HELOC During Divorce: What You Need to Know (The Uncomfortable Truth)

Divorce is hard enough without financial surprises. So here's the uncomfortable truth you need to hear right now:

Your divorce decree doesn't release you from your HELOC.

Read that again. The court can order your ex to pay the HELOC. Your ex can agree to pay the HELOC. But if both names are on that loan, the lender doesn't care about your divorce agreement. They care about getting paid—by either of you.

Let's walk through what you actually need to know about HELOCs and divorce.

The Uncomfortable Truth About Joint HELOCs

When both spouses signed the HELOC, both spouses are 100% liable for the entire debt. Not 50% each. 100% each.

This means:

• If your ex agrees to pay but doesn't, the lender comes after you
• If your divorce decree assigns the debt to your ex, the lender can still sue you
• If your ex files bankruptcy, you're on the hook for everything

The only way to truly remove yourself from joint HELOC liability is to:

1. Pay off the HELOC entirely
2. Refinance it into one spouse's name only
3. Sell the house and pay it off

A divorce decree is a contract between you and your ex. It's not a contract with your lender.

Getting a HELOC Before Divorce

Some couples strategically open a HELOC before filing for divorce. Here's why:

Access to equity while you still can

• Both spouses on title can more easily qualify
• Combined income helps with approval
• Funds can be used for divorce costs, moving expenses, or transition needs

Important considerations:

• Timing matters—opening credit during separation may raise legal questions
• Both spouses must sign if both are on title
• Any debt incurred may be considered marital debt depending on your state

Talk to a divorce attorney first. Some courts view HELOC draws during separation as dissipating marital assets. You don't want to create legal problems while solving financial ones.

Getting a HELOC During Active Divorce

This gets complicated. Here's what typically happens:

If both spouses are on title:

• Both must consent to opening a HELOC
• Your soon-to-be-ex probably won't sign
• Some states require court approval for major financial transactions during divorce

If you're already separated:

• The court may have issued automatic temporary restraining orders (ATROs)
• These often prohibit taking on new debt against marital property
• Violating ATROs can hurt your divorce case

Your options during active divorce are usually limited. Focus on the divorce settlement and address HELOC needs afterward.

Getting a HELOC After Divorce

Once the divorce is final and property is divided, your options open up.

If you kept the house:

• You can get a HELOC in your name only
• Your qualifying income and credit matter (not your ex's)
• You'll need sufficient equity (usually 15-20% after the HELOC)

If you refinanced to remove your ex:

• You likely have a new first mortgage
• Equity may have changed depending on refinance terms
• Wait a few months to establish payment history before applying for HELOC

Key requirements for post-divorce HELOC:

• Clear title in your name only
• Recorded divorce decree and quitclaim deed
• Your income alone must support the debt

Handling an Existing Joint HELOC in Divorce

Already have a HELOC with both names? Here are your options:

Option 1: One Spouse Refinances

The spouse keeping the house refinances the HELOC (and usually the first mortgage) into their name only. This removes the other spouse from liability.

Pros: Clean break, clear ownership Cons: Refinancing spouse must qualify alone, may get worse rate

Option 2: Sell the House

Selling the house pays off both the first mortgage and HELOC. Any remaining equity gets divided per the divorce agreement.

Pros: Completely eliminates the joint debt Cons: Both parties need new housing, costs of selling

Option 3: Pay Off the HELOC at Divorce

Use other assets (savings, retirement funds, proceeds from other asset sales) to pay off the HELOC at divorce.

Pros: Removes the joint liability Cons: May not have liquid assets available

Option 4: One Spouse Agrees to Pay (Risky)

The divorce decree assigns the HELOC to one spouse, but both names remain on the loan.

Pros: Simplest short-term solution Cons: The non-paying spouse is still liable if the other defaults

Option 4 is common but risky. Your credit is in your ex's hands. If they pay late—or stop paying—your credit suffers and the lender comes after you.

Protect Yourself: A Divorce HELOC Checklist

Whether you have a HELOC or are considering one, here's how to protect yourself:

• Inventory all joint debts including HELOCs, credit lines, and home equity loans
• Get copies of all loan documents showing who signed what
• Understand your state's property laws (community property vs. equitable distribution)
• Push for refinancing to remove your name if your ex is keeping the house
• Document everything about who's paying what during separation
• Set up payment alerts on any joint accounts so you know immediately if payments stop
• Consult both a divorce attorney and financial advisor

What If Your Ex Stops Paying?

If your name is on the HELOC and your ex stops paying:

1. Your credit takes the hit - Late payments appear on your credit report
2. The lender contacts both of you - You'll get collection calls too
3. You may need to pay - To protect your credit, you might pay a debt your ex was supposed to handle
4. You have legal recourse - You can take your ex back to court for violating the divorce decree

Document everything. Keep records of every payment you make that was your ex's responsibility. This becomes evidence if you need to go back to court.

The Bottom Line

Divorce and HELOCs are a complicated mix. The key takeaway: divorce agreements don't override mortgage contracts.

If your name is on a HELOC, you're responsible for it—no matter what your divorce decree says. The only way to truly protect yourself is to get your name off the loan entirely through refinancing or payoff.

At HonestCasa, we understand that life is complicated. If you're navigating a divorce and need to understand your home equity options, we can help you see what's possible. Talk to us →

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FAQ

Can my spouse take out a HELOC without my consent?

If you're both on the home's title, both signatures are typically required to open a HELOC. If only your spouse is on title, they may be able to open one without you.

Am I responsible for my ex's HELOC after divorce?

If your name is on the HELOC, yes—regardless of what the divorce decree says. The lender can pursue either borrower for the full amount.

How do I remove my name from a joint HELOC after divorce?

The spouse keeping the house must refinance the HELOC into their name only. You cannot simply "remove" a name from an existing loan.

Can I get a HELOC on my house after divorce?

Yes, once you have clear title in your name, you can apply for a HELOC based on your individual income and credit.