Marital House and Names Shown on the Debt

DIVORCE 911 consulted with Matt Dickason of Dickason Law.

We also have a video covering this topic.


Divorce is a very emotional event and is often difficult to handle. There are different things a Real Estate law firm/title company can do to help. If the law firm understands that the transaction with the marital home is happening because of a divorce, whether it’s being sold or refinanced there are things that are very easy for us to do. One simple and effective way to help is to split the closings. When a law firm allows for the divorcing or divorced couple to not have to handle things in the same room together, it is great appreciated. That’s just the emotional side of it.

One of the things a law firm can really appreciate on every closing; is that the clients are participating in what is probably the largest transaction a person will ever have. Professionalism and candor for sure, but when you add that element of divorce it’s different.  Instead of selling or buying the house a person wants to buy or sell… it’s occurring for a different reason. It might be that one person gets to keep the house and the other is leaving or that neither party stays in the house. This might be because of a financial issue or maybe the emotions attached to that property are just too much to manage.

A decision is made (by the court or the individuals) to put the house on the market. Depending on how the title is vested, which means how you own the property if it’s a joint title it can be worked through. One example: The husband owns the property in his name but he needed the wife’s income to support the payments. Different payments and payoffs have to be taken care of before any money is divided up between the parties. Things must be paid off that are attached to the name(s) shown on the title.

A family law attorney might say “$250,000 is owed on the mortgage, you’re selling it for $300,000. Real estate commissions, property taxes, HOA fees, any additional leans, etc…that are on the house and property itself must be paid off before any remaining funds are disbursed.”.  Whether the debt is under one or both names, a clear title must be delivered to the subsequent buyer. So no matter what, if you signed off on that mortgage or REFI, or Equity Line of Credit, etc… (regardless if it was your idea or your spouses’) these loans/liens must be paid off. You will come to realize that part of the divorce negotiation process is not just determining the fair market value of the house and then only subtracting the mortgage payoff. You must investigate further to determine what other debts are associated with this property. One of the owners might feel as if these debts (loans or liens) are not his or her’s responsibility… And so the debate amongst the divorcing parties begins… 

Your first objective, hire an experienced real estate agent that specializes in Divorce Care. They must have a full & complete team of legal and financial professionals to bring you the best information needed DURING the mediation/divorce process.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.
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