Northern Beaches Mums Group
Northern Beaches Mums Group

What happens if I can’t afford to pay my mortgage or debts following a separation?

Separating from your partner can be a complicated and heartbreaking process, and that’s without worrying about meeting your financial obligations. If you’re struggling to make mortgage payments or pay off debts following a separation, it certainly can increase stress levels. Keep reading to explore some options available to help ease your financial burdens.

  1. Speak with your lender

The first step when you’re struggling to make mortgage payments is to speak with your lender. Many financial institutions have hardship programs that can provide you with temporary relief by reducing your repayments or deferring them for a period of time such as a mortgage holiday. Be sure to explain your situation honestly and provide any supporting documentation that you can, such as bank statements or proof of income.

  1. Explore refinancing options

Refinancing your mortgage may be an option if you’re struggling to make weekly or monthly payments. Refinancing involves taking out a new loan to pay off your existing mortgage, which can result in lower repayments or a more manageable payment schedule. It’s important to consider the costs associated with refinancing, such as fees and charges, to ensure that it’s a viable option for you.

  1. Negotiate with your ex-partner

Negotiating with your ex-partner can be a helpful solution to make finances more manageable when you are struggling to make mortgage payments or pay off debts following a separation. By sitting down and discussing your money situation together, you can explore alternative options such as requesting a “loan holiday” from the bank, selling assets, or even renting out the house. It’s important to ensure that the discussions are safe and legal and that both parties are open and transparent about their financial situation. Seeking advice from a family lawyer may also be beneficial to ensure your rights and interests are protected during the negotiation process.

  1. Consider selling the property

If you’re unable to make payments on your mortgage, it may be necessary to consider selling the property. This can be a difficult decision to make, especially if you have an emotional attachment to the property or if you’re concerned about the impact on your children. However, selling the property may be the best option to avoid further financial stress and allows you to close that chapter in your life and move forward.

  1. Seek legal advice

Navigating the complexities of separation and financial obligations can be overwhelming, which is why seeking legal advice is crucial. A family lawyer can help you understand your legal rights and responsibilities, negotiate with your lender or ex-partner on your behalf, and guide you through the process of selling your property if necessary. A lawyer can also help you to develop a plan for managing your debts and avoiding financial hardship in the future.

Article by Carolyn Devries, founder of New Way Lawyers

At New Way Lawyers, we understand the challenges that come with separation and financial hardship. As a not-for-profit family law firm, we’re dedicated to helping our clients find the best possible outcome for their situation. If you’re struggling to make mortgage payments or pay off debts following separation, we’re here to help. Contact us today for a free 20-minute consultation at (07) 3548 5890. Alternatively, you can visit our Facebook group ‘Lunch with a Lawyer’ to ask any questions you may have. Lunch with a Lawyer | Facebook