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Paul E. Riffel Tampa Estate Planning Attorney

Under water homes

The burst in the housing market has complicated divorces.

Many homes are now considered “underwater.” That means the homeowners owe more on the home than they can sell it for.

Because of this, the home is considered a liability, not an asset, and it must be treated that way in court. And no matter what the court rules in the divorce, if both parties have signed the promissory note, they are both liable for that debt. That means a creditor can sue either party for 100 percent of the debt, regardless of the divorce decree.

People in this situation might consider a short sale or ‘deed in lieu of foreclosure’ to deal with this issue and to lessen both parties’ liabilities.

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