Jan 30, 2008

Divorce Settlements Held Up By Poor Housing Market

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Getting divorced? Thinking you'll sell your house and both of you can use the money to start fresh? In these subprime, foreclosure-happy times, think again.

In many divorces, the family home is the biggest asset to be divided. Divorcing couples have a few different options for dealing with the house: (1) the spouses continue to co-own the house; (2) one partner stays in the house and buys out the other partner's share; or (3) the spouses sell the house and divide the proceeds.

Option (1) is the only one not affected by the current slow housing market nationwide, and it tends to be the least desirable option because it keeps divorcing spouses connected to each other at a time when they're likely to want to get things done and move on. For couples who want to sell their house or who agree to a buyout, a weak real estate market can hold up a settlement indefinitely, as described by Kathleen Megan in this article.