Certified Family Law Specialist and licensed CPA, I help clients understand both the legal framework and the financial realities of mortgage decisions during divorce—from calculating community vs. separate contributions to projecting how different settlement structures affect future borrowing capacity.
Introduction: Why Mortgage Payments Become Critical in a California Divorce
Consider this scenario: A Los Angeles couple separating in 2025 owns a Koreatown condo with an $850,000 mortgage. Interest rates have climbed above 7%, making refinancing uncertain. Neither spouse is sure who should keep paying the mortgage—or whether they can afford to.
In California divorce cases, the marital home is usually the largest asset, and the existing mortgage is often the largest debt. Proceeds from the sale or refinancing of the home are often a central issue in dividing the financial equity between spouses. The decisions you make about mortgage payments in the early weeks of your case can shape your credit history, your negotiating position, and your financial future for years to come.
Here’s what many people don’t realize: “who writes the check each month,” “who is legally liable to the bank,” and “who gets credit or reimbursement at the end of the case” are three different but related questions. The divorce process must address all three.
This article focuses on California law, with particular attention to Los Angeles County cases. Your specific solutions will depend on your loan terms, how the title is held, each party’s income, and what the court orders. I should also note that California Civil Code Section 2951, effective for loans originated on or after January 1, 2027, will change some refinance and buyout options—but divorces filed now must use existing tools.
How California Community Property Law Affects Mortgage Responsibility
California is a community property state. California is one of the few states that follow community property rules, meaning most assets acquired during marriage belong equally to both spouses. This means most assets and debts acquired between the date of marriage and date of separation are presumed to belong equally to both spouses.
When a married couple purchases a house during their marriage, both the home and its mortgage are generally treated as community property and community debts—regardless of which spouse’s name or one person’s name appears on the loan documents or the deed. Even if the property or mortgage is held in one spouse’s name only, community property rules may still apply, and both spouses may have an interest in the property or responsibility for the mortgage. Even if only one spouse signed the promissory note, the court can still treat the mortgage as a community obligation when dividing property at judgment.
Key community property concepts to understand:
Concept | What It Means |
|---|---|
Community Property | Assets/debts acquired during marriage with community funds |
Separate Property | Assets owned before marriage or received as gifts/inheritance |
Community Debt | Obligations incurred during marriage for community benefit |
Reimbursement Rights | Credits owed when one type of funds pays for another type’s benefit |
Here’s a simple example: A home bought in 2012 during marriage in Los Angeles, titled in both names with both spouses on the mortgage, is straightforward community property. Both parties share the equity and both remain jointly responsible for the mortgage, absent a valid written agreement like a prenuptial or postnuptial agreement.
Things get more complex when community earnings are used to pay down a mortgage on a separately owned home. If one spouse owned the property before marriage but community funds made mortgage payments for years, the community may have acquired an equity interest—what family lawyers call a Moore/Marsden situation. These reimbursement claims require careful tracing.
Who Pays the Mortgage While the Divorce Is Pending?
Until the mortgage is paid off or refinanced, each person named on the loan remains fully liable to the mortgage lender. Both spouses are typically jointly responsible for mortgage payments during a divorce, regardless of who lives in the home. This is true regardless of what temporary court orders say or what you and your spouse agree to between yourselves.
When you file for divorce in California, Automatic Temporary Restraining Orders immediately take effect under Family Code section 2040. These ATROs specifically prohibit either spouse from failing to pay community debts, such as the mortgage, without the other spouse’s written consent or a court order. Violating ATROs can result in contempt findings, sanctions, and adverse effects on your final property division.
How Los Angeles County courts typically handle mortgage payments early in a case:
- The spouse remaining in the primary residence may be ordered to make the payment
- Payments may be split between both spouses
- Temporary spousal support or child support may be structured so one spouse can afford the payment
- The court may order both parties to contribute based on their respective incomes
Example: One spouse moves out of a Sherman Oaks home while the other stays with the children. The court orders the in-home spouse to make the full mortgage payment from their income and the support they receive. The out-of-home spouse pays guideline child support. At the end of the case, the court will account for who paid what when dividing the equity.
Voluntary arrangements between spouses are absolutely possible—and often preferable to costly court hearings. However, such an agreement should be documented in writing or formalized by a court order. Without documentation, you may later face disputes over credits and reimbursements that are difficult to resolve.
Can One Spouse Stop Paying the Mortgage During a California Divorce?
Let me be direct: unilaterally deciding to stop paying the mortgage during a pending divorce is almost always a mistake.
If one person stops paying the mortgage, it can violate ATROs, damage both spouses’ credit, and create a very negative impression with the judge. Even if you believe the other spouse should be paying, taking matters into your own hands by refusing to pay can backfire significantly.
Divorce courts cannot rewrite your mortgage agreement with the bank. The court can only decide how you and your spouse must share responsibilities and reimbursements between yourselves. The lender operates independently of your divorce judgment. Even if a divorce decree assigns the mortgage payment to one spouse, the bank still holds both persons liable if the loan remains in both names.
Consequences of stopped or missed payments:
- Late fees and default notices from the lender
- Foreclosure risk that threatens both parties’ equity
- Credit score drops of 100-200 points for both borrowers
- Potential liability for “waste” of community assets
- Contempt findings if payments stop in violation of court orders
- Reduced ability to qualify for future loans or housing
Even if you’ve moved out and your name isn’t on title, if your name is on the mortgage loan, missed payments will appear on your credit report. The three major credit bureaus don’t care about your divorce settlement—they report what the lender tells them.
In most cases, the better strategy is to seek a quick temporary order or reach a negotiated separation agreement rather than using the mortgage as leverage or retaliation. The short-term satisfaction of refusing to pay rarely outweighs the long-term financial harm.
How Courts Decide Who Ultimately Bears the Mortgage After the Divorce
The “final answer” to who pays the mortgage appears in the Judgment of Dissolution—your final divorce decree. This document decides who keeps the home (if anyone) and how the loan will be handled going forward.
Common outcomes at divorce judgment:
Outcome | How It Works |
|---|---|
One spouse keeps home, refinances | Spouse awarded the home must refinance within specified timeframe (typically 6-12 months) to remove the other spouse from the loan. If the mortgage or title is in one person’s name, refinancing is often required to ensure only the responsible party remains liable for the loan. |
Home sold, proceeds divided | Property listed and sold; mortgage paid from sale proceeds; remaining equity divided per agreement or court order |
Structured buyout | One spouse buys out the other’s equity interest over time with deferred refinance deadline |
Continued co-ownership | Rare, but sometimes ordered when children’s best interests favor stability |
Los Angeles judges typically require concrete timelines for refinance or sale. If refinance isn’t realistic due to income limitations, debt-to-income ratios, or credit issues, the court may order the home sold. If one spouse is awarded the home, they may need to refinance the mortgage to remove the other spouse’s name from the loan, especially when the original mortgage was in both parties’ names or only one person’s name.
Credits and reimbursements matter at this stage. If one spouse carried most of the mortgage, property taxes, or insurance with their separate funds during the case, the court may award them a credit when dividing equity. This credit is often balanced against the benefit they received from using the home—sometimes called “Watts” and “Epstein” credits in California family law.
Complex cases with high equity, rental property, or homes used as a business location may need detailed financial analysis. As both a family law attorney and CPA, I regularly review amortization schedules, analyze tax deductions, and calculate fair rental value offsets to ensure my clients receive appropriate credits.
Special Situations: Mortgage in One Spouse’s Name Only or Separate Property Homes
Here’s something that surprises many clients: title documents and loan papers don’t always match the legal characterization of property under California family law. Sometimes, the title or mortgage may be in one person’s name, even though both spouses have contributed financially during the marriage.
Example: Sarah purchased a home in 2010, two years before she married David. The mortgage is in one spouse’s name only—hers. But for 12 years of marriage, both spouses’ earnings (community property) have been paying down that mortgage. Now they’re divorcing.
Even though the home remains Sarah’s separate property, the community has acquired an interest in the equity growth attributable to those community payments. This is what attorneys mean when they reference Moore/Marsden calculations or Family Code section 2640 reimbursements.
What typically happens in these cases:
- The spouse on title generally keeps the home
- They may owe the other spouse an equity share or reimbursement
- They remain solely responsible for the post-divorce mortgage (since only their name is on the loan or the property is in one person’s name)
- The community interest must be calculated by tracing payments over the marriage
- In some cases, California courts may issue a Deferred Sale Order, allowing a custodial parent to stay in the home for a set period before the property must be sold
This analysis requires reviewing old mortgage statements, bank records showing payment sources, and sometimes forensic accounting. My CPA background proves particularly valuable in these situations—I understand how to trace funds, calculate principal reduction, and apportion appreciation between separate and community interests.
Joint Accounts and Financial Obligations in a California Divorce
When navigating a divorce in California, joint accounts and shared financial obligations—especially mortgage payments—often prove among the most challenging issues to resolve. Because most married couples hold their mortgage loan and other debts jointly, both spouses remain fully responsible for paying the mortgage, regardless of who continues to live in the home or who initiated the divorce process. This joint responsibility means that missed payments can quickly damage both parties’ credit scores, create financial strain, and even put the family home at risk of foreclosure.
California’s community property laws further complicate matters. In most cases, debts such as the mortgage, credit card debt, and other community debts incurred during the marriage are considered community property and must be divided equitably in the divorce settlement. The court will look at a range of factors—including each spouse’s income, credit history, and overall financial situation—when determining how to allocate responsibility for these debts. A well-drafted separation agreement or divorce agreement, prepared with the help of a family law attorney, can clarify who is responsible for paying the mortgage and other joint accounts, helping to prevent disputes and protect both parties’ credit.
If one spouse wishes to keep the family home, they may need to refinance the existing mortgage in their own name or assume the mortgage loan, provided the lender allows it. However, this is not always possible if that spouse has insufficient income or a poor credit rating. Even if a quitclaim deed is used to transfer ownership of the property, the lender may still hold both spouses jointly responsible for the mortgage unless the loan is refinanced or otherwise satisfied. This is why it’s critical to address these issues in your divorce settlement and to work closely with a divorce attorney who understands both family law and the financial implications of mortgage agreements.
Problems can arise if one party stops paying the mortgage during or after the divorce. Not only does this risk foreclosure and loss of equity, but it can also inflict long-term damage on both parties’ credit scores. In such cases, the other spouse may need to seek a court order to enforce payment obligations or to clarify responsibility for the debt. A family law attorney can help you navigate these situations, ensuring your rights are protected and that the divorce agreement reflects the best interests of both parties.
Managing joint accounts and financial obligations during a divorce requires careful planning and clear communication. Your divorce attorney can help you negotiate a fair agreement that addresses mortgage payments, division of community debts, and the handling of joint accounts. This may involve selling the home, refinancing the mortgage, or establishing a payment plan that both parties can afford. By proactively addressing these financial ties, divorcing couples can minimize financial harm, protect their credit, and lay the groundwork for a more secure financial future.
Ultimately, the key to successfully managing joint accounts and financial obligations in a California divorce is to seek knowledgeable legal guidance, understand your rights and responsibilities, and ensure that your divorce settlement provides a clear, enforceable plan for handling all shared debts and assets. With the right support and a well-structured agreement, you can avoid costly mistakes and move forward with confidence.
Practical Options for Handling the Mortgage and House in a California Divorce
While California law sets the framework, most divorcing couples must choose among a few practical paths regarding the home and mortgage.
Option 1: Sell the home and split net proceeds
This is often the cleanest way to sever financial ties. Escrow pays off the mortgage, closing costs, and any liens. Spouses divide the money from the sale according to their divorce agreement or court order. If the proceeds exceed a certain amount, there may be tax implications related to capital gains. Neither party remains on the loan because the loan no longer exists.
Option 2: One spouse refinances and buys out the other
The spouse keeping the house must qualify for a new mortgage loan based solely on their own income and credit. Stable spousal support or child support with at least three years remaining can sometimes be counted as income by lenders. The buyout amount is typically half the equity, though this can be adjusted based on separate property contributions. The spouse buying out the other may need to pay a certain amount of money to complete the transaction, and if the buyout or refinance results in proceeds above a certain amount, there may be tax implications to consider.
Option 3: Structured buyout with deferred refinance
Sometimes immediate refinance isn’t feasible. Parties may agree to a payment plan for the buyout with a future refinance deadline. This requires careful drafting to protect the departing spouse’s interests.
Option 4: Short sale or lender negotiation
If the home is underwater or parties can’t afford payments, a short sale (selling for less than owed with lender approval) may be necessary. This damages credit but can prevent foreclosure.
Temporary co-ownership arrangements—like delaying sale until children graduate high school—require extremely clear written terms. The agreement must specify who pays the mortgage, taxes, insurance, and repairs; how equity will be divided; and exactly when and how the property will be sold or refinanced.
New Law Spotlight: California Civil Code Section 2951 (Effective 2027 and After)
For mortgage loans originated on or after January 1, 2027, California Civil Code section 2951 will give divorcing co-borrowers new tools to transfer mortgage responsibility when one spouse keeps the home.
Section 2951 requires certain qualifying lenders to allow one borrower to buy out the other’s interest and be removed from the loan, subject to specified conditions and underwriting standards. This could reduce forced sales in situations where refinancing at current market rates would strain the retaining spouse’s finances.
Important limitations:
- This statute does not decide which spouse keeps the home—that still comes from negotiation, mediation, or court orders
- The departing spouse must still meet conditions for removal
- Lenders must qualify under the statute’s requirements
- The underwriting process still applies
For divorces filed before 2027, or for loans originated before that date, couples must rely on traditional methods: refinance, sale, or lender-approved assumption. Current planning should not assume Section 2951 applies unless the loan clearly qualifies by origination date and lender type.
If you anticipate refinancing or buying out a mortgage after 2027, early strategic planning can position you better. Understanding these coming changes now helps inform settlement negotiations today.
Protecting Your Credit and Financial Future During a Divorce
Your divorce judgment does not bind your mortgage lender. The bank will pursue any borrower on the note for payment, regardless of what the family court ordered between spouses. In some cases, the court may order the higher-earning spouse to pay the mortgage as a form of temporary spousal support.
This creates real danger. If your ex spouse is ordered to pay the mortgage but stops paying, your credit rating suffers. The lender doesn’t care about your court order—they care about their loan being paid. Even if one person wants to stop paying or is no longer involved, both persons listed on the mortgage remain legally responsible, and either person’s credit can be damaged by missed payments.
Practical steps to protect yourself:
Action | Why It Matters |
|---|---|
Monitor payment status monthly | Catch missed payments before they become 60+ days late |
Set up online access to mortgage account | Transparency even if you don’t live there |
Get agreements in writing | Verbal promises don’t protect you |
Keep records of every payment you make | Essential for reimbursement claims |
Address late notices immediately | Don’t wait for your ex to handle it |
Never rely on a verbal promise from your spouse to “take care of the mortgage” while your name remains on the loan. One person’s name on the mortgage means one person’s credit at risk if payments stop—but when both names are on the loan, both parties’ credit suffers equally.
Divorce-related support orders also affect borrowing capacity. Spousal and child support payments impact debt-to-income ratios that lenders use in underwriting. My CPA experience helps clients understand how different settlement structures affect their ability to qualify for future loans—critical information if you plan to purchase a new home after your divorce.
Working with a Los Angeles Divorce Attorney Who Understands Mortgages and Numbers
Mortgage issues in divorce blend law, finance, and long-term planning. Having a divorce attorney who is also a Certified Family Law Specialist and CPA can give you a strategic advantage when real property and significant debt are at stake.
Over 27 years litigating and settling family law cases in Los Angeles County courts—Stanley Mosk, Pasadena, Long Beach, Van Nuys, and beyond—I’ve handled hundreds of cases involving high-equity homes, rental properties, and complex loan structures. I understand how to read amortization schedules, calculate community interest in separate property, and structure settlements that make financial sense.
What comprehensive representation looks like:
- Coordination with appraisers for accurate property valuation
- Analysis of separate vs. community contributions using payment records
- Review of loan documents and mortgage terms
- Design of realistic refinance or sale plans based on current lending standards
- Calculation of Watts/Epstein credits and reimbursements
- Forensic accounting referrals when needed for complex tracing
Our firm also has Spanish-speaking staff available, making it easier for Spanish-speaking clients throughout Los Angeles to fully understand their mortgage options and court orders.
If you’re facing divorce with a mortgaged home, I encourage you to schedule a confidential consultation at our Wilshire Boulevard office. Bring your mortgage statements, property title documents, and income records. Understanding your specific situation early allows for better financial decisions and stronger negotiating positions.
FAQ: Who Pays the Mortgage During a Divorce in California?
These FAQs address common mortgage questions that arise beyond the main article content. Each answer provides California-specific guidance to help you navigate these complex issues.
Who is responsible for paying the mortgage during a divorce?
Both spouses are jointly responsible for mortgage payments during a divorce, regardless of who lives in the home. The lender considers both parties liable until the mortgage is paid off or refinanced.
What happens to the money from the sale or refinance of the home?
When the home is sold or refinanced, the money from the proceeds is typically divided between the spouses according to the divorce agreement or court order. This division of financial assets can depend on factors such as community property laws and any prenuptial or postnuptial agreements.
Are there tax implications if we sell the house during divorce?
Yes, there can be tax implications if you sell your home during a divorce. If the proceeds from the sale exceed a certain amount, you may be subject to capital gains tax. It’s important to consult with a tax professional to understand how these thresholds and deductions apply to your situation.
What happens to property taxes and homeowners insurance during the divorce?
Property taxes and homeowners insurance are treated as ongoing carrying costs of the home, similar to the mortgage itself. Many mortgages include escrow accounts that automatically pay these expenses from your monthly payment. If your mortgage is not escrowed, your temporary orders or written agreement should specify which spouse pays property taxes and insurance during the case. Failing to pay property taxes can result in tax liens, and lapsed insurance creates serious risk. At the end of your case, the court can consider who paid these expenses when dividing equity and awarding reimbursements.
Can I buy a new home in California while my divorce and current mortgage are still pending?
Legally, you may be able to purchase a new home during divorce, but this raises complex community property and financing issues. ATROs restrict certain major financial decisions without agreement. Any new home purchased during marriage is presumed community property unless you take specific steps: using clearly separate funds, obtaining proper documentation, and potentially getting written waivers. Lenders will also scrutinize your debt-to-income ratio, including your joint mortgage obligations and any support payments. I strongly recommend consulting both a family law attorney and a mortgage lender before making offers or signing purchase contracts.
What if my spouse lives in the house for free while I keep paying the mortgage?
California courts can address this imbalance through reimbursement credits. If you’re paying the entire mortgage while your spouse lives in the home rent-free, you may be entitled to “Epstein” credits for your extra payments, while the court may charge your spouse “Watts” charges representing fair rental value for their exclusive use. However, these credits are not automatic—you must request them and provide evidence of payments made and fair market rental value. Document every payment, research comparable rental values in your area, and raise these issues with your lawyer early in the case.
Does a quitclaim deed remove my name from the mortgage after divorce?
No. This is one of the most dangerous misunderstandings in divorce. A quitclaim deed only transfers your ownership interest in the property—it changes title. It does nothing to your mortgage obligation. If your name is on the loan, you remain a borrower fully liable to the lender even after signing a quitclaim deed. To be released from mortgage liability, the spouse keeping the home must refinance into their name alone, obtain a lender-approved assumption (rare with conventional loans), or pay off the loan entirely. Never sign a quitclaim deed without understanding that you may remain financially responsible for a home you no longer own. Seek advice from your lawyer before executing any deed in divorce.
What if we are behind on the mortgage when we file for divorce?
Divorce often follows periods of financial strain, and being in arrears on your mortgage doesn’t prevent you from filing or resolving your case. However, it does complicate matters significantly. You and your spouse need a realistic plan: cure the arrears with available funds, pursue a loan modification with your lender, or list the property for sale before foreclosure proceedings advance. Sometimes a short sale—selling for less than owed with lender approval—is necessary to prevent foreclosure and its severe credit consequences. If you’re already behind on payments, consult immediately with both a family law attorney and a housing counselor or mortgage professional. Time matters when foreclosure is a possibility.
