Would a Virginia divorce court order a couple to allow the former marital residence to go to foreclosure?
A Loudoun County Circuit Court judge would not allow such an order. In the case of Reidy v. Reidy, Civil Action No: 51821, a Virginia divorce court judge was confronted with evidence that the former marital residence had declined in value to a point that the two mortgages against the property exceeded its market value. Neither husband nor wife was able to afford the payments on the marital real property.
Under Virginia’s equitable distribution statute, Virginia Code Section 20-107.3, a Circuit Court judge can allocate assets, allocate debts, and make a monetary award in favor of the husband or wife. In this case, the judge recognized that he could not order a public or private sale of the former marital residence because the husband and wife would not be able to pay the amounts necessary at settlement to pay off the liens against the property. The divorce court could not order a short sale because the court had no control over the mortgage company. The divorce judge refused to order the husband and wife to allow the property to go into foreclosure because there was no authority for such an order under the Virginia equitable distribution statute and because it would be “completely abhorrent to the whole equitable distribution scheme for a court to order a party not to pay a debt.” The court essentially left the parties where they were, declining to allocate assets or debts or to make a monetary award in favor of husband or wife.
You should consult with your bankruptcy or divorce lawyer to discuss your options with respect to a mortgage default or foreclosure sale when you are separated or divorced.