Is a Home an Asset or Debt in Divorce?

There are a few constants in life: death; taxes; and, upon reaching adulthood, being told a home is your single greatest investment.

And for most people that’s true. It’s where, unfortunately in my opinion, we keep most of our wealth. (Don’t get me wrong, home equity is great, but it should be only one part of a person’s overall wealth, not the majority of it.)

But what about divorce? Is a marital home as asset (i.e., a positive) in divorce, or a debt (i.e., a negative)?

The answers to these questions depends on the home. In fact, there are three primary answers to these questions:

  1. If your home is paid off, it is anasset. This is because you don’t owe anything, so the entire value of the home is yours.
  2. If you still owe on your home and don’t have any equity, your home is adebt. In other words, if you’re upside down, you’re in in deep.
  3. If you still owe on your home and have positive equity, your home isa debt and an asset. Since you owe on your home, it’s be definition a debt. However, since you have positive equity in the home, and you would make money if you were to sell it, your home is also an asset.

As an example, say you owe $100,000 on your home. You could sell the home for $200,000. So, it’s a $100,000 debt that needs to be addressed in divorce, but it’s also a $100,000 (less costs and fees associated with selling the home) asset that needs to be divided in divorce.

What’s Normal in Divorce

Usually, people who own homes haven’t paid them off (on average, people live in a home for seven years before buying a new home), but they have positive equity. So, most people going through divorce have to deal with their home as an asset and as a debt.

P.S.: This post was meant to be a simple explanation about how to think about a home in divorce. For more on how we usually deal with homes in divorce, read here.

Protect Your Money And Your Family

We remove fear associated with divorce, protect your money & maximize time with your kids!

We're here to help. Let's determine your best options.

Call Us 24//7 at 801-685-9999 to Speak with a Live Representative

Utah Divorce FAQs
Top 100 Divorce Blog
What Clients Are Saying…
BrownLaw icon
Excellent
Brown Family Law
Based on 1019 reviews
Daniel Young and Carren Leavitt did an awesome job working on my case. Their commitment and dedication was great. They kept me updated at every stage of the case until it was finalized. I would greatly recommend them.
Definitely the team to trust with such a difficult situation. I 100% recommend brown law especially my attorney Leilani to anyone needing help with their divorce as I did. Leilani thank you
Dani is awesome!
Brown Family Law was super great and comforting in a stressful time in my life.
I’m so glad I had them.
Nick was fantastic!
Response from the owner:Thank you, Teri.
Dani is extremely helpful. I am grateful for her professionalism.
Worked with Nick and Carren they did an awesome job with a difficult situation. The whole Brown law team was excellent to work with. I would highly recommend them to anyone that needs thier services. Thank you Nick and Carren also the rest of the team. On a side note everyone i delt with was very friendly! Thank you again!
Clay is the best
Clay was fantastic. I really appreciated his professionalism and knowledge. I would absolutely recommend him to anyone needing his services.
Helped me with everything, supported me in all my decisions! Communication is top notch! Never worked with a lawyer who was so easy to get a hold of! They are the best!
Daniel is a wizard. He’s incredibly knowledgeable and has a real gift for walking you through stressful situations with clarity and calm. He makes the process feel easy when it could otherwise be overwhelming. Highly recommend working with him!
yH5BAEAAAAALAAAAAABAAEAAAIBRAA7

Categories