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  1. #1
    Join Date
    Feb 2011
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    2

    Default Negative Equity Marital Home in Michigan

    My question involves divorce in the State of: Michigan

    I make about $145K. She is not working now, but has worked part time on and off for the last 3-4 years. Per an appraisal, we have about $65K in negative equity on our home spread across a first mortgage and a second home equity line. We have 4 kids - software prognosticator indicates about $2600 in child support per month. We are trying to mediate the divorce right now. I also expect to pay some spousal support but hope to minimize that. I have retirement (401K) balance of about 160K. Some stock assets about balance out with some short term debt (credit cards, medical bills, divorce legal fees).

    She has moved out with the kids and I am living in the marital home. I do not think I will be able to afford the house payment (about $2200 per mo) after the divorce unles the spousal support is near zero. On the negative equity, can I expect to get her to buy out her share of the negative equity? Even if she does not pay now, could I expect to get it agreed in the divorce decree that she is responsible for her share of that negative equity? I am getting some signals from our mediator and my atty that it is hard to call what a judge would do on this. I am looking for any advice and would really like to know about any past precedence in Mich on this. Seems fair that if assets are to be shared, then liabilities (especially the big ones like this) are also shared. If that is not how it works, can someone explain the rationale why it would be acceptable to have the assets shared, but not the liabilities (or have them shared in different %ages)?

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: Negative Equity Marital Home in Michigan

    Above and beyond the marital home and your 401K, your marital estate includes what?

    If you stay in the home, a common approach is to resolve issues of equity when the home is sold. That could be complicated if the equity remains negative at that time. If you don't stay in the home and there's a deficiency after selling the home, that would normally be a liability of the marital estate and be subtracted from the value of the marital assets when making the property division.

  3. #3
    Join Date
    Feb 2011
    Posts
    2

    Default Re: Negative Equity Marital Home in Michigan

    Not much there in the marital estate besides the house and 401K. There is about $10-12K in stock/options. But there is about the same amount of bills/debt. Also, right now, I live in the marital home, but that is not necessarily because I want to. She moved out with the kids already. She does not want the home, but neither do I if I cannot afford it or unload it or get her to take some responsibility for the negative equity.

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