In a normal economy, couples typically build equity in their homes, then divide that equity in a divorce, either after selling the house or with one partner buying out the other’s share. But after the recent boom-and-bust cycle, more couples own houses that neither spouse can afford to maintain, and that they cannot sell for what they owe. For couples already under stress, the family home has become a toxic asset.
Dee Dee Tomasko, a nursing student and mother in suburban Cleveland, expected to leave her marriage with about $200,000 in starter money, primarily from the marital home, which was appraised at about $1 million in 2006. By the time of her divorce last year, however, the house was appraised at $800,000; her share of the equity came to about $105,000.Though she is relieved to be out of the marriage, if she had known how little money she would get “I might have stuck with it a little more; I don’t know,” Ms. Tomasko said, adding, “Maybe it would’ve made me think a little harder.”
My BF had a similar situation. He was divorced in the Spring of 2008 and he ended up with the house for two reasons: First, his ex wanted to be bought out, and second he has a big dog which he believed would make it tough for him to find a rental. Also he just liked the house and wasn't so inclined to move. However he had to take out a large personal loan to buy her out of the house and settle their debts. I agree that the current housing crisis has created a different tone in divorces. Before couples used to fight over who kept the house, now they are fighting to not be left with it.