Getting divorced comes with a lot of red tape. After two lives have been so closely intertwined, unraveling them can take time. There are a lot of factors to consider when dividing assets between spouses during a divorce, including a house and mortgage. For legal advice and representation, a Shelby County, Tennessee divorce lawyer can help.
Is a Mortgage Marital Property?
During any divorce’s division of property, the first step is to determine what is marital property, as in jointly owned, and what is individual property, as in owned by only one spouse. Family homes are considered marital property the majority of the time. Any home bought, built, or acquired during the marriage is jointly owned even if there is only one spouse’s name on the deed.
A house is only considered individually owned if one spouse owned it before the marriage or if it was a gift/inheritance by only one spouse. With that being said, if the other spouse contributed to the home financially or by maintenance or even chores, a court could consider it marital property.
What is an Equitable Distribution State?
Tennessee is what is referred to as an equitable distribution state. This means that during a divorce assets are split between the two spouses but they are not necessarily split down the middle. State courts will decide how to divide the assets fairly and equitably.
If one spouse was out of the corporate world for an extended time taking care of a child or did not receive higher education because they were supporting their spouse, they most likely have a lower earning capacity than their spouse. To make up for this disparity a court may award the lower-earning spouse more assets.
What Are My Mortgage Options When Getting Divorced?
There are three main choices that couples can pick from when they decide how to divvy up the mortgage during their divorce. Those options are:
- Sell the house. If the couple decides to sell the house then splitting the proceeds is quite simple. They will use the money from the sale to pay off the mortgage and then divide the remainder of their profits between the two.
- One spouse can buy out the other. If one spouse would like to keep the house, it can be possible for them to buy out the other spouse. This would only work if both spouses agree on the buyout, and an evaluation will have to be done to see how much the home is worth and therefore the amount of money that the remaining spouse will owe to the other.
- They remain joint owners of the house. Some divorced couples might think of this option as a nightmare, but everyone is different. A couple might choose this option if they have children that they do not want to move because of the school district, sports, friends, etc.
