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Negative equity and divorce

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MaxT View Drop Down
Newbie
Newbie


Joined: 20/May/2017
Location: Australia
Posts: 3
  Quote MaxT Quote  Post ReplyReply Direct Link To This Post Topic: Negative equity and divorce
    Posted: 20/May/2017 at 19:15
My wife and I are close to divorce. The house we currently own together is valued at about $35,000 less than the mortgage (wonderful hey?!).
I understand that in a regular settlement one person may pay the other out (value of home minus mortgage), but as my wife has a low paying job and couldn't afford repayments, what happens to her in a negative equity situations if I take over the mortgage?
Any advice appreciated.

Edited by MaxT - 20/May/2017 at 19:16

citizen-joe View Drop Down
Senior Member
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Joined: 09/October/2005
Location: Australia
Posts: 404
  Quote citizen-joe Quote  Post ReplyReply Direct Link To This Post Posted: 21/May/2017 at 00:22
I would imagine that in the absence of any other assets she will walk away breathing a sigh of relief.

However all assets, including superannuation should be taken into account. Children and where they live is also taken into account. Perhaps if you were to ask a more detailed question, someone with more experience than me may be able to help you.

MaxT View Drop Down
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Joined: 20/May/2017
Location: Australia
Posts: 3
  Quote MaxT Quote  Post ReplyReply Direct Link To This Post Posted: 21/May/2017 at 06:32
So children 50/50 access. Assets would likely be under $35k. I know in a settlement a partner is entitled super accrued during relationship, but do they get this as a lump sum payment?

emca01 View Drop Down
Legal Guru
Legal Guru


Joined: 20/July/2012
Location: Australia
Posts: 2179
  Quote emca01 Quote  Post ReplyReply Direct Link To This Post Posted: 21/May/2017 at 07:06
PROBLEMS - lots of them...
So super can be divided, a chunk of yours would go into her super account. She can access it when she is old. BUT - the only way to get that done legally is if you both go get independent legal advice (solicitors) and pay for court orders... Now there is some merit in doing that - for you, the benefit means that it is done and dusted AND you can get consent orders relating to the kids done at the same time... So while she has agreed to 50/50 with the kids, it isn't legally binding - she could change her mind, especially once she realises the financial benefit of you having less than 35% care when it comes to family tax benefit and child support...

Just outa interest... What is the house worth?

My advice - if you guys can be amicable... Write up consent orders relating to the kids... People on a site like this can help, there are also templates online. You can do that and submit it to the courts for approval, that will cost a few hundred $$$.

Now her name is on the title of the house? If so you're probably better off selling it... WHY? well I'm trying to keep you away from solicitors...

You could then offer her a small cash payment instead of some super... And it would be very small as it would seem that you guys don't have that much and you're gonna be left with the debts.. IF she doesn't like it she can get a solicitor to try and get some more from you.. BUT she will soon find, the solicitors fees will not make any of that worthwhile...

Plan B - go see a solicitor together. Explain that you just want to get divorced and get the necessary paperwork / legal crap done. One problem with this is that a solicitor isn't allowed to help both of you at the same time (conflict of interest) But solicitor could advise you of what is fair and possibly point you in the direction of two solicitors (one each) who could do the paperwork...Sadly, the system really does not do anything for punters, makes solicitors filthy rich though.

Plan C - see if you can find a community legal service that can help. Call Relationships Australia - They should be able to push you in the right direction. ACTUALLY this is the best bit of advice I've written

MaxT View Drop Down
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Newbie


Joined: 20/May/2017
Location: Australia
Posts: 3
  Quote MaxT Quote  Post ReplyReply Direct Link To This Post Posted: 21/May/2017 at 19:16
Thanks emca01. Lots of food for thought.
The house is worth roughly 470,000, and I would really like to avoid selling and ending up with nothing and mortgage.

aussiedad View Drop Down
Newbie
Newbie


Joined: 11/January/2018
Location: Australia
Posts: 1
  Quote aussiedad Quote  Post ReplyReply Direct Link To This Post Posted: 11/January/2018 at 16:48
Hi MaxT,

Read your post from earlier in the year and I'm in an very similar boat. Hoping you might be able to share if you found a resolution?

Cheers.

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