If my husband and I own a piece of rental property, how can I protect myself in the event of foreclosure?

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If my husband and I own a piece of rental property, how can I protect myself in the event of foreclosure?

It has not been rented out yet and is not ready to be rented. However, we are getting behind on the mortgage payments, and I am concerned it will fall into foreclosure. My husband wants to continue to proceed with renting, and I would prefer to sell the property because of its present condition. Would it be a good idea to request having my name taken off of the property, so that if it does go into foreclosure I am not liable? Or am I still liable since it is in my spouse’s name? If I wait, how much time do I have till it is too late to take my name off and to take action? I am trying to protect myself and my children.

Asked on October 6, 2012 under Real Estate Law, Ohio

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Transfering the property is not going to help you in this situation.  In Ohio, what controls what is considered community property is when the two of you obtained the property.  If you purchased the property during the marriage, then it will be considered community property, regardless of whose name is on the title-- and you will both have a financial obligation to the home, until a court says otherwise.  The only way to protect yourself is to get him to sell the property, take extra measures to pay the note and avoid foreclosure, or consider filing bankrupty to put a stay on the foreclosure until you both get back on your feet financially.  These are some options if you are staying with him.  If you are not looking to continue the marriage, then you can file for divorce and request that he be awarded the house and its debt or that the court order it to be sold.  Ohio is a community property state, and to a similar extent, a community debt state.  Unfortunately, many spouses are stung by the financial decisions of their current and former spouses.


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