house settlement--realistic or stupid?

[startingfromscratch]

My husband and I are divorcing, and we have a young son. We owe $125,000 on a house that we bought with a $15,000 downpayment he got from an inheritance. The tax value on the house is $176,000 and when I do online appraisals, the figure goes much higher. However, I think that is unrealistic. None of the houses in our neighbor have sold for that, and with today's market, it would be impossible (I think) to get that much for it. Anyway, he is offering to walk away with all the credit card debt (about $25,000) if I walk away from the house.

I do not want the house for myself, and it would take me years to pay off my part of the credit card debt. Also, Even though I know that by law I am entitled to it, I cannot in good conscience take 1/2 of any equity in the home until the inheritance was reimbursed (it was given while the relative was still alive, just so my husband could buy the house). So by the time you deduct the inheritance, I don't believe there would be enough equity to cover my half of the credit card debt. So I am willing to go with his plan. Am I being realistic about this, or stupid for walking away?

[TC]

No idea on what is best here, but I think I would reconsider on the Inheritance if it was given while you were married and I believe the courts will see it that way also.  If he recieved it while you were married, you are now entitled to half. 

TC

[Wolfy]

Especially when he uses it on the purchase of joint property.

[livealittle]

nearly all courts consider inheritances of money that are used to purchase items used for the marriage - and a marital home certainly qualifies - as joint property and each party is entitled to 1/2. 

your situation sounds like it might actually be in your best interest to walk away from the house.  You should get an appraisal and check to see what houses in the area are selling for and look realistically at what it may bring.  Then, once you have real information, make your decision.  Your consious is something only you have to live with and if you don't feel right about taking more than 1/2 the equity less the $15,000, then don't. 

divorce is something that you only get one chance to do and it really can affect your life for years.  It's business and you should treat it as you would any large purchase or business decision involving large sums of money - meaning tens of thousands of dollars, not a couple hundred.

good luck

[startingfromscratch]

Thank you all.  I believe that I would easily get 1/2 if I insisted on it.  My biggest concern if I insist on 1/2 of equity or inheritance, is that he will of course in turn insist I take 1/2 the marital debt (he is right now offering to assume it all) .  I may come out behind if that happens.  I have checked the house sales for all the houses around us, and the actual sales numbers are far lower than than what their values are stated.   I will have to think about this one some more.

[m_t]

And in all honesty, if you expect to assume half of the assets, you should be prepared to assume half the debt. That's only right.

[Wolfy]

Divorce should be about getting your fair share. Unfortunately, many times it turns into a game of "how much can I get." I'm not saying your doing this, just sayin'.

[startingfromscratch]

I know that if I take 1/2 the house I would take half the debt also.  That is only fair and I wouldn't question it.  This was his proposal and I am just trying to make sure that I don't put myself at a disadvantage here.  The only reason I keep coming back to the question is that I was one of those foolish wives who let her husband have everything in his name, so I have no credit built up, while he has all kinds of credit, plus a house that he can use as collateral if he needs to get a loan for something.  And when the market comes back, he can sell that house for considerably more that he can right now. 

While walking away without the marital debt may seem like me trying to see "how much I can get", that fact is that while I have paid my share on everything we own all these years, he will get the credit for it and I will get none.  That's my fault, I know.  So I can walk away without the marital debt, but with no established credit, no ready cash, and yet still have to get approved for and put deposits on rental property for me and my son.  There will be child support, I have a great job with good insurance and retirement, and I am the one who managed all our money for the last 20 years, so I know once established, my household will run well.  But walking away empty-handed with no credit or assets of any kind makes that hard to get one up and running. And should any emergencies happen, I have no financial resources to draw from.

If this were happening two years from now, I would take my 1/2 of assets and debt too, as the house value would offset the debt with money left to start over.  But it is happening now, so his proposal probably puts me at the least disadvantage.

[InDenial]

The tax value on the house is $176,000 and when I do online appraisals, the figure goes much higher. However, I think that is unrealistic. None of the houses in our neighbor have sold for that, and with today's market, it would be impossible (I think) to get that much for it.

PLEASE get an appraisal!  My house appraised about $100,000 lower than an online site predicted!!

(Since I'm keeping the house I was delighted. I'm probably one of the few people happy about the bad real estate market!)