This is the second post in my series on how the increase in Las Vegas housing prices impact divorce in our city. My last discussion served as an overview of the types of issues Las Vegas homeowners face when going through a divorce. In this article I will be addressing what is a common situation – how the Clark County Family Court will proceed in matters when there is negative equity in the home.
Divorcing Las Vegas couples often have to deal with having negative equity in the marital residence
Las Vegas still has a high rate of homeowners who have negative equity in spite of the recent increases in housing prices. This leads to two common situations. First, many parties are afraid that if they get divorced then they will be responsible for half of the negative equity. Second, many spouses wish to absorb all of the negative equity in exchange for keeping 100 percent of other assets – such as their retirement accounts. It is important to understand how Nevada law treats each of these situations.
Southern Nevada Family Court Judges have understood the situation created for many Las Vegas couples by the 2008 housing collapse. It has been common for one party to request that, if they are keeping an upside down home, that the other spouse be responsible for half of the deficiency. The Court will typically grant these types of requests without an agreement from both sides. When the house is upside down then the Court will usually require that the parties put it up for short-sale or require the party keeping the house absorb the entire mortgage. In other words, a party cannot keep the house simply because they want it while leaving the other side with extensive debt.
A Court will also not allow one to keep an upside down house, as a way of keeping extra assets, without both sides agreeing to it. The Courts have been following these practices for the last several years for obvious reasons – the collapse of the housing market would leave many parties unable to get divorced without this type of approach.
Consult with an attorney regarding how your mortgage impacts any Las Vegas divorce case
Dealing with community property issues can be highly confusing. Hiring a Las Vegas divorce attorney who understands how the Court views home values, mortgage obligations, and the valuation of other community assets will assist you in ensuring that your interests are fully protected. Contact my office today for an initial consultation.