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Divorcing your home - why some couples stay together

The recession and its long, slow economic recovery have put married couples desiring to get a divorce in a tight financial spot. Marriage dissolution has become harder with jobs so scarce and the real estate market at a low point. For many, divorce is now as much of a financial consideration as it is an emotional one - property division can be a source of contention.

Divorcing couples who can't walk away from a marital home due to its low value have difficult choices to make. Mortgage data researchers of RealtyTrac say nearly 4 million properties are hovering in delinquency with foreclosures waiting to happen.

Some couples stay together despite marital strife and live like unfriendly roommates hoping for an upswing in the real estate market. Selling the home during the divorce process often leaves the couple in a worse financial situation than before. Legal experts say any upward shift in the value of properties may be years away.

Short selling is not always an ideal solution. Some lenders will be happy to take a property, but never quite release the former homeowners from full liability for the mortgage shortfall or partial tax responsibility on the loan.

Modifying a loan is also a possibility, but it can be a lengthy process and complicated task for partners who would rather not be with one another. Trying to salvage a house by paying for it with retirement income leaves a murky financial future that experts say is best to avoid.

Because of the housing market, taking on even more debt becomes a reality for many. Divorcing with unaffordable debt has led many couples to reconsider staying together, at least until a sound financial decision can be made to avoid more hurt than the split itself.

Source: Huffington Post online, "Are You Staying Together For the Home?" Natalie Pace, 29 June 2011

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