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Patrick L. Looper Patrick L. Looper
  • Serving All of Tennessee

What Happens to the Marital Home If You Divorce While You Still Owe Money on the Mortgage?


For many couples, buying a house is a powerful sign of commitment to each other.  When you are happily married, making mortgage payments on your forever home feels like a gesture of love, something you do together, rather than a source of financial stress.  Paying off the mortgage on your family home is truly a cause for celebration; you dream about leaving it to your children as your inheritance, as generational wealth.  Of course, if you get divorced, the marital home can be a major source of conflict.  Every couple has a different set of circumstances and preferences, so there are several possible outcomes when spouses in the process of a divorce disagree about what should happen to their marital home.  If you and your spouse are at odds over which one should keep the marital home after your divorce, contact a Tennessee divorce lawyer.

How Tennessee Courts Decide Who Keeps the Marital Home

Tennessee law considers most assets acquired during the marriage as marital property, with the exception of inherited assets and money awarded to one spouse in a court judgment.  For many couples, the marital home is by far their most valuable asset.  Unless the parties can agree on which of them, if any, should keep it, the court can order any of the following outcomes in the divorce judgment:

  • One spouse keeps the marital home, while the other one keeps other valuable assets.
  • One spouse keeps the marital home but must pay a lump sum to the other one in exchange for this privilege. Think of it as buying out your ex-spouse’s share of the house.
  • The couple must sell the house and divide the proceeds equally or unequally.

Whatever the court decides, it makes the decision on the basis of equitable distribution.  Therefore, it considers factors such as each party’s need for the house for financial and non-financial reasons, each party’s future earning potential, and the value of each party’s non-marital property.

The Ex-Husband Whose Failure to Pay Alimony Caused the House to Go into Foreclosure

When Deidra and Melvin divorced in 2009, their marital home was valued at about $111,000, and they owed $49,000 on the mortgage; therefore, they had about $62,000 of equity in the house.  Melvin was retired, and his income came from retirement earnings.  Deidra also had a modest income, although the court decision did not specify whether she was retired or still working.  The court awarded Deidra the house and ordered Melvin to pay Deidra $314 per month, equivalent to half of the monthly mortgage payment.  The alimony was to continue for 15 years, until the anticipated maturity date of the mortgage loan.

Melvin stopped making alimony payments shortly after the divorce, and the house went into foreclosure; Deidra was forced to vacate the house when it was sold in foreclosure in January 2012.  The trial court ruled that, because the couple’s marital dissolution agreement stated that Melvin’s alimony obligations ended when Deidra’s mortgage obligations did, that the alimony should end at the time of the foreclosure sale.  The trial court overturned the decision.

Contact Patrick Looper About Divorce Cases

If you and your spouse disagree about what to do about your home mortgage after divorce, a Knoxville divorce lawyer can help.  Contact Patrick L. Looper for a consultation.


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