If you are getting divorced and have to divide your assets, including a house and mortgage, it can be complicated and overwhelming. For legal advice and representation during your divorce, contact an Oakland County property distribution lawyer who can help.

Is Michigan an Equitable Distribution State?

Yes, Michigan is an equitable distribution state. A few states do not have equitable distribution and instead are referred to as community property states. This means that during a divorce each spouse is entitled to exactly half of the property and assets, regardless of the specific circumstances of the marriage.

In an equitable distribution state, assets are divided in a manner that is fair and equitable, not always equal. Equitable distribution is important because sometimes spouses make sacrifices and take on different roles. If a couple decides that one spouse should quit their job to take care of the children then that spouse will probably have been out of the workforce for an extended period, relying financially on their partner. Now that they are getting divorced and will have to find a way to support themselves, they are at a disadvantage. Because of their time out of work, they have a lower earning capacity than their spouse who has been working and benefited from the sacrifice of their spouse.

What Are My Mortgage Options When Getting a Divorce?

When it comes to splitting a mortgage during a divorce, there are a few options that a couple may choose from. Typically the spouses will decide between selling the house, one spouse buying out the other spouse, or both spouses continuing to co-own the home. Here is a breakdown of how each option can work.

  1. If you and your spouse decide to sell the house during a divorce you will be with the majority of divorced couples. Selling is a popular choice because it is a cut-and-dry option that leaves little room for debate. You would put the house up on the market and once it is sold use the money to pay off the remainder of the mortgage. Whatever profit is left over after paying off the house can be distributed between each spouse equitably.
  2. One spouse may decide that they want to keep the house. In this case, they can buy out the other person by paying them their share of the value. This option can be complex to figure out but not impossible. The mortgage will likely be refinanced to reflect only the remaining spouse’s name.
  3. The final option is to not sell or transfer the deed in any way. Remaining co-owners may not work for every couple depending on the nature of their relationship, but it might be the best choice for some. For example, if you have children and want them to be able to stay in their childhood home and continue going to the same school, it might be worth it to hold onto the house. One spouse may decide to move out but maintain partial ownership or each spouse may rotate staying there.