Splitting up your belongings is one of the biggest challenges at the end of a marriage. You and your spouse may disagree about what is fair. Both of you may have strong attachments to the same property. Different personal and family factors can make property division even harder to resolve.
One of the more common property division complications is when you don’t actually own the asset outright. Many people finance big purchases, which means that their largest assets also have debt attached to them.
Houses and vehicles are among the more valuable assets that may serve as collateral property for financing. Dividing financed assets can be a challenge in some divorces.
One spouse may need to refinance
Virginia law requires an equitable distribution of your assets in debts. In other words, the outcome of your property division proceedings should be fair to both of you, given the circumstances. In most cases, one spouse can’t just keep the majority of the shared assets without compensating the other.
Whether you owe two-thirds of the price of your car or still have 10 years left on your mortgage, refinancing may be necessary during a divorce. The spouse retaining the financed asset will want to remove the other spouse’s name from the ownership paperwork and from the loan.
They may also be able to withdraw some of the equity accrued in the asset to compensate their spouse if that is how they decided to handle the property. In some instances, other assets could be used to offset the established value in a financed asset to make things more fair and even. Thinking about property division challenges can help you better prepare for your upcoming divorce.