When Connecticut homeowners divorce, the division of marital assets can become fairly complicated. It is not unheard of for someone who has gone through a divorce and signed away legal rights to a home during property division to later discover that they are still on a mortgage and considered responsible for payments by the lender. This can even be the case if someone has sent a copy of the divorce decree to the mortgage holder.
When a couple decides that one spouse will continue living in the house the couple jointly owns, they should attempt to refinance the mortgage in the remaining spouse’s name. If this is not done, the person who gave up the home could have problems getting credit in the future. When the home in question has equity, the goal should be to get another loan that has a cash out value that covers the remainder of what is owed on the house plus the value of half of the equity, and the equity portion will go to the person giving up rights to the home.
When a couple chooses to sell a home with equity in it, it is very straightforward because couples can simply split the profit, minus any costs related to work done to get the home ready to sell. If the home is worth less than the remaining mortgage, people can either divide up the debt or rent the home out until they are able to increase the value of the property.
A person contemplating the end of a marriage may wish to speak with an attorney who specializes in divorce matters. The attorney may be able to help negotiate and draft agreements dealing with the division of real estate and other property that was acquired during the marriage.
Source: Reuters, “Splitsville? How to divide property in a divorce“, Geoff Williams, October 07, 2013