“Getting the house” — once the end all, be all of divorce settlements — is becoming a recession-era hot potato for splitting couples.Reduced liquidity, homeowners insurance, underwater mortgages, shoddy neighbours, and a dour housing market spell doom for divorcees who can barely afford the payments, let alone the emotional stress of trying to rid themselves of the house or save it, writes Marcelle Sussman Fischler in Forbes.
It’s just another sign the financial crisis has changed our attitudes toward debt, perhaps for the worse.
Despite good intentions to keep their kids in a stable environment or not wanting to go through the hassle of moving, this emotional decision often backfires when parents find themselves unable to make payments or sell their home to downsize. Such a decision could result in damaged credit, making it harder to secure a loan to start over in a new home or even rent in some areas.
Likewise, house debt can impede a divorce altogether, due to complications arising from parents who do want to move and take their child.
The American Academy of Matrimonial Lawyers reported last month it saw an 85% increase in divorce settlement complications over housing debt in the last three years, with more than half (53%) of the respondents noting a rise in relocation requests for children in custody. However, only 21% of attorneys surveyed noted a rise in these requests being granted, a possible sign these parents are wasting thousands on attorney fees while sinking money into a home they no longer want or can afford.
The situation has led two real estate pros, Wendy Waselle and Kelly Lise Murray, to found divorcethishouse.com, a movement to sponsor “legislation state-by-state to improve ‘divorce real estate’ and provide homeowners with guidelines early in the breakup process,” starting in California and Tennessee, writes Fischler.
While we applaud the movement, we can’t help but wonder whether real estate certification is enough to fix an already broken housing market and countless broken homes. The government stepped in last year to fix the robo-signing crisis, but with nearly 3.4 out of every 1,000 couples splitting ways each year, according to the centres for Disease Control, this is a significant issue for families across the U.S, and one we suspect will stifle the children’s happiness.
Losing a home is painful enough for adults, what does it mean when displacing a child? Issues of switching schools, finding new friends, and dealing with bitter parents aside, living under the same roof with divorcing, anxious parents who are swimming in house and attorney debt — while possibly facing foreclosure — sounds like a living nightmare.
What do you think: Should the government regulate what happens to a house of divorce?
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