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Chicago Divorce Attorney Explains Mortgage Refinancing During Divorce
Russell D. Knight shares options for divorcing spouses with shared mortgages in Illinois
Mar. 31, 2026 at 2:25am
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Divorce proceedings often require complex financial negotiations around the marital home and mortgage, underscoring the need for skilled legal counsel.Chicago TodayChicago divorce attorney Russell D. Knight of the Law Office of Russell D. Knight explains the refinancing options available to divorcing spouses in Illinois and how courts handle property division when a shared mortgage is involved. Knight notes that refinancing is often required to remove one spouse from the mortgage obligation, and courts have broad authority to address mortgage and property issues during divorce proceedings.
Why it matters
Determining what happens to the marital mortgage is one of the most complex financial challenges in a divorce. Failing to properly refinance or sell the home can leave one spouse's credit exposed and at risk of foreclosure, even after the divorce is finalized.
The details
When a mortgage is held jointly by both spouses, one party must be removed from that obligation, which can only be accomplished through either a sale of the property or a refinancing of the mortgage in the name of the spouse who will retain the home. Illinois courts have the authority to order the sale or refinancing of a marital asset, and they may divide the equity based on factors like the economic circumstances of each spouse.
- The Marital Settlement Agreement typically establishes a defined window, often one year from the entry of the Judgment for Dissolution of Marriage, within which the awarded spouse must refinance and remove the other party's name from the mortgage.
The players
Russell D. Knight
A Chicago divorce attorney and the founder of the Law Office of Russell D. Knight, who has practiced family law since 2006.
What they’re saying
“Many people don't realize their credit remains tied to a joint mortgage even after divorce unless the mortgage is refinanced or the property is sold.”
— Russell D. Knight, Chicago divorce attorney
“The appraisal is often where the real negotiation begins. It sets the baseline for what each party is entitled to.”
— Russell D. Knight, Chicago divorce attorney
“Courts and attorneys rarely recommend leaving a joint mortgage in place after divorce. The risks to the non-occupying spouse are simply too significant.”
— Russell D. Knight, Chicago divorce attorney
What’s next
If refinancing cannot be achieved within the agreed-upon timeframe, the Marital Settlement Agreement will generally require the property to be listed for sale, with proceeds divided accordingly.
The takeaway
Navigating the complex financial issues surrounding the marital mortgage during a divorce requires the guidance of an experienced divorce attorney to ensure the Marital Settlement Agreement provides appropriate protections and contingencies for both spouses.
