Financial Settlement, Debt, and Home Loans. More Money. More Problems.
What Happens to Home Loans, Mortgages and Properties After Divorce?
One of the biggest concerns of parties whose marriage has broken down is what happens to financial resources and debt during this process. When it comes to matrimonial assets, one of the main considerations is whether the party who resides in the main property has the capacity to maintain the residence during interim and final proceedings.
Whilst it is important that the matrimonial home is maintained during family law proceedings, it does not necessarily result in whoever lives in the home during this time to retain it. In the absence of a binding financial agreement (or prenuptial agreement) between the parties, the first and foremost process of finalising financials will always be mediation.
Sale of Property and Debt
Importantly, if the matrimonial home is to be sold in the financial settlement, parties need to be aware of the terms of agreement of any Court Orders, the fees and expenses associated and incurred in the sale process as well as taxation implications. Debts should be similarly assessed to matrimonial assets, to ensure future fees and demanded payments can be met by both parties.
Depending on the size of the asset pool and the property which is to be sold, Capital Gains Tax (CGT) can be significant, in addition to stamp duty if a property is being transferred to the other party. It is recommended to seek family law advice both from a family law specialist and financial accountant on your position in relation to the dissolution of matrimonial assets in financial settlements.