Mortgage debt

North Carolina Divorce Law Divorce and Separation Answers
1


Generally you are entitled to keep any reduction in the principle on the mortgage, meaning the difference in the balance of the mortgage on the day you separated and the day you sell or otherwise divide the property. You will not receive credit for the interest you paid.

This was an answer one of the lawyers gave a few months ago in response to deciding how to divide debt if one party has been paying the house mortgage.

In my situation, my former husband was ordered by the court to continue to pay the mortgage of the marital home. He moved out, and bought his own home after separation. We still have not finalized ED and it will be 2 years soon. The court order refers to his payment of the mortgage as “additional child support” Does he still receive credit on the principle paid if it is referred to as “child support”?

Of note, the martial home is not being sold and I am living there with the minor children.

2

He will only get credit for paying down the principle balance under one of two scenarios:

  1. You and he come to an agreement that he gets this reduction credit;

  2. A court orders that he be given credit for this reduction. If the court ordered these payments as child support, I do not believe he will get credit for this reduction in principle. It may impact your Equitable Distribution, however, as the trial court may use a ‘date of trial’ value for the mortgage on the marital residence, which would increase the amount of equity you would ‘owe’ him if you are the one keeping the marital residence.