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Dividing the house in a divorce

Tennessee is an equitable distribution state when it comes to the division of marital property and debts during a divorce. However, the precise meaning of the word "equitable" when it is applied to a family home may require substantial compromise. After a divorce, the former spouses should be completely financially disentangled in every way that they wish. If they purchased a home together during their marriage, then they can sell it, or one partner can compensate the other for their interest in it.

If there is a mortgage on the home, then the partner who is staying in the home should refinance in their name alone. It is not generally possible to remove the a person's name from a mortgage without paying it in full and refinancing a new one. This can be a substantial obstacle during a divorce. The finances of both parties might well be at a low point, and the new mortgage will now depend on only one income.

Once the mortgage which involved the spouse who is leaving the home has been refinanced, then the departing partner can sign a quitclaim in the presence of both the other partner and the lender. This document gives up their legal ownership of the property, and this phase of the property division process will be complete.

All of the former couple's other assets will also be divided by a court in a manner which it deems fair, unless the couple can otherwise come to an agreement. In some cases, however, a judge's decision leaves neither party satisfied, and this is why many couples choose to negotiate a settlement agreement with the help of their respective family law attorneys.

Source: Total Mortgage, "How to Handle the House During a Divorce", Thomas Bepko, June 22, 2016

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