Legal Question in Family Law in Illinois

Frankly, in the current economy, your ex may be telling the truth and you're not alone. Presumably you are still on the mortgage based on what you say. This is the rock and hard place scenario: it is highly possible that if the house is sold now it could very well go for less than the mortgage (short sale) and it would be up to the lender to decide whether to take less, and there are tax consequences too. If he continues to fall behind, eventually the lender could foreclose, and if both of you are on the loan there will be the prospect of a deficiency judgment if the house doesn't sell for the mortgage (plus foreclosure fees, costs, arrearages, etc.) and you will be very possibly liable for all of it if he can't pay (assuming you are jointly and severally liable with him on the loan) because the divorce decree may have no "teeth" (he just promised to indemnify you maybe on the loan, and the promise may be worthless today unless he can raise the money from a third party source). Either way your credit will be affected even though you might be able to explain it to the credit reporting agencies. Here are some things to consider, and you should go to an attorney to help navigate your way through it (at the very least look at the loan papers and divorce decree to get the full picture) and you may need your divorce lawyer involved as a modification to the divorce decree / marital settlement agreement may be required, and some of it may depend on your relationship with your ex, or you may need to take steps to force him to do a few other things (sell other property to assist -- personal effects, jewelry, furniture, tv and stereo gear, you name it):

1. Talk to a couple of brokers about current value to confirm the "upside down" situation your ex claims;

2. Talk to the lender about some kind of loan modification (there are programs supposedly);

3. If you can afford it and the lender would allow it, you might be able to lend your ex some money to help pay the mortgage, taxes, etc., or pay off enough of the loan to get yourself off of it.

4. the quitclaim should not deter you -- this is where the divorce decree may need some changes -- I will ASSUME the quitclaim was a requirement of the marital settlement agreement in exchange for his assumption of mortgage obligations and the only remedy for his failure to keep the mortgage...current was a forced sale. The decree w/ incorporated marital settlement agreement needs to be reviewed; if there are other remedies in it the court can enforce them. If there are no other remedies a court may be able to modify it to allow for you to protect yourself since the indemnity is probably worthless.

5. Assist with a structured refinance (guaranty a new loan) with a paydown of sorts, that he and you can afford.

6. Consider demanding that he rent the place if the market suggests it is possible, make him move out and pay the deficit between rent and mortgage -- this should help reduce his exposure and leave him (possibly) with enough to rent a small place for himself.

7. There may be other options depending on his situation, and yours.

Good luck, really!!!!