As we have discussed on previous blogs, Georgia is an equitable distribution state, which means that a division of marital assets does not have to be equal, but merely a fair division of property dependent on the particular circumstances of the case. A major asset to be divided in many cases is the marital home. The options for equitably dividing the marital home are complicated by the declining real estate market.
If neither wants to nor can afford to remain in the marital home, an option is for the parties to put the house on the market. In this case, the parties can work together with an agent, or alternate, with one party being in charge of the sale for 6 months and then the other party being in charge for the next 6 months. Of course, this option presupposes that the house will sell in a reasonable period of time, which, in this market, may not be the case. During the time the house is on the market, the parties will continue to be responsible for mortgage payments, etc., and must work out who will live in the house and pay utilities.
Another option is for one party to keep the house and refinance to take the other party’s name off the loan(s). This seems simple enough, but the refinancing party must be able to take on the entire loan. Since all of the marital assets will be split incident to the divorce, each party will most likely end up with only half of what the parties had as a married couple. In addition, in the case of dual income families, the parties likely qualified for the mortgage with combined incomes. Both of these issues may make it difficult for the party who wants to remain in the house to qualify to put the entire loan amount into his/her name.
Finally, no matter which option the parties choose or the judge orders, there is the very real possibility that the house is worth less than the amount owed on it. In this situation, the parties may be faced with the possibility of having to come to the table with money upon the sale of the house, or possibly foreclosing.