Getting a divorce is a pretty stressful thing. There are a lot of decisions that need to be made, and some will affect one's financial standing when the divorce is all said and done. Dealing with an underwater mortgage is a very real concern for many divorcing couples in Massachusetts. Luckily, there are options available in such situations.
The marital home is often the biggest asset a couple might have between them. Unfortunately, this is not always a good thing. When a couple owes more on their home than it is worth, it can make deciding what to do with the property during divorce rather difficult.
Selling an underwater property is possibly an option through the short-sale process. This can hurt credit scores, but it may be worth it so that both parties can walk away from the property. However, some couples may choose to hang on to the home and wait for property value to increase. Homes can be rented out, or one or both spouses may continue to live in the property until selling it for a profit. Both spouses will be held legally responsible for making payments, though, which can cause financial issues if one is not willing to share the load.
At the end of the day, every couple is different, and how one chooses to handle an underwater mortgage situation will vary based on personal preferences. One's legal counsel can provide guidance as to how to deal with this and other concerns that will affect not only a divorce settlement but one's future financial standing as well. Divorcing couples in Massachusetts are not alone. Legal guidance can be sought so that the best decisions for their particular circumstances are made.
Source: Time, "What Happens to Your Mortgage in a Divorce?", Ashley Eneriz, March 29, 2016