If your ex has stopped paying the mortgage and the house you both signed for is sliding toward foreclosure, here is what to do when your ex lets the house go into foreclosure: treat the lender’s clock as your clock, because a divorce decree assigning the mortgage to your ex does not remove your name from the loan. The lender still sees you as fully responsible, a foreclosure will hit your credit for seven years, and the useful moves all happen before the auction date, not after.
Why the Divorce Decree Doesn’t Protect You From the Lender
A divorce decree or separation agreement can say your ex is responsible for the mortgage. The lender does not care. From the lender’s perspective, both names on the loan mean both borrowers owe the full balance. If your ex misses payments, the servicer can report the delinquency against you, pursue you for the debt, and foreclose on the property regardless of what your divorce paperwork says.
The decree gives you a legal claim against your ex for violating the agreement. It does nothing to stop the lender from treating you as a defaulting borrower. The only way to actually sever your obligation is to refinance the loan into one person’s name alone, which removes the other borrower entirely. Until that happens, if the mortgage is in both names and payments stop, you are in the same boat whether you live in the house or not.
What to Do in the Next Few Weeks
Speed matters. Foreclosure generally starts after about 90 days of missed payments, when the lender issues a notice of default. From there you may have another 90 days or more before legal proceedings begin, depending on your state. That timeline gives you room to intervene, but only if you use it.
Make the Payments Yourself
As a co-borrower, you have every right to make payments directly to the lender, even if you no longer live in the home. This is the fastest way to stop the damage. Yes, it means paying for a house your ex is living in. A few months of mortgage payments is far cheaper than seven years of foreclosure on your credit report, and you can pursue reimbursement from your ex later through the courts.
Call the Servicer About Loss Mitigation
Federal regulations require mortgage servicers to evaluate borrowers for loss mitigation options before completing a foreclosure. Forbearance can pause or reduce payments for up to six months. Repayment plans spread missed payments over a longer period. Loan modifications can restructure the debt with a lower payment or an extended term. You can request these options as a co-borrower even if your ex refuses to participate.
Find Out Exactly Where the Foreclosure Stands
Call the lender or servicer and ask for the current status. If you have only received a notice of default, you likely have time. If the lender has already filed in court or scheduled an auction, your window is smaller and your choices narrow. Every day you wait reduces your options.
Ways Out That Beat Foreclosure
Foreclosure is the worst outcome for both parties. It destroys credit, may leave you owing more money, and can trigger a tax bill. Several alternatives produce better results, and some of them work even when your ex refuses to cooperate.
Sell the Home
If the home has enough equity to cover the mortgage balance, selling is usually the cleanest solution. The proceeds pay off the loan, remaining equity gets divided according to your divorce agreement, and both parties walk away. If your ex refuses to cooperate despite the decree requiring it, you can ask the court to compel cooperation or appoint a special referee authorized to sign on their behalf. Courts take a dim view of a party who blocks a sale ordered in a decree, and your ex could face contempt and liability for your attorney’s fees.
Short Sale
When the home is worth less than the mortgage balance, a short sale lets you sell for less than what is owed with the lender’s approval. Lenders generally will not consider one until you are already behind on payments and can show hardship. Both co-borrowers typically need to participate, though a court can order an uncooperative ex to cooperate. Negotiate for the lender to waive any right to pursue the remaining balance after the sale. Without that waiver, you could still owe the difference.
Deed in Lieu of Foreclosure
A deed in lieu is essentially handing the keys back to the lender. You voluntarily transfer ownership and the lender cancels the mortgage. Compared to foreclosure, it is faster and simpler, with generally less credit damage, and the lender may waive any deficiency. The catch: both co-borrowers typically need to agree, and lenders will not always accept a deed in lieu, especially if there are other liens on the property.
Partition Action
If your ex will not agree to sell and will not make payments, a partition action is a lawsuit that forces the sale of jointly owned property. Any co-owner can file one. The court orders the property sold, privately or at auction, and divides the proceeds based on each owner’s share. Lienholders, including the mortgage lender, get paid from the sale before either party sees any money.
Partition actions are effective but slow and expensive. They typically take one to two years from filing to completed sale, and legal costs can easily reach $5,000 or more depending on how aggressively your ex contests the case. Still, a forced sale is better than letting the home sit in foreclosure and drag both credit scores down.
What Foreclosure Actually Costs You
If nothing works and the lender forecloses, the property goes to auction. The proceeds pay down the mortgage balance. What happens next depends on whether the sale covers what you owe.
Deficiency Judgments
If the sale price falls short of the remaining balance, the lender may seek a deficiency judgment for the difference. With that judgment, the lender can garnish wages, seize bank accounts, or place liens on other property you own.1Investopedia. Deficiency Judgment
Not every state allows them. Roughly a dozen states either prohibit deficiency judgments entirely for residential mortgages or sharply limit when lenders can pursue them, particularly for purchase-money loans on primary residences. In states that do allow them, the lender bears the burden of showing that the foreclosure sale price was fair. If the lender accepted a lowball auction bid and then came after you for the shortfall, that is a defense worth raising.1Investopedia. Deficiency Judgment
Credit Damage and Waiting Periods
A foreclosure stays on your credit report for seven years from the date it is completed.2Consumer Financial Protection Bureau. If I Lose My Home to Foreclosure, Can I Ever Buy a Home Again? The score drop is severe, often 100 points or more depending on where you started.3Equifax. Rebuilding Credit After a Foreclosure or Eviction That kind of hit makes it harder to qualify for new loans, rent an apartment, and in some industries pass employer credit checks.
Foreclosure also triggers mandatory waiting periods before you can qualify for a new mortgage. For a conventional loan backed by Fannie Mae, the standard wait is seven years from the completion date. With documented extenuating circumstances that drops to three years, but the loan-to-value ratio is capped at 90% and you can only purchase a primary residence during that shortened window.4Fannie Mae. Significant Derogatory Credit Events – Waiting Periods and Re-establishing Credit FHA loans have a shorter standard waiting period of three years. VA loans generally require two years.
A Tax Bill You Might Not Expect
When a lender cancels the remaining balance after a foreclosure sale, the IRS treats the forgiven amount as income. The lender will send you a Form 1099-C reporting the canceled debt, and you are responsible for reporting it on your return for the year the cancellation occurred.5Internal Revenue Service. Topic no. 431, Canceled Debt – Is It Taxable or Not?
There is an escape hatch. If your total liabilities exceeded the fair market value of your total assets immediately before the debt was canceled, you qualify for the insolvency exclusion and can exclude canceled debt from income up to the amount by which you were insolvent.6Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness If you were insolvent by $50,000 and $80,000 was forgiven, you would exclude $50,000 and pay tax on the remaining $30,000. The IRS provides an insolvency worksheet in Publication 4681 to help calculate the number.7Internal Revenue Service. Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments
A broader exclusion for forgiven mortgage debt on a principal residence existed under the Mortgage Forgiveness Debt Relief Act, but that provision expired at the end of 2025. Unless Congress extends it, canceled mortgage debt in 2026 is taxable unless you qualify for the insolvency exclusion or another exception.
Going After Your Ex
Your divorce decree is a court order. If it says your ex is responsible for the mortgage and they stop paying, that is a violation you can enforce. The most common route is a motion for contempt, asking the judge to find your ex in willful violation of the decree. Courts have broad discretion in contempt cases and can impose fines, order wage garnishment, award attorney’s fees, or in extreme cases even impose jail time until the ex complies.
You can also file a separate civil lawsuit for breach of the divorce agreement. If the foreclosure has already happened, you can seek damages for the harm it caused: lost home equity, credit damage, higher borrowing costs, even the tax liability from canceled debt. Winning these cases requires solid documentation. Save every credit report, every lender notice, and every piece of correspondence showing your ex failed to pay.
Some divorce agreements include indemnification clauses that specifically protect one party from financial fallout if the other fails to meet their obligations. If your agreement has one, your case is stronger. If you are still negotiating a divorce and the home is in both names, insist on including this language. It will not stop the lender from coming after you, but it gives you a cleaner path to recovering from your ex.
The hard reality is that legal recourse only works if your ex has assets or income to go after. A contempt finding or civil judgment is worth little against a judgment-proof ex. That is exactly why the earlier moves — paying the lender yourself, forcing a sale, negotiating a short sale — are usually more practical than waiting to sue after the damage is done.