Nearly half of marital unions in the United States, including in New York, end in divorce, and unfortunately, no divorce is without its challenges. A major area that can spark conflict during a marital breakup is debt and property division. When it comes to debt, a couple may especially be at odds regarding how to handle the marital home when a mortgage is still on it.
Unlike with credit card debt, where a married couple can simply split the debt in a fair manner, a mortgage involves an asset — the couple’s home. If two spouses own the marital home together and are both on the mortgage note, then one spouse may decide to simply keep the house. In this case, the couple can see if the mortgage company will allow this spouse to refinance the house in his or her name only.
If equity exists in the house, the couple could agree for one party to keep the home and simply buy out his or her spouse with cash. This is possible by refinancing the house for what is worth and then getting cash out. Alternatively, the spouse who plans to keep the home may pursue a home equity loan and then utilize some of the money to pay the other party for his or her fair share of the home’s equity. Finally, the couple could simply sell the home and divide the proceeds.
Property division in a divorce proceeding can understandably be complicated and overwhelming. However, an attorney in New York can provide the guidance needed to navigate debt and property division in the most personally favorable manner possible. The attorney’s ultimate goal is to make sure that client’s rights are protected during all stages of the proceeding.
Source: wisebread.com, “What Happens to Debt After Divorce?“, Holly Johnson, March 30, 2018