What to do if I need to buy my ex-wife out of the marital home based on 1/2 the equity in the house but there’s no equity?

UPDATED: May 31, 2012

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What to do if I need to buy my ex-wife out of the marital home based on 1/2 the equity in the house but there’s no equity?

Based on an official appraisal, we owe more on the house than it could sell for, do I still need to “buy her out”, or does is she just removed from the title, and I don’t have to pay her anything? Additionally, while we’ve both been on the title, I am the only who who has paid the mortgage for the past 8 years (she stayed at home with the kids), can I use that she has put no money into the house as leverage should she still expect I buy her out?

Asked on May 31, 2012 under Family Law, Maryland


John Grubb / John K. Grubb & Associates, P.C.

Answered 10 years ago | Contributor

In this case what you are dividing is not an asset, but rather a liability -- a debt.

And there is one hugh problem:  when you and your wife signed the loan both of you promised to pay the mortgage company -- whether you are happily married or divorced.  There is nothing a divorce court can do to erase this obligation.

It is important that you obtain the services of an attorney -- you would not try to remove your own tumor and do not try to do this divorce yourself.

In Texas the way we would typically handle this is for your soon to be ex to sign a Special Warranty Deed on the house conveying it to you for the consideration that you assume and promise to pay the mortgage company.  Then you would sign a Deed of Trust to Secure Assumption which permits her to foreclose on you if you fail to pay the mortgage.

John K. Grubb     www.johnkgrubb.com

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