Real Estate Slump Presents Divorce Complications

When a married couple divorces, the property they own must be divided between the two spouses. Who gets the marital home has traditionally been one of the most contested property division issues in a divorce. Traditionally, the value of a home increases over time and therefore the home would have a large amount of equity that had been built up over the course of the marriage.

However, the economic downturn has had a profound impact on family law. Once robust retirement accounts are worth a fraction of their past value and many spouses have been laid off. Each change in the economy changes how couples need to structure divorce settlements, but the collapse of the real estate market has been an especially difficult issue.

The real-estate bubble has burst and this has changed the way many divorcing couples view their marital homes. With real estate inventory piling up on the market, there is no guarantee that a home would sell in a timely fashion or at a profit. Many homes are worth less than the amount owed on the mortgage and there is no guarantee that a short sale will be successful.

With many homes now seen as a liability instead of an asset, property division is becoming a more complex issue. Divorces that would have been uncontested divorces in the past are now turning into contested divorces. If you are considering or going through a divorce in these difficult economic times, it is important to consult with experienced family law attorney who takes a detailed approach regarding marital property division.

Source: The Star-Ledger, “Today’s real estate market calls for dire divorce decisions,” Sarah Portlock, 12/5/2010