When you are in the process of getting a divorce, you will need to take
the time to work out a
property division. For most people, the house is a serious issue that they fight about for
hours. Spouses both want to stay in the home that they have built and
want to kick their ex out. Oftentimes, the courts will rule that contentious
spouses sell their house and split the proceeds, or that one buys the
other spouse’s half of the property. But what happens when a house
has negative equity? All of a sudden, spouses may be trying to pass this
large financial burden off to one another and trying to avoid taking responsible
for the expenses.
A home with negative equity is one where the owners owe more money on the
residence then they could recover if they sold their home. This makes
the house a debt for whoever assumes responsibility, rather than a piece
of valuable property. Typically, divorce courts will try to divide debt.
This means that if a couple has multiple debts, the court may choose to
give one spouse the house debt and affix other credit card expenses, car
payments, and other costs to the other spouse.
When a home has negative equity, the courts will regard it as a debt, rather
than an asset. The receiving party who takes on a home with negative equity
may have the right to more marital properties in order to make up for
the debts. This can be a sort of compensation. When neither party can
afford the expense of a negative equity home, the court may decide to
sell the home and order both parties to split the downfall on the mortgage
as a part of their marital debt. If you are in this situation, you will
want a Los Angeles family lawyer from Claery & Green there to help
you as you handle your case.