The marital residence can prove to be one of the most controversial components of a modern divorce. While the majority of divorces in the past involved arguments regarding which party would be allowed to keep the house, that trend has begun to change as the unstable housing market continues to fluctuate in a consistently negative pattern. Now, with foreclosure looming on the horizon for many divorcing couples, the question of who gets the house has a different desired answer.
Why Wouldn’t You Want to Keep the House?
In many cases, according to The Institute for Divorce Financial Analysts, the amount of money owed on a house’s mortgage exceeds the actual value of the property, making it a liability instead of an asset. Unless the house holds specific emotional appeal or value, getting stuck with a payment on a residence that isn’t worth the money can be financially devastating for the party who receives it.
Many married couples decide to divorce due to a variety of irreconcilable differences and, therefore, find themselves in a position in which they are far less likely to come to an amicable solution for both ends. It is possible that vindictive or hurt feelings may fuel a desire to cause the other person inconvenience, emotional pain and financial hardship. In these cases, the inclusion of a qualified and experienced divorce attorney in early proceedings and division of assets is highly recommended. Your counselor will help mediate these periods of correspondence, ensuring that all steps of the process are completed accurately and fairly as according to your state’s laws and regulations.
It is in this type of case, in which neither party can foresee any type of cooperation in the future, that a foreclosure or short sale is selected as the best way to resolve the issue. If the house is sold at a loss as compared to its purchase value or current market value, the spouses are advised to share the costs of the loss and call the case closed. If an agreement such as this cannot be made, bankruptcy is an option and should be discussed in detail with an attorney with experience in the field.
If both members of the divorcing couple are adamant concerning the situation and neither one agrees to take on the financial responsibility of keeping the house, other agreements may be made that still count as advantages to both parties.
First, if both people involved in the divorce are willing to work with one another on reaching a positive and lucrative solution, they may consider renting the property to a third party and splitting the money that is paid for it. If the amount of monthly rent, utilities and other bills exceeds the amount needed to pay the house’s mortgage, the difference is split between the ex-spouses.
A second option involves one member of the divorcing couple to remain in the house while the other moves out. The person remaining in the house pays a predetermined amount each month to the spouse who has moved out to cover rent and any other bills associated with the property. In this case, both people tend to retain ownership of the house and are responsible for any paperwork required to sell it in the future, should the market improve.
Ginarte O’Dwyer Gonzalez Gallardo & Winograd, LLP is a personal injury and divorce law firm located in New York / New Jersey. For more information, please visit us at www.Ginarte.com.