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Getting Divorced with No Equity in Your Home

Ideally, if you are getting divorced, you will have money in your bank accounts, reliable retirement savings, and some equity in your home. While you can’t keep everything under Colorado property division laws, the more you start with, the more you should end up with. Unfortunately, divorce isn’t usually an ideal situation, and many factors in divorce aren’t perfect either. One of these sometimes inopportune factors is negative home equity.

READ — Should I Keep the House in the Divorce? 

Home values decline for many reasons. Most are out of your control, including recession, the economy, foreclosures in your area, or a rise in neighborhood crime. Real estate market fluctuations often result in negative financial consequences for homeowners, especially if a couple wants to sell their home in a divorce but their mortgage is upside down.

If you don’t have equity in your home, do you wait until the housing market picks back up to divorce? Doing so isn’t ideal either, as you never know how long that might take. Being stuck in a marriage to grow your home equity isn’t a comfortable or wise position to be in. So, how can you handle a divorce with no equity in your home?

Options for Couples with No Home Equity

Thankfully, you have options, even in this less-than-ideal situation. Whatever is best for you and your spouse will depend on your goals and future plans. No matter which option you choose, it’s crucial to carefully weigh the pros and cons of each before making a decision. Such a decision can impact you and your family far into the future.

Foreclosure or Short Sale

This is often the least desirable option, but you can let the lender foreclose on your home or ask the bank if a short sale is an option. Unless you plan on filing for bankruptcy, either of these options can have severe repercussions on your credit for years to come. Considering this, it’s usually best to avoid these options if possible.

Rent the House

If neither of you wants to stay in the house or you can’t agree on who should remain, you both have the option of moving out but renting your home. You can continue to rent the house until its value appreciates enough that it can be sold for more than the total owed on the mortgage. Renting can be beneficial as you may earn some income on top of paying for the mortgage, and it buys you time to let your house appreciate. However, renting has cons, such as sharing the profit with your soon-to-be ex-spouse and managing a rental property or paying someone else to do it for you.

READ — Understanding Divorce Impacts on a Family Business 

One Spouse Lives in the Home

One spouse can remain in the home post-divorce. This is a personal decision between couples that sometimes involves a family court judge. The couple may decide that one spouse should live in the home, as opposed to renting it out, until the home value appreciates enough to make it worthwhile to sell. This situation might make the most financial sense for some couples. However, one drawback to this arrangement is that the spouse who moves out may not be able to purchase another property with the family home still on their credit report.

Divorce requires many difficult decisions, especially if you don’t have any equity in your home or have negative equity. You may feel uneasy making these decisions on your own or even wonder if you are being taken advantage of by your spouse. Therefore, hiring an experienced divorce attorney is essential to help you navigate this difficult path.


April Jones 2 1Jones leads the Sam Cary Bar Association in a second term as President (2005 and 2021). She obtained her Bachelor of Arts degree from the University of California at Berkeley, and earned a Juris Doctorate from the University of California, Hastings College of Law. Jones is a member of the California State and Colorado State Bars and is a 2021 recipient of the Denver Business Journal “Outstanding Women in Business Award.”

Financial Impacts of Divorce Property Division: The Family Home 

In every divorce, there are many aspects, financial and otherwise, that spouses must consider as they reach a divorce settlement. The family home is one of them. While some divorcing couples may have an easier time deciding who should keep the house, it’s not always as cut and dry as it may seem on the surface. Many spouses are interested in keeping the family home; however, it’s a significant asset that comes with financial impacts that they each need to consider. Here are the financial factors that every divorcing couple should consider when determining the fate of their family home. 

READ — Understanding Divorce Impacts on a Family Business

Selling the Home 

If neither spouse wants to keep the home, selling it might seem like the best option. Often, if the couple can’t agree on who should get the house, the family court judge will order that it is sold and that the net proceeds are divided equitably. However, selling the home can be problematic for two primary reasons: 

  • Couples who can’t agree on what to do with their home will likely have difficulty determining which realtor to hire, how to price the house, what to fix or replace, negotiating the price, and many other essential details. 
  • Most couples want their divorce finalized as soon as possible, and selling the home can be counterproductive to this goal. The home is not a liquid asset as it can take some time to sell. Selling may be ideal for some couples, but they need to realize that doing so could delay their divorce. A divorce is difficult to finalize when a liquid asset hangs in the balance.  

Capital Gains Taxes 

Capital gains tax liability must always be considered with the financial picture of selling the home. Depending on how recently the couple purchased the house and how long they have lived there, they could face capital gains tax liability as well as a financial loss from the home’s sale. The law allows them to exclude up to $500,000 of gain from tax if you lived in the home for two of the five years before the sale. In some situations, if either spouse serves in the military, it could be extended for as many as ten years. However, if the couple bought the house less than two years ago, the exclusion could be reduced.

The Costs of Maintaining the Home 

One aspect that many couples frequently overlook is the cost of maintaining the family home. Don’t forget that even if a home is brand new, it will eventually need maintenance and repairs. Whoever keeps the home will need to continue with maintenance, which could be quite costly depending on the current state of the house. Getting the family home in a divorce can place an undue and sometimes unexpected financial burden on one spouse. The spouse who wants or agrees to keep the family home will want to seriously consider this financial factor. 

Seek the Advice of a Well-Versed Divorce Attorney 

There are pros and cons to keeping and selling the home. Each spouse should consider them and seek the advice of an experienced divorce attorney and possibly a financial advisor as well. A complete understanding of options will help a divorcing couple make the best decisions for their family moving forward. 


April Jones 2 1In practice for 30 years, April D. Jones is the founder and CEO of the Jones Law Firm, PC. Leading a powerhouse team of practitioners that have helped thousands of families and individuals through high-level family law legal services, Jones was recently awarded the Individual Inclusiveness@Work award by The Center for Legal Inclusiveness (CLI).

Jones leads the Sam Cary Bar Association in a second term as President (2005 and 2021). She obtained her Bachelor of Arts degree from the University of California at Berkeley, and earned a Juris Doctorate from the University of California, Hastings College of Law. Jones is a member of the California State and Colorado State Bars and is a 2021 recipient of the Denver Business Journal “Outstanding Women in Business Award.”

Understanding Divorce Impacts on a Family Business 

Divorce is often complicated, with many layers of emotions, concerns, and even relief. At its core, divorce deals with the legal and financial split of two individuals. As such, their assets, including any family businesses, must be dealt with before the divorce can be finalized. Unfortunately, having a family business can make a divorce even more complex. Therefore, each spouse should have an understanding of their options when it comes to dealing with the business side of their divorce.  

Is Your Business Marital Property? 

Before deciding what should be done with your business in your divorce, you need to know how the court views your business. In other words, is it marital property? Courts consider a wide range of factors when making such a determination, including: 

  • If the company was started before or after the marriage occurred. 
  • The source of funds used to acquire a business if it was acquired after the marriage. 
  • If the business’s value increased during the marriage – companies that increase in value over the course of the marriage might have marital equity.  
  • The monetary contributions and personal efforts provided to the business by either spouse during the marriage. 
  • The current value of the business and any assets it holds. 

Business Valuation 

The next step is to obtain a business valuation. You need to know what your business is worth before you make an informed decision about what should happen to it in your divorce. Sometimes divorcing couples can agree on the value of their business, but many others won’t. Disagreements over the value of a company are common. Since private firms aren’t publicly traded, assessing their value isn’t easy. You will likely need not only the expertise of an experienced divorce lawyer but also an independent qualified valuation professional, such as a: 

  • Accredited Senior Appraiser (ASA) 
  • Certified Business Appraiser (CBA) 
  • Certified Public Accountant (CPA) with an Accredited in Business Valuation (ABV) designation 

Options for a Business in a Divorce 

The good news for a divorcing couple who own a business is that there are a few options. Each spouse should carefully consider these options and how they will impact them moving forward: 

  • Offsetting the value of the company by other marital property — for instance, one spouse gets the family home, and the other spouse receives the business. 
  • Selling the business entirely so that neither spouse remains an owner. 
  • One spouse buys out the other. This is the most common option. For example, suppose the business was valued at $1 million. In that case, one spouse would pay the other $500,000 and then own the business in its entirety.  
  • Remaining co-owners of the business. While this is the least common option, some amicable couples can successfully still own a business together after dissolving their marriage. 
  • You or your soon-to-be ex-spouse sell your share to an investor. The remaining spouse and investor would then own the business together. 

Why It’s Important to Work with an Experienced Divorce Attorney 

Some divorces are more complex than others and therefore demand the expertise of legal counsel. If you and your spouse own a business and are going through a divorce or are considering one, it’s essential that you work with an experienced divorce attorney. More specifically, you want an attorney with knowledge and personal experience helping spouses navigate the outcome of their business during a divorce. It’s imperative to ensure that your business is correctly valued and appropriately categorized.  With a seasoned attorney on your side, you can make the best decisions knowing you are aware of all potential options. 


In practice for 30 years, April D. Jones is the founder and CEO of the Jones Law Firm, PC. Leading a powerhouse team of practitioners that have helped thousands of families and individuals through high-level family law legal services, Jones was recently awarded the Individual Inclusiveness@Work award by The Center for Legal Inclusiveness (CLI).

April Jones 2 1Jones leads the Sam Cary Bar Association in a second term as President (2005 and 2021). She obtained her Bachelor of Arts degree from the University of California at Berkeley, and earned a Juris Doctorate from the University of California, Hastings College of Law. Jones is a member of the California State and Colorado State Bars and is a 2021 recipient of the Denver Business Journal “Outstanding Women in Business Award.”


Back to school: tips for divorced parents

The beginning of every school year brings certain challenges for parents. This year, parents are facing new challenges as a result of COVID-19, particularly parents living in separate households with shared physical custody of their children.

The added stress and anxiety associated with these circumstances can give rise to added conflict with an ex-spouse, particularly if there is already a history of conflict. It is important, now more than ever, for parents to remember to focus on the best interests of their children.

Because many courts across the country are still operating on a limited or emergency basis, it may be more difficult to access the Courts. As a result, parents will have to rely more heavily on their own ability to resolve issues concerning their children’s education during this time, whether that is through counsel or alternative dispute resolution.

The new challenge parents are facing this school year is the decision between in-person learning, remote learning or hybrid options. The uncertainty concerning future virus outbreaks, the impending flu season, and the possibility of future governmental shut downs may make this a difficult decision for many parents. Parents’ work schedules may also impact their ability to facilitate remote learning.

If parent’s have joint decision-making authority for educational decisions, it may be unclear as to whether participation in remote learning opportunities offered by the child’s school is considered a major decision (requiring a joint decision) or a day-to-day decision (which can generally made without the other party’s consent). In either case, the best approach is to focus on the children and for the parents to get on the same page as much as possible as to approaching remote learning. Parents who already utilize communication tools such as Talking Parents or Our Family Wizard, can use those tools to not only communicate about learning schedules, but can also coordinate through shared calendars. Use of a shared calendar can help the parents know which parent will be ensuring that certain subject work is completed, but will also help mitigate the child’s ability to play the parents off of each other (such as telling both parents that work will be completed while at the other parent’s home).

Parents should discuss their expectations as to enforcing remote learning under these circumstances.  It would not be surprising if one parent has a different perspective or expectation than the other. One parent may feel is important to keep a strict schedule and insist that all course work is completed, while the other may feel a more relaxed approach is appropriate. Neither approach is inherently right or wrong. However, conflict between parents regarding these issues can lead to increased stress and anxiety in children, which may ultimately detract from their ability to succeed in school no matter the format. Given the lack of access to the courts and the generalized increase in anxiety, parents should be aware of these differences, and may have to be more willing to accept these differences, for the benefit of their children during these uncertain times.

While it will almost always be better for children if parents can agree as to how children will participate in school, one parent may find themselves diametrically opposed with the other. In that situation, parents will have to find a way to break the impasse. The use of a decision-maker or arbitrator may provide the means to resolve the dispute. A decision-maker/arbitrator is an individual appointed to step-in and the make the decision. This person will receive information from both sides as to their points of view and then enter a decision. The process for providing each side’s perspective can range from informal discussion to the formal presentation of testimony and evidence like a trial.

One major benefit of using a decision-maker/arbitrator is that the process is generally must faster than going through the court. While there are additional costs, those costs are usually shared in some way between the parties and can often end up being less overall than litigation through the Court (particularly if both parties are represented by counsel). Depending on the relevant laws, appealing or challenging a decision-maker/arbitrator’s verdict may be limited. As both sides must generally agree to use such an individual, a decision-maker/arbitrator cannot be ordered by the Court over one party’s objection.

In the alternative, parties can try resolve the issue through the Court by filing a motion. When addressing these issues Court’s will often consider things such as the safety precautions articulated by the school, the different remote or in-person options available, and any health concerns related to the children or parents. In addition to these factual considerations, there are legal considerations as well. There may be a legal question as to whether the Court has the authority to step in and make a decision as between parents with joint decision-making authority. Although this would seem to be directly in line as to the purpose of the Court, in some states it may not be a clearly decided legal issue.

As mentioned above, there may also be a question as to whether the issue of remote or in-person learning qualifies as a major or day-to-day decision. If the latter, the Court may determine that a joint decision is not required an each parent can decide whether the child will participate in remote or in-person learning during their respective parenting time. Such a result could create chaos for the parents, the school, and most importantly for the child.

Whether or not participation in remote versus in-person learning is considered a joint or day-to-day decision is perhaps more relevant if one parent has sole educational decision-making authority.

On the one hand, participation in remote learning is akin to ensuring attendance at a particular school. Arguably, and depending on the specific laws of each state, a parent with sole educational making authority has the ability to enforce the child’s attendance at a specific school of their choice.

On the other hand, decisions regarding attendance or absences based on illness, doctor’s appointments, etc. are more likely to be considered day-to-day decisions which do not require the consent of the other party, regardless of how major decision-making authority has been allocated.

However, as noted above, if the parents are not on the same page, trying to follow different school schedules during each parent’s parenting time could lead to chaos and cause anxiety for the child.

Regardless of whether there is an allocation of joint or sole decision-making, the best approach is for parents to try to get on the same page. If that is not possible, this is a time to pick and choose battles. Since many courts are operating on a limited or emergency basis, parents should not expect to get immediate relief from the court regarding a dispute over a child’s education at this time. If disputes during this time are part of a longer pattern of issues, a parent should keep a record or journal of these issues with dates and a short explanation of the issues. This record can then be used later if the need arises.

Overall, parents should try to be aware and understand that these are uncertain times for everyone. Uncertainty is often accompanied by anxiety and fear. Anxiety and fear can often lead to emotional responses that might not otherwise be expressed. While these circumstances may present opportunities for increased conflict, some families are finding that their shared goal of keeping their children safe against an unknown but powerful threat is creating collaboration and communication. Compromise is almost always the best option to resolve disputes in family. This is even more true now.

Jon Eric Stuebner is an attorney at Griffiths Law PC in Lone Tree, CO. His law practice is comprised of all areas of family law, including high conflict and complex asset dissolution cases, allocation of parental rights, and post-decree disputes. Jon Eric is also a former educator with a Master’s Degree in education.