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How A House & Mortgage Is Addressed During A Divorce

How A House & Mortgage Is Addressed During A Divorce

Among the most valuable and difficult-to-divide assets, understanding how housing and mortgage is addressed during divorce will help you plan for a fair split. Unlike other shared financial assets that can easily be divided down the middle, housing, and mortgage division often comes with additional baggage such as appraisals, refinancing, and other factors that may require compromise and careful consideration. 

So, how is this important financial topic addressed during divorce? In the state of New York, couples have a few options when approaching the division process. If a prenuptial agreement determining asset division was not established before marriage, couples can choose to:

  • Draft an asset-division agreement outside of court: Through neutral mediation, it’s possible to create a legal and amicable division settlement without stepping foot inside the courtroom.
  • Pursue litigation: If couples are unwilling or unable to discuss the terms of their financial agreement outside of court, a judge will have the final say based on equitable distribution in the state of New York. This may involve legal hearings, presentation of evidence, and relevant arguments from both sides. 
  • Seek alternative dispute resolution: While less common, both sides can present their terms to a third-party arbitrator who makes a legally binding decision and submits the documentation to the courts for approval. 

What Happens During Divorce Mediation Negotiations?

If a couple is willing to discuss and agree to each other’s financial terms outside of the courtroom, divorce mediation is the best option. With the guidance of a neutral legal advisor to ensure compliance with all legal obligations, all relevant financial subjects are organized and divided as fairly as possible. After both parties sign off on the terms of the agreement, the documentation is submitted to the courts for final approval. 

While determining fair division of assets, an experienced divorce mediator will help you: 

  • Understand your rights, obligations, and how the mediation process works
  • Gather and organize all necessary financial documentation to accurately divide assets and determine which legal financial requirements you must comply with, such as alimony and child support if applicable to your situation
  • Guide the discussion in an equanimous manner to help you and your spouse reach an amicable and fair agreement that supports everyone’s needs
  • Draft a legally binding agreement and ensure that you both agree to the terms before signing and submitting documentation to the courts

Choosing the Right Option for Your Divorce

Of course, your housing and mortgage division will be included in the financial discussion and final agreement. If your home or mortgage is considered marital property (you acquired the home or loan after getting married), there are many ways the final division can go. For example, if you have children together, it may be best to retain the home. In this case, one spouse member may choose to refinance the home in their name and/or buy the remaining shares of the home from the other spouse. Alternatively, for some couples, it is best to sell the home, divide the liquid assets, and find new living arrangements. 

While divorce mediation is a more viable option for many couples, not all couples can approach their divorce through mediation. If traditional litigation is the route you choose, equitable distribution guides the court’s approach to asset division. It’s important to note, that equitable distribution does not necessarily mean an equal split. The court aims to achieve a fair distribution based on a variety of relevant factors like income, length of marriage, physical/mental health, child responsibilities, and many other considerations that influence the final division decision.

As you can see, many complex factors affect the decision that is best for your situation. If you’re hoping for an outcome that is fair and agreeable for everyone involved, contact our pros at Long Island Divorce Mediation and avoid an unpredictable courtroom verdict with our simple process.


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