Dividing a Home Underwater

Here in Las Vegas, the real estate crash hit everyone pretty hard. Specifically, couples found themselves with a lot of negative equity in their homes. In other words, their homes are upside down or underwater. There are a few options for dividing a home underwater, but it can get tricky.

When a couple goes to divorce, and their home is underwater, the first question we get as divorce lawyers is “what do I do with this house?” It’s a common question.

The first question we ask the couple is whose name is on the mortgage? Are both spouses names on the mortgage? If they are both on the mortgage, then we need the spouses to agree on what to do with the house.

One option is to do a short sale on the house. You could also let the bank foreclose on it. The courts allow both of these options.

If one of the spouses wants to keep the house, even though it’s upside down, and can afford to keep it post-divorce, that is also an option. A common reason to keep the house is if there are children. Keeping the house can mean a little extra stability in their lives while their parents go through the divorce process. We try to keep someone in the house if they can afford it. Again, both spouses have to agree on this if they are both on the mortgage.

There are options for dividing a home underwater in a divorce. They can be a little riskier than, but it’s been a reality here in Las Vegas for the last several years.


Home that are valued less than a mortgage are called “under water”. Couples filing for a divorce need to know how the courts will typically divorce an “under water” house.