Negative Equity in a Home Thats in My Spouse's Name Only

[EmilyK]

My question involves a marriage in the state of: Ohio

I am wondering how a court handles negative equity in a home during a divorce. I have been separated from my husband for a year. He lives in our marital residence and pays the mortgage which is in his name only. His intent is to keep the home because he has custody of our kids and wants to keep them there. But he tells me that he owes $270K and its only worth $230K so he wants to offset other assets I would receive with this negative equity. Is this typically what a court would do or does he actually have to sell the house first? Since my name is not on the home does that make a difference?

[flyingron]

They'll usually want a satisfactory appraisal of the value. The FMV at the time of the divorce is an asset, the mortgage is a liability. Everything's added together to compute the equitable distribution.

[Mr. Knowitall]

If one spouse keeps the home it's not unusual for issues of payoff and division of (traditionally) equity to be postponed until such time as the home is sold or the kids move out. I suspect your ex- is proposing this approach because it will work to his overall benefit.

[davehalo]

my example is from CA. here if the house has negative equity then it has zero asset value for property division. if that is the same condition in OH, then your attorney should advise to not accept any off-set of other assets to make-up that $40k difference.

[flyingron]

Ohio is not a community property state like California.

The rules for equitable distribution are pretty much as I stated. If there is indeed negative equity, that amount would be considered in the distribution.
Of course, if you are liable for the mortgage that can't be practically refinanced, other issues come into play.

What does your lawyer say about all this?
With substantial property issues and CHILDREN involved, you need a lawyer.