When a divorcing couple owes more on the marital home than what the property is worth and one spouse wishes to keep the property and assume all the mortgage debt, does that person have to buy out the other person since there is no equity in the property?
Over the past several years, many divorcing couples have found that the poor economy has caused a tremendous impact on the value of their biggest asset, usually the marital home.
Sadly, the situation is more common than people realize. If, as a couple, you owe more on your mortgage than the home is currently worth, then you have no equity in the property.
Typically, Missouri courts will divide debts and assets equally. Equity is an asset. In this case, without equity, there is nothing to divide. The only concern you may have is how to divide the mortgage/debt on the home.
Normally, the spouse that agrees to remain in the home also agrees to refinance the property so that the other party does not remain responsible for the debt on the residence. Usually there is not a division of the debt, since the party remaining in the house will, presumably, be able to recoup the benefit of any future equity.
Keep in mind the dangers of moving out of the marital home during a divorce.
First, the leaving party is less likely to receive primary physical custody of any child because courts tend to render decisions that maintain the child’s established custodial environment.
Second, the remaining party is more likely to receive exclusive possession of the home until the court issues its final divorce decree. This means you could leave for a few weeks but end up locked out of your home, figuratively and perhaps literally, for several months.
Third, the leaving party loses considerable control over the property inside the home. For example, you cannot prevent your spouse from taking a baseball bat to your favorite 52″ HDTV in a fit of anger.
For a more in depth discussion of your legal rights, I urge you to contact an attorney immediately.
Cordell & Cordell has well qualified and experienced men’s divorce lawyers located nationwide, including many in Missouri, if you require additional legal assistance.