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New Jersey Divorce: What to Do About the Family Home in a Recession
Divorcing couples have had to become more creative to deal with the current economic challenges surrounding plummeting family-home values.
December 24, 2011 /Law and Legal PR News/ -- New Jersey Divorce: What to Do About the Family Home in a Recession
Things have changed in the New Jersey economy for divorcing couples who own family homes. Historically, the marital house was usually the biggest family asset and the question in divorce was usually whether one parent should stay in it with the kids, if any, or if the home should be sold and the profit split between the spouses.
Now it is more likely that there may not be a profit at all if the house were to be sold because free-falling home values are pushing many below the amount owed on their mortgages. The question in divorcebecomes how to deal with the liability if an underwater house is sold at a loss.
With joblessness and low wages more common, there may simply not be the funds to allow one spouse to stay in the home even if it would be good for the children. Divorce under these circumstances often involves helping kids deal emotionally with unexpectedly losing their family home and neighborhood friends, and moving into a less appealing, smaller residence, at the same time they are already dealing with the divorce itself.
Divorcing couples have had to become more creative to deal with these challenges surrounding family homes. The answer for some has been the concept of "nesting" or "bird nesting." With nesting, the ex-spouses continue to own the home after divorce and the children live there with their parents, who rotate through, often on a weekly schedule. The parents may get a small apartment for each to use while the other is parenting in the family home. Alternatively, the ex-spouses might stay with their parents or other family or friends when not tending to the "nest."
Another possible solution is for the divorcing couple to share the home, sometimes with one taking the basement as living quarters, for example. With this arrangement, the couple may put off actually divorcing until the economy improves, or may go ahead with divorce with an agreement that they will live separate lives under the same roof until a future date or event.
Such cooperative arrangements are not possible for many couples, however, and they will need to explore other options like the short sale, foreclosure, refinancing, renting out the house or bankruptcy. Unfortunately a credit score can take a bad hit with some of these choices.
If a divorcing couple cannot reach an agreement about what to do with the family home, it becomes the job of the court to determine the house's fate. In New Jersey, the court facing a marital property division question must make an "equitable distribution." This does not necessarily mean an equal split down the middle, but rather a fair division considering all relevant factors.
If you are facing divorce, discuss your situation with an experienced family law attorney, including issues related to the disposition of your family home.
Article provided by Jeffrey S. Karl, P.A.
Visit us at www.jeffreyskarl.com
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