What would be a fair property settlement in a divorce where you owe more than the house is worth?

The title and mortgage is in my name. We owe 550K and the house is worth 350K. I want to keep the house and remain living there. The other option would be to foreclose but, then we are stuck with the difference, which neither of us can pay and I know she won’t pay it so, I would have to.

What is a fair settlement in this? This is the main sticking point to the divorce.

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    8 Responses to “What would be a fair property settlement in a divorce where you owe more than the house is worth?”

    1. Invisigoth Says:

      the fair settlement is that the person who gets the house takes over the mortgage and finishes paying on it while the other person is given something else that is of equal value to their equity in the house.

      if neither of you can afford to keep the house after divorce then you need to talk to a real estate lawyer about a short sell on the house and then the two of you negotiate a lower payment with the bank on what is left on the house and split the debt between the two of you.

    2. General Custer Says:

      The house will come back in value, so it should be considered a 0 in the split.

    3. ahermanns79 Says:

      How good do you want your credit to be? Never rely on what the "ex" wants or plans on doing. If you do not want your credit score to be messed up, keep the house and make the payments. The way the housing market it at this point, i wouldn’t worry too much about the value, just your own credit score. By the way, keep that in mind with all of your & your ex’s combined accounts. It does not matter if you are divorced or not, whatever your name is attached too will most definately be affected.

    4. dead can dance Says:

      If you want to live there after the divorce…your ex has to sell you his portion of it. But if I were you, I would sell it and split the difference on what you two owe on it. the housing market sucks for sellers right now, so keep that in mind.

    5. W. K. P Says:

      You answered your question already. You want to stay and she does not. If she doesn’t like the arrangement then have her pay half the mortgage.

    6. toofavorable Says:

      If she cant afford to pay for it then why would she want it for you to keep paying for it yeah right.I think whoever can afford it should keep it.

    7. daniel c Says:

      collect on her insurance policy…take her fishing …

    8. BabeHeart Says:

      If you want to keep the house and live there, then buy out her half (unless you bought the house prior to marrying, then it should be just yours), or rent out the house and split any profit you may make over the monthly note. No way to know if the value will ever reach what you owe on it, to be able to sell at anything other than a loss.

      Or let it go, although that would seriously screw up your credit. It would be foolish to suggest selling it and splitting the difference on what you are left owing on it, because neither of you would likely feel comfy trusting the other would pay their part in full…and that’s still approximately $100K each. I cannot imagine spending decades paying off a $100K bill and having absolutely zero to show for it.

      Tough situation man…really tough.