Dividing the value of large marital assets, such as a house, is an important part of many divorce proceedings. It can also be one of the most complex. Arizona residents may be interested in various strategies for dealing with a house during a divorce. There are also some important aspects of property ownership and debt that may catch people off guard during divorce if they are not prepared.
If a couple is not yet separated but is planning to divorce in the near future, then certain steps are likely to be taken if either spouse intends to buy a new property. Unless the buyer’s spouse signs a quitclaim deed, that spouse will automatically be a joint owner. This could entitle that individual to a portion of the property during the divorce, even if only one person paid for the property.
The situation can also be less than ideal after the divorce has occurred. Even if one person keeps the home after the divorce, the property transfer does not automatically translate over to the mortgage. For example, while one person’s name may no longer be on the deed to the property, it will be on the loan until the other spouse refinances that loan under his or her name only. This means that for liability purposes, the property is still considered jointly owned. If the individual who keeps the house is not making timely payments or defaults on the loan, the one who moved out could still be liable to the creditors.
Each state has its own laws regarding property division laws. Arizona is a community property state, so marital property will be divided as equally as possible if the divorce enters the court system. However, most divorces are resolved before that point.