house underwater

[meandmyboy6]

the stbx is leaving! she can't pay the morgage, the house is underwater aboyt $50 grand yet she is asking for half the value (the house is work $200 grand). I want to avoid court and settle. I offered to take the debt that is my name and for her to take the debt that is in her name and we split the debt in both our names. do I have to pay half the value? I understand it if we had equity, but we don't.

[lohe]

If she's asking you to pay half of the 200k that the house is worth she's smoking some pretty good stuff!

Sell the home, whatever debt is left you have to split.

[meandmyboy6]

Thanx..that what I thought. I want to stay in the home I can afford it, she can't.

[spritom]

Intrinsic value of house: $200k
Outstanding Mortgage: $250k
Net value: -$50k

Send her a bill for $25k when it's sold...hehe. But there's no money in the house. In fact, if the agreement was for you to keep the house and stay with it, then it would be $50k in assets for her to move from her side of the balance sheet to yours in the final agreement.

[Fatheroffour]

Point out to her that bt assuming the debt she owes you her car and some 401K.

[lohe]

If you can afford to keep the house and want to I would push to do so.
She can pay you her half of the 50k or you can use it to offset other things
you owe her?

[notsurewhyinil]

I am in a similar situation and kind of getting conflicting information. I might be completely wrong as I am trying to figure it out myself.

I know that, for non recourse states like CA, the underwater mortgage most likely gets zeroed out meaning whoever takes the house takes the debt but is not part of the marital spreadsheet. For others, it's not very clear.

I live in Illinois which is a recourse state. My STBX pre-trial memo says that house is under water and should be put on short sale ASAP. Also, in my case her name is only on the title and not on the mortgage so no need of refinancing as well.

When I asked my attorney, he said I might be better off doing the short sale or deed in lieu as why I would want a debt. I asked him if I want to keep the house will the house debt gets zeroed out. he said it cannot just go away but then he said, judge will decide based on what is best for the marital estate.