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How can I secure a loan to my son against his home in South Carolina?

How can I secure a loan to my son against his home in South Carolina?

Q: What is the best way to get over a divorce?

Getting over a divorce can be challenging. It's important to allow yourself to grieve and process your emotions. Seek support from friends, family, or a therapist. Engaging in activities you enjoy and focusing on self-care can also help. Establishing new routines and setting personal goals can aid in moving forward positively.

Q: Can I get a loan in the middle of a divorce?

You can obtain a loan during a divorce, but it may be challenging. Lenders will assess your creditworthiness and financial situation, which could be impacted by the divorce. If the loan involves marital assets, both parties may need to agree. Consulting with a legal professional is recommended to understand the implications.

Full question:

I have to loan my son $12000. He is in the midst of a divorce and owns his home without any debt or mortgage (it is in his name only). I want to know if there is a form (like a lien) that he and I can sign and get notarized, so that if/when the house sells, I can be assured of being repaid. He is agreeable to this. I am concerned that the divorce is not final and if there are any issues regarding the final settlement, I need to be repaid regardless. Is there a form to use to do this so I do not incur expense of a lawyer?

Category: Debts and Credit
Subcategory: Promissory Notes
Date: 04/07/2025
State: South Carolina

Answer:

A personal loan can be secured by some kind of collateral. When real estate is used as collateral, if the loan is not repaid according to the terms of the promissory note, the lender of the money can pursue repayment using the value of the property.

When making a secured loan, the lender will have the borrower sign a promissory note that states in part that the loan will be secured by an identified piece of real estate. This is the process when a home equity loan is secured.

At the same time, the borrower will sign a mortgage deed which grants the lender an interest in the borrower's property. The loan can be secured even if f the property is owned by more than one person (and that person is not a party to the loan).

However, it should be cautioned that in many states, a divorce proceeding will put a hold on either spouse's ability to encumber a marital asset. That means if the spouse does take out a loan (which would affect the ultimate value of the asset), the spouse who took out the loan could face consequences in the divorce court. Your son should review the scenario closely with his legal counsel before signing.

As the lender, after the borrower signs the note and mortgage, the lender must "perfect" the process by recording the mortgage on the local land records where the property is located.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How does debt work during divorce?

During a divorce, debts incurred during the marriage are typically considered marital debts, regardless of whose name is on the account. Both spouses may be responsible for repaying these debts, depending on state laws. However, debts acquired after separation may be assigned to the spouse who incurred them. It's essential to consult with a legal professional to understand how debts will be divided in your specific situation.

What is the best way to get over a divorce?

What are my rights if my name is not on the mortgage?

If your name is not on the mortgage, you may still have rights to the property, especially if you contributed to mortgage payments or home expenses. In many states, property acquired during marriage is considered marital property, which may entitle you to a share in a divorce. Consult a legal expert to understand your rights based on your situation.

Does it matter whose name is on the mortgage in a divorce?

Yes, whose name is on the mortgage can affect property division in a divorce. However, in many states, the court considers the property acquired during the marriage as marital property, regardless of whose name is on the mortgage. This means both spouses may have rights to the home. Legal advice is crucial for navigating these complexities.

Can you get a loan while going through a divorce?

Yes, it is possible to get a loan during a divorce, but it can be complicated. If the loan is secured by marital property, it may require consent from both spouses. Additionally, lenders may consider your financial situation, including any ongoing divorce proceedings. It's advisable to consult with a financial advisor or attorney before proceeding.