I bought a house in 2006, at the height of the boom. Now I owe more than $100K what the home is worth, and considering walking away from my mortgage.
(I'm in California, which is a "no recourse" state; the bank can take the house and ruin my credit, but that's about it. The bank won't approve a short sale because I'm in good shape financially; I can afford the mortgage, it's just foolish of me to pay the bank $100K simply to protect my credit rating.)
But my spouse and I have perfect credit right now; it would be painful to lose that.
We're considering a temporary divorce, transferring the house to my name only. I'd abandon the mortgage, take the credit hit, and remarry my (ex-)spouse. (We're very much in love; we're considering the divorce only for financial reasons.)
The question is: would this help us avoid ruining our credit? Or would it just be a big legal hassle to no one's benefit?