Deciding what to do with a marital home during a divorce can be tricky. Sometimes one or both parties wishes to retain the house after the divorce by buying the other spouse out of their interest. Other times, the parties may choose to sell the home either during the divorce or after the divorce is finalized.
There are financial and personal benefits to selling the marital house in the midst of the divorce process. The profits gained from the sale of the home might provide each spouse with the means to start anew post-divorce. It can also provide closure both legally and emotionally. Couples often choose to sell their home during a divorce because their financial circumstances may prohibit them from simultaneously maintaining the costs of the marital home and one or more separate residences.
In some cases, the disposition of a home in equitable distribution is the simplest issue to address. The home is either sold, with the proceeds divided between the parties, or one party quickly refinances the mortgage and buys out the other party’s interest.
Sometimes, it isn’t so easy. What happens if both parties want to keep the home post-divorce? What happens if neither party can afford to keep the home by themselves, but the property’s value is less than the mortgage on the property and can’t be sold without both parties walking away with excess debt from the mortgage(s)? Are there children involved, and is it important to keep them in the home, perhaps to keep them in the same school or district? Are one or both parties’ credit rating an impediment to refinancing? Is the property in foreclosure or behind in payments?
The answers to these questions and more can determine what may happen to your home and whether you can retain it following the finalization of your divorce. Equitable distribution of any asset, your home included, depends on the particular circumstances in yours and your spouse’s life.
If you have any questions about how to retain or dispose of your marital home during a divorce, or any other issues related to a divorce, please feel free to reach out to the author, Louis Ragone, Esquire.