Quit Claim & Divorce
When filing for divorce, many couples find themselves in a precarious position when it comes to dividing up their property. One of the most common issues is figuring out how to separate the ownership of a piece of real estate. Using a quit claim deed is one way to separate the ownership rights of a piece of property.
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Function
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When someone signs a quit claim deed, he gives up ownership rights to a piece of property. When dealing with divorce, one person in the couple can sign the document and give up his ownership in the property. If one person is staying in the house and the other is moving out, this can be an easy way to separate ownership of the property.
Payment
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As part of signing a quit claim deed, a payment may be required. Since both members of the couple have equal rights to the equity in the house, the spouse who is staying in the house may need to pay a cash settlement to the partner who is moving out. This cash settlement can be decided by the court in the divorce case or it could be negotiated by the couple.
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Mortgage Responsibility
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Even though you can remove one party from the title to the property with a quit claim deed, that does not necessarily remove that person from the mortgage obligation. When both a husband and wife sign a mortgage, they are both required to repay the mortgage until it is retired. This means that if you sign a quit claim deed, you need to require the other spouse to refinance the mortgage. This can remove you from the mortgage and remove your obligation to pay. The refinance can also help the remaining spouse to come up with the cash necessary to make a cash payment to the other spouse.
Sale
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A quit claim deed can also help to speed up selling of the house. In some cases, one of the members of the couple will try to quickly sell the house. If a quit claim deed is not signed first, both members of the couple will have to sign off on the sale before it can go through. If both parties are still on the title to the property, both will have to consent to the sale.
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