My fiance’s separation agreement from his ex-wife states that the net proceeds from the house they bought together will be divided equally between the parties. Since he took a giant loss during the short sale process, can he hold her accountable for half of the debt?
If the agreement states that a deficiency will be equally divided, yes.
The agreement only states that the proceeds will be divided equally–it says nothing about the event of a deficiency. Wouldn’t the same logic apply though?
Since the agreement does not speak to the issue of a deficiency the loss would go by title, for instance, if the mortgage was only in his name, the loss owing to the lienholder would fall to him.
The title of the house was in both of their names. Somewhere in the short sale process though, my fiance’s lawyer had his ex sign a Quit Claim Deed. So upon the sale of the house, the title was technically only in my fiancé’s name. I believe the mortgage was still in both of their names up until the sale of the house. Does that mean she’s off the hook, or can she still be held liable for half the debt?
The title to the home is not the relevant piece here. If she is on the loan, she is jointly liable for the shortfall.