During a divorce, division of community property is typically a big issue. Community property is considered almost anything the two of you acquired while you were married. Exceptions may include gifts, personal injury payments or any inheritance received during the marriage. Anything either of you owned before you got married is personal property and is not subject to be divided. 

If you bought a house together after you got married, as most couples do, it falls under the heading of community property, as does any business either of you may have started. Typically, the home is the greatest piece of community property and as such, is often a point of contention for couples seeking divorce.

The biggest decision concerning the house is whether one of you will keep it and continue to live in it or if you’ll be selling it and dividing the proceeds of the sale. If there are children in the marriage, the burden of making this decision can become even heavier, since their needs will have to taken into consideration as well.

Your home represents, not only financial value, but in many cases, emotional or sentimental value that may weigh more heavily than any potential monetary gain. Ideally, you and your spouse will be able to come to an agreement as to the disposition of the house. Otherwise, the court will make the decision for you.

If you choose to keep the house, you’ll have to buy out your spouse’s interest in it and typically set up a new mortgage under your name. It’s important to consider whether you’ll be able to maintain the payments and the upkeep on the house once the divorce is final.

Whatever decision is made on whether to keep or sell the house, you must keep in mind that you are jointly bound by a legal contract to pay off the mortgage and a divorce settlement does not, in any way, change this contract with the creditor.  Any amendments in the mortgage agreement can only be made with the agreement of the creditor. The creditor, in order to safeguard his investment, seldom permits this.

You should seek the advice of a mortgage professional, your attorney, or a financial divorce specialist. Each state has different laws and every divorce occurs under different circumstances. Your particular situation will need to be evaluated by someone familiar with the applicable laws of your state and your unique circumstances.

If neither spouse wants to keep the house, or if neither of you can afford to pay for it on your own, it’s probably in your best interest to sell it and share whatever profits the sale brings. This would have to be agreed on by both parties. Some states even have automatic procedures in place that prohibit the sale of the house without approval from each spouse or from the court.

There are also good reasons for a spouse wanting to keep the house, especially if children are involved. It provides them a place of continuity during an extremely emotional and upsetting time. If the house originally belonged to family members, that may also sway the decision not to sell it.

On the other hand, it may be too emotionally painful to remain in the house you occupied during happier times. Even the children could possibly benefit from a ‘fresh start.’ This may be a good time to consider downsizing from a large house with a hefty mortgage to something smaller and more affordable. Spend some time re-evaluating what your new needs will be. You may discover that the marital house served its purpose, but no longer makes sense for you to keep it.

There are many factors to be considered when deciding what should be done with the house in a divorce and only an expert can give you the tools you really need to make an educated and informed decision.