If I co-sign on a real estate loan for someone, can my wife take it as part of our divorce settlement?

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If I co-sign on a real estate loan for someone, can my wife take it as part of our divorce settlement?

My wife and I have been separated for 5 years and she keeps moving before I can send divorce papers. I want to co-sign on a home loan and would like to know if she could try to take this property when we get divorced? Should I go ahead and co-sign?

Asked on April 25, 2011 under Family Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Co-signing a loan does not in and of itself give someone an ownership interest in property; it just obligates someone to pay the loan if the signor does not or defaults. So if all you do is incur a debt or obligation, that would not give your wife any rights to the property. However, if you also do gain any interest in the property (e.g. you're on the title)--or in some situations, if the circumstances make clear that you are the real owner of the property and just structed this transaction the way you did to try and defraud you wife--then she may be able to reach the property in a divorce. For example: if despite being the "cosignor," you regularly pay some or all of  the loan and use the property, it may be possible to establish that you are the real owner of it.


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