A line of credit on a house can be a dangerous thing.  Parties may have secured the line during their marriage, but may not have used it, or only used part of it.  Then they separate.  Who is responsible for the payment?  Can either party write a check from the line?

The party living in the home secured by the line has everything to lose.  Think about this:

  • If there is a huge line on the house, since the party in possession of the house is presumed to be responsible for paying the mortgage and any other similar expense, this may be a huge added bill that has to be paid each month.
  • If the line exists but has not been drawn down, the party in possession of the house does not want the other party to create a debt for which he/she may be responsible.

What can be done to protect yourself in this situation? 

  • Control the check book for the Line.  Simple, but effective.
  • Freeze the Line – Call the bank and find out what can be done.
  • Close the Line – This may require paying the balance, but it can be done.
  • Find out if the bank will permit the Line to be modified so that two signatures are required to draw.
  • Seek a an agreement from the other party that no draws will be taken.  If no agreement can be reached, a Court Order may be necessary.

Not everything necessarily requires legal action.  Sometimes common sense can save the biggest headaches.