Will I be responsible for half of the negative equity of our home in a divorce? 32 Answers as of June 26, 2013

I have been married for 7 yrs. Two yrs ago my husband bought a home with him as sole owner. There is negative equity he says I am responsible for half of but he keeps the house. What does that mean for me in divorce?

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The English Law Firm
The English Law Firm | Robert English
It is more complicated than that. California is generally a non-recourse state. That means that if you were to abandon the property, the bank can't come after you for the negative equity. You should not owe him anything on that debt if he chooses to retain that property and you agree. I am making certain factual assumptions here, so you will want to talk to an attorney about the specifics of your case.
Answer Applies to: California
Replied: 8/12/2011
Reeves Law Firm, P.C.
Reeves Law Firm, P.C. | Roy L. Reeves
He is incorrect. If he keeps the house, he pays for the house (negative equity and all). If you get the house, you pay for the house. If the house has equity (how do you know it is negative, have you contacted a realtor, tried to sell it, had it appraised?) then whomever moves out can ask for half of the equity. If the house is truly in negative territory, then you can sell the house and split the loss but don't offer that.
Answer Applies to: Texas
Replied: 8/11/2011
Law Office of Robert L. Fiedler
Law Office of Robert L. Fiedler | Robert L Fiedler
The issue of apportionment of marital assets and debts requires a review of all the assets and debts to determine what should be divided and the share that each person should get. I suggest you discuss the asset and debt questions with an attorney prior to just taking your husband's word on it.
Answer Applies to: Connecticut
Replied: 8/10/2011
Neville J. Bedford Attorney at Law
Neville J. Bedford Attorney at Law | Neville J. Bedford
I doubt it, but it depends. As long as he is the sole owner and person liable on the note, it is doubtful. If however, the debt is traceable to some asset that is now yours - like a new car bought with proceeds from a refinance, then he may have a claim in equity for the car, or his share of the value.
Answer Applies to: Rhode Island
Replied: 8/9/2011
Goolsby Law Office
Goolsby Law Office | Richard Goolsby
We recommend you retain a divorce lawyer as soon as possible and discuss all the facts, along with your rights and options, as to what would be an equitable property and debt division. Good luck.
Answer Applies to: Georgia
Replied: 8/9/2011
    Law Office of Roianne H. Conner
    Law Office of Roianne H. Conner | Roianne Houlton Conner
    If he is keeping the house he gets the payments as well as the negative equity. You will not be responsible.
    Answer Applies to: Alabama
    Replied: 8/9/2011
    Law Office of Patricia Van Haren
    Law Office of Patricia Van Haren | Patricia Van Haren
    You are most likely not responsible for 1/2 of the negative equity with him keeping the house. Additionally, if you are not on the loans or the title then it can be argued that the intent was for him to have a separate property residence. If he maintains that it is community property, you may request that you keep the home with him paying you the negative equity. You should seek a family law attorney for further assistance on this matter
    Answer Applies to: California
    Replied: 8/9/2011
    Meriwether & Tharp LLC
    Meriwether & Tharp LLC | Patrick Meriwether
    Equitable division is very fact specific and dependent on a variety of factors. In general, however, if a party chooses to keep a house, then they take the debt associated with that asset. There is no loss until the house is sold, and thus nothing for you to be responsible if he planned on keeping the home.
    Answer Applies to: Georgia
    Replied: 8/9/2011
    Law Office of James Lentz
    Law Office of James Lentz | James Lentz
    It means that the house is likely marital property and that it will be sold in the divorce with both of you responsible for negative equity. But there may be other ways of looking at this with additional information. Please see a domestic relations attorney near you.
    Answer Applies to: Ohio
    Replied: 8/9/2011
    Glenn E. Tanner
    Glenn E. Tanner | Glenn E. Tanner
    In Washington, the court makes a fair and equitable division of all assets and debts.
    Answer Applies to: Washington
    Replied: 8/9/2011
    Beresford Booth PLLC
    Beresford Booth PLLC | S. Scott Burkhalter
    This is becoming an increasingly difficult issue for the Courts to deal with. We took a case to trial with similar facts, and in that case, the Court awarded the house to the husband and all of its debt.
    Answer Applies to: Washington
    Replied: 8/8/2011
    Joanna Mitchell & Associates, P.A.
    Joanna Mitchell & Associates, P.A. | Joanna Mitchell
    That is not true. If the house is sold and there is a deficiency judgment, then it is possible that you could both be equally responsible for it. However, if he keeps the house against your wishes, then he should have to refinance and be responsible for any deficiency. However, there are multiple variables and facts that would need to be learned in order to determine what your potential rights and options are. You need to speak with an experienced attorney who can properly advise and direct you during your divorce proceedings.
    Answer Applies to: Florida
    Replied: 8/8/2011
    The Coyle Law Office
    The Coyle Law Office | T. Andrew Coyle
    A judge would have to determine if the house is a marital asset or not. If your husband purchased the house with his own separate funds (not joint funds) made outside of the marriage and his name is the only one on title, then the negative equity would likely be your husband's responsibility. There are several other factors that can come into play as well, though, so it is difficult to say what would happen in your particular situation. You should meet with a local attorney who can give you insight in how judges in your county would handle this particular case.
    Answer Applies to: Illinois
    Replied: 8/8/2011
    Gary Moore, Attorney at Law
    Gary Moore, Attorney at Law | Gary Moore
    You could be obligated on his debt, but, on the other hand, he could be compelled to sell the house in a short sale, by the Court.
    Answer Applies to: New Jersey
    Replied: 8/8/2011
    Petit & Dommershausen SC
    Petit & Dommershausen SC | Tajara Dommershausen
    This is too complex of a case to answer in this forum. If it goes to foreclosure, yes you would owe the bank of the short amount. If he keeps it, why would you pay him to do so?
    Answer Applies to: Wisconsin
    Replied: 8/8/2011
    Law Offices of Paul A. Eads, A.P.C.
    Law Offices of Paul A. Eads, A.P.C. | Paul A. Eads
    The house is valued at time of trial. The market may increase by then. He would need to refinance to take you off off loan. Otherwise a short sale may be in order with is split of difference as loan forgiveness is taxable income.
    Answer Applies to: California
    Replied: 8/8/2011
    The Law Offices of Robert W. Bellamy
    The Law Offices of Robert W. Bellamy | Robert W. Bellamy
    This question requires much more information than is provided. Any property bought during the marriage would be considered "marital property" subject to equitable division. Whether a spouse gets to keep a home would be up to the court depending on the facts. In that same vein of thought: who owes what on a mortgage, if the mortgage was not co-signed, would also be subject to interpretation by the court. Depending on the facts, the spouse claiming ownership of a house bought during the marriage, could loose possession of the house and still be responsible for making payments. The short answer is "it depends". This requires a detailed analysis by legal counsel since non-ownership spouse may have a vested interest in home through its upkeep. Typically, a spouse is not responsible for debts incurred by the other spouse unless she co-signed for it.
    Answer Applies to: Alabama
    Replied: 8/8/2011
    Linda C. Garrett Law
    Linda C. Garrett Law | Linda Garrett
    First, your husband is NOT an attorney. For this discussion only and temporarily assuming your facts are correct, your husband's response makes no sense. Here's why: first, if it's his separate property (as confirmed by the court), then the DEBT is also his. You said negative equity, but the issue is DEBT. For instance, house value $100,000 but you owe $200,000. The negative equity is $100,000. What it sounds like you (or your husband) are referring to is the $200,000 he owes the bank on the $200,000 loan-the debt. Should you divorce, the court, applying the law most likely will: 1) grant the house (equity and debt) to your husband-to which you have no legal responsibility for the balance owed (also known as "deficiency"); 2) if it turns out the house is COMMUNITY property, thus a community debt, then court will either: a) give house to husband-with ALL its value ($100,000) and all its debt ($200,000); or, b) order the house to be sold-with you both sharing in the possible debt owed to the bank for the balance owed after the house is sold. If it's option "b)", then you need to talk with an attorney, such as myself, who is experienced in both family law and mortgage-related issues (e.g. loan modification, foreclosure, short sale, etc.). There aren't many of us that have experience in both areas; therefore, feel free to contact me if you can't an attorney in your area to discuss this important additional sub-issue. Bottom line: real property issues are complicated and not black-and-white as your husband is representing to you. You need to speak with an attorney in order to confirm that the property is separate (or community), as well as determine the options available to you and your husband in connection with an "upside down" house.
    Answer Applies to: California
    Replied: 8/8/2011
    Law Offices of Arlene D. Kock
    Law Offices of Arlene D. Kock | Arlene D. Kock
    If the mortgage is a first deed of trust, then your not responsible for the liability if there is a foreclosure. He cannot have his cake and eat it too. If he keeps the house, he keeps the debt. If the house continues to slide in value, this will be his problem if the house is awarded to him.
    Answer Applies to: California
    Replied: 8/8/2011
    John E. Kirchner, Attorney at Law
    John E. Kirchner, Attorney at Law | John Kirchner
    From the limited information available, it isn't possible to contemplate what "being responsible" means. Debt, being the other side of the property coin, is relevant in determining the overall property settlement in a divorce and helps determine the amount, if any, of the value for an item that is otherwise considered marital property. If you are not listed as a deeded owner of the property and did not sign on to the loan, you have no legal liability to the lender. Generally, however, the negative equity amount is somewhat meaningless because the balance owed on the loan is the debt and the current market value of the house is less than zero, so there is no "property" to divide. Whether you should bear any "responsibility" in connection with other aspects of the divorce terms that apply strictly between you and your husband depends on knowing and understanding the rest of the financial picture. For example, if in addition to the negative equity there is a substantial cash savings account of more than the amount of negative equity, there might be an argument for or against an unequal division of that account based on the fact that keeping the house is more of a liability than an asset, but that eventually it may regain its value. There is not, however, any definitive rule that says the negative equity must be dealt with one way or another because it is the fairness of the overall property and debt allocation that will dictate what you and your husband should agree to, or failing an agreement, what a judge will decide.
    Answer Applies to: Colorado
    Replied: 8/8/2011
    Cody and Gonillo, LLP
    Cody and Gonillo, LLP | Christine Gonilla
    that is part of the overall negotiations and you may or may not have responsibility for it, especially if he wants to keep it
    Answer Applies to: Connecticut
    Replied: 8/8/2011
    Apple Law Firm PLLC
    Apple Law Firm PLLC | David Goldman
    You might depending on what the judge states
    Answer Applies to: Florida
    Replied: 8/8/2011
    Fox Law Firm LLC
    Fox Law Firm LLC | Tina Fox
    This can be negotiated as part of the marital settlement .
    Answer Applies to: Illinois
    Replied: 8/8/2011
    Law Office of Kathryn L. Hudson
    Law Office of Kathryn L. Hudson | Kathryn L. Hudson
    Unless your husband can prove that martial funds were used to buy the house or you otherwise co-mingled marital funds in the home, the house is his separate property and he should be responsible for any debt involved with it. He cannot on the one hand say you are responsible for half of the debt then claim it is his to keep, he cannot have it both ways.
    Answer Applies to: Arkansas
    Replied: 8/8/2011
    Wallin & Klarich: A Law Corporation
    Wallin & Klarich: A Law Corporation | Paul Wallin
    It will depend upon what money he used for the down payment, because if he used community property funds then you may be responsible for the negative equity or 50% of it even if home is in his name. This is extremely important and you should consult with an experienced family law attorney now.
    Answer Applies to: California
    Replied: 8/8/2011
    The Davies Law Firm, P.A.
    The Davies Law Firm, P.A. | Robert F. Davies, Esq.
    It means you go get a divorce lawyer, and get some help. No.
    Answer Applies to: New Jersey
    Replied: 6/26/2013
    Law Office of Michael W. Bugni
    Law Office of Michael W. Bugni | Jay W. Neff
    While there are always exceptions and special circumstances, the general rule is: The person who get an asset is also the person who gets the debt associated with the asset. What this generally means is that if your spouse gets the house in the divorce, he or she is generally get the responsibility for the mortgage as well. This general rule, however, can also be affected by what other debts and property the two of you have.
    Answer Applies to: Washington
    Replied: 8/8/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    First of all Georgia does NOT have community property so there is no 50-50 division in Georgia. Georgia does have equitable division of property, meaning that in a divorce a judge will decide who gets the property and who pays for it, and a judge can do a division in any percentage from 100-0 to 50-50. See a lawyer to assist you with your rights in your case.
    Answer Applies to: Georgia
    Replied: 8/8/2011
    Michael D. Fluke, P.A.
    Michael D. Fluke, P.A. | Michael D. Fluke
    If there is negative equity, the Parties' are generally both responsible. This does not necessarily mean he keeps the house. There are a number of factors that go into a divorce. Alimony, equitable distribution and child custody are all factors that may be considered in deciding who keeps the house and under what terms. I suggest you consult a local Family Law attorney to discuss your case in greater detail and learn all of your rights and options.
    Answer Applies to: Florida
    Replied: 8/8/2011
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