How to deal with your house
In any divorce, the house is usually the largest asset that needs to be divided. If the house was purchased during the marriage, then the available options are easy to identify. If it is a pre-marital asset, it becomes much more complicated. For purposes of this article, I will assume that the house was acquired during the marriage.
There are going to be one of three scenarios with your house: It either has equity, it doesn’t or it has a little equity. Equity is determined by taking the value of the house and subtracting the mortgage(s). The value of the house is usually determined by an appraisal company. They can run $250 to $500 and they value in quality and dependability. Your attorney should have several that he or she relies upon. Both sides usually chip in to get one appraisal although either side can get their own.
Scenario One – little equity in the house
There is equity and then there is equity. If the value of the house is $310,000 and the balance of the mortgage is $300,000, then there is little to no equity in the house as the sale price subtracted by real estate commissions and other expenses associated with the sale will eat up all of the equity in the house. This is a complicated situation and your attorney will be in the best position to advise you on your options. The bottom line is that each side does have equity in the house that should balance out somehow.
Scenario Two – equity in the house
If there is equity in the house, then the entire case should be a little easier. You can either sell the house and split the proceeds or one side can buy out the other. Again, your attorney should be able to guide you through this process.
Scenario Three – no equity in the house
This is tough. Rarely does a couple owe the an amount that is the exact value of the house. Instead, they are usually underwater which means that a sale of the house will leave the couple still owing money (this is called a short sale). Clearly, selling the house will be a disaster. In these situations, foreclosure and bankruptcy are considered. The best thing to do is to work with both your attorney and your spouse’s attorney to brainstorm how this situation will be handled.
If you are ready to divorce different, call Jef Henninger today. Jef can represent you in your divorce case in any New Jersey Court including Mount Holly, Trenton and Camden.