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Can I reopen my divorce settlement for unpaid equity?

Can I reopen my divorce settlement for unpaid equity?

Full question:

I was divorced in late 2000. In our settlement for the home, I was to get 25% of the first $80,000 of equity and 50% for remainder. It was to be based on realtors appraisals. I lost my job and was behind on mortgage and we went into the buyout and the amount given to me was far below the amount as per the agreement. In fact, after deducting alimony I was paying before the divorce (which I was behind on), and taxes (which I was behind on), I was left with $0. I can prove that according to the agreement and appraisals I am still owed about $20,000. Is it too late to reopen this? I ask because now my ex is coming after me for more child support even though I overpaid it for four years based on what I was earning.

Category: Contracts
Subcategory: Breach of Contract
Date: 04/07/2025
State: National

Answer:

It may be too late to appeal the divorce order. However, you might have a claim for breach of contract if the property settlement agreement wasn't followed. In Connecticut, the statute of limitations for a contract claim is six years from the date of the breach. If you experienced a significant change in circumstances, like losing your job, you might be able to modify the divorce order to lower support payments.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How do you determine the cost basis of a house?

The cost basis of a house is generally determined by the purchase price plus any additional costs incurred during the purchase, such as closing costs, legal fees, and improvements made to the property. For tax purposes, it can also include certain expenses related to selling the house. In divorce situations, the cost basis may be adjusted based on the division of assets outlined in the settlement agreement.

How does an equity buyout work in a divorce?

An equity buyout in a divorce occurs when one spouse buys out the other's share of the marital home. This typically involves determining the home's current market value, calculating the equity, and then compensating the other spouse accordingly. The buyout amount is often based on the terms set in the divorce settlement, which may include appraisals and agreed percentages of equity.

What is the 2 out of 5 year rule?

The 2 out of 5 year rule refers to a tax exemption for capital gains on the sale of a primary residence. To qualify, a homeowner must have lived in the home for at least two of the last five years before the sale. This rule allows individuals to exclude up to $250,000 in gains ($500,000 for married couples) from taxable income, which can be relevant in divorce settlements when dividing property.

How does divorce affect the cost basis of a home?

Divorce can affect the cost basis of a home if the property is sold or transferred as part of the settlement. The cost basis may be adjusted based on the division of equity outlined in the divorce agreement. If one spouse buys out the other, the cost basis for tax purposes may also be influenced by the buyout amount and any improvements made during the marriage.

How is equity divided in a home when divorcing?

Equity in a home is typically divided based on the terms of the divorce settlement. This often involves calculating the current market value of the home, subtracting any outstanding mortgage balance, and then determining each spouse's share according to the agreement. Factors like contributions to the home and financial circumstances may also influence the division of equity.

What is the cost basis of a house after divorce?

After a divorce, the cost basis of a house can change based on how the property is divided. If one spouse retains the home, the cost basis may be adjusted to reflect the buyout amount or the value at the time of transfer. It's important to document any changes, as these will impact tax implications if the property is sold in the future.