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Tackling the "liability" of marital property after divorce

Whether a divorcing couple brings in a substantial income or whether they are just getting by, one of the biggest sources of distress can be the family home. Even the most modest of homes can hold the majority of a couple's assets; thus property division can be one of the most stressful aspects of ending a marriage in Texas.

One of the more complicated elements in property division is how to deal with an existing home during the divorce. Often one spouse will want to move out, or one or both spouses will want to relinquish their interest in the property in order to move on. It's helpful to know that while a divorce decree can give the home to one spouse or the other in some cases, there are likely extra steps that need to be taken in order to remove the home as a liability under their name.

Sometimes, after the divorce, one spouse will want to purchase a new home but the other spouse, who is keeping the previous family home, doesn't qualify for a mortgage on their own. As a result, the moved-out spouse is not able to be refinanced off of the property.

In this situation, if the spouse who still has the family home absolutely cannot refinance, he or she may be able to sell the home in order for the moved-spouse to be able to qualify for a new mortgage with another lender. If not, the prior family home is likely to still show up as a liability on that spouse's debt-to-income ratio.

It's also important to remember that if one spouse purchases a new property while he or she is still married, a quit claim deed may be extremely beneficial in releasing the other spouse's interest in the new property. Finally, it's often said that timing is everything, and that's especially true when it comes to divorce and asset division in community property states such as Texas. Speaking with a qualified family lawyer can help shed light on the often complex matters at hand.

Source: Credit.com, "How to divide your house in a divorce," Scott Sheldon, July 9, 2014

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

She will take the time to understand your individual needs and develop a comprehensive solution to protect your rights and interests.

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