When home owning couples divorce, they might agree that the spouse who wishes to keep the home will be given a certain amount of time to refinance the home in their own name, perhaps taking a cash-out option to give the vacating spouse their half of the equity if there is no property to trade or cash on hand to buy out the ex-spouse. When entering into this type of arrangement, there is typically a provision in the divorce agreement that if the remaining spouse is not able to refinance within a defined period of time – often three months to a year – the spouse must sell the home and split the proceeds.
If a spouse does not refinance the home in their own name, paying any balance owed to their ex-spouse, AND, is not making any moves to sell the home, the ex-spouse who has vacated can file a motion with the court to force their ex-spouse to abide by the divorce decree. There is no expiration on the agreement, so even if two years has gone by and an ex-spouse is still hunkered down in the family home, the vacating spouse is entitled to their half of the equity and may ask the court to force the spouse to put the home on the market per the divorce decree.
Alternatives to Selling the Home
Depending on the equity in a home, some homeowners will exchange other marital property to make up for the equity the other spouse is owed. For example, one spouse might decide to keep a retirement account that is in their name – no dividing – in exchange for their share of equity in the home. Another option is for the spouse remaining in the home to take out a personal loan, find other funding, or take a cash out refinance. Regardless of which option they choose, refinancing the home in their name alone is a must to release the vacating spouse’s obligation to the original home loan. It is always important to consider the tax consequences of the various options.
Contact an Experienced Illinois Property Division Lawyer for Help
When you have questions regarding your ex-spouse not selling or refinancing the family home and the division of marital assets in Illinois, call the LIbertyville Illinois law offices of Ronald L. Bell & Associates PC for help today at 847-495-6000.