How is a Mortgage Handled in Pennsylvania Divorces?

two people holding divorce papers

When going through a divorce, the division of assets weighs heavily on the minds of everyone involved. Splitting up a house and a mortgage can be one of the more complicated processes when dealing with divorce, but there are a few routes that a couple can take. If you are going through a divorce and have questions about assets including mortgages, contact a York County, PA divorce attorney.

What is An Equitable Distribution State?

An equitable distribution state refers to a state where marital assets are divided by a court in a way that is fair but not necessarily equal.

A community property state is the opposite and does not take into account the specifics of the individuals involved. All assets will simply be split 50/50 between each spouse.

An equitable distribution state believes that 50/50 splits are not always the best solution. For example, if one spouse has a much lower earning capacity than the other, they may be awarded more assets to balance out the difference. In many marriages, one person will resign from their work to take care of children or be a homemaker. Sometimes one spouse will turn down career or education opportunities to provide for the household while the other spouse goes back to school or takes on a new position. In an equitable distribution state, the court will take all of this into consideration to determine the lifestyle the couple has grown accustomed to and how each spouse will be able to support themselves.

How Can a Mortgage Be Split Up During a Divorce?

There are a few options that couples can choose from when determining the best solution for their divorce.

The first option, and the one most couples go for, is selling the house and splitting the profits. Whatever the sale was made for, a portion of the proceeds will go to paying off the existing mortgage. The rest of the profit can be divided between the couple whether that be 50/50 or an equitable split.

Another option would be for one spouse to buy out the other. If one person wants to remain in the house for whatever reason, a court can calculate the value of the house and determine what the other spouse’s profits would be if they did sell. The other spouse can then pay them what that amount would be either with money or additional marital assets. The mortgage will likely have to be refinanced with this option.

The third and final option couples can choose from is to essentially do nothing. In this scenario, both spouses would remain joint owners of the home. Couples may choose this if they have children and do not want to uproot their lives. By keeping the house, the child can remain in the same home and school district. The house can be sold or bought out at a later date.

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