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  1. #1
    Join Date
    Sep 2016
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    Default Division of Equity in Home After Divorce and a Short Sale

    A couple divorced and their judgment provided that the wife would remain in the marital home, and that the equity in the home would be divided when the home was sold. The wife refinanced the home after divorce. Several years later, she was unable to afford the mortgage and the lender agreed to a short sale. The home was sold, and the lender wrote off the deficiency.

    Now the ex-husband is claiming that he is entitled to half of the equity in the home. There was no equity at the time of sale, as evidenced by the short sale. Does he have a claim to any money?

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: Division of Equity in Home After Divorce and a Short Sale

    The answer to that question depends upon the terms of the judgment, and also whether the wife withdrew any equity from the house when she refinanced.

    For example, if she was upside-down because she borrowed more than was owed on the home at the time of refinancing, then it is possible that the husband has a claim based upon the fact that she pocketed his share of the equity at that time. If the judgment describes the amount of equity in the home at the time of divorce, and states that the specific amount is to be split (perhaps after adjustment for interest), then the original terms of the judgment will apply and she will continue to owe that money.

    She will need to have the divorce judgment reviewed by a family lawyer who can advise her based upon a full understanding of the facts and the terms of the judgment.

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