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  • Negative figure in FNP

    I have a simple question in Family Net Property Calculation: In FNP calculation when the result (Asset - debt&deduction) turns out to be negative figure, it is considered as "0" in total according to Family law as everyone knows. I can not understand why negetive number, which represents "loss/debt" incurred in marriage, is not be devided in FNP calculation. Shouldn't it be shared in the same way as the profit??
    For example, If one party happens to end up the bigger debt, let's say -$100K while the other party had $100K asset, FNP payment would be $50K, since negative number turns to "0". The party with debt at separation still has $50K debt while the other party keep the $50K profit after the division...is this fair?

  • #2
    Net family property is split evenly, debt is not. Your debt is yours. It is presumed that directly or indirectly the debt was assumed to gain the property. But if you incurred more debt than your spouse, the additional debt is simply your debt.

    If there was no family property, no investments or savings, a rental apartment, etc, then the debt is not divided in any way.

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    • #3
      OK, I find this very interesting. If a couple splits and has a house with mortgage, that gets divided via equalization, correct?

      If a couple has additional debts, say loans or lines of credit, the debt goes to the person whose name is on it? It gets split if they are both on it?

      Thanks to anyone who can offer clarification!

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      • #4
        We buy something for $100. We each put $50 on our credit cards. We have $100 worth of asset, split in half, and $50 debt each.

        We buy something for $100. You pay cash. I spend my cash on booze. I put the item on credit. I have $50 debt cancelling out my $50 asset, you have no debt and a $50 asset.

        We take out a joint line of credit. We pay for the item on the line of credit and we both spend our cash on booze. Then we lose the item while we are drunk. We have no asset, just the debt. The debt is joint. This is less to do with family law and more to do with the contract we signed with the bank for the joint debt, however family law acknowledges that decision to make the debt joint.

        The next night I go out on a real bender and max out the line of credit on booze, cigars and strippers. The line of credit is still joint. Too bad for you. Heh.

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        • #5
          OK so....a couple has a house with a mortgage. One person has several lines of credit/loans in their name only. The house gets equalized, the lines of credit that are in Person A's name only remain Person A's debt? Person A doesn't get more from the equalization of the house because they have the lines of credit/loans?

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          • #6
            This I'm not clear on. We didn't own a house to equalize so don't have experience there. My reading of the FLA says that the mat home is equalized separately, but that doesn't mean I'm right. I believe a few people have written here that the debt was factored into the mat home equalization.

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            • #7
              Originally posted by Mess View Post
              My reading of the FLA says that the mat home is equalized separately, but that doesn't mean I'm right.
              That negative NFP concept is a bit wierd. Mess' example is a good one supporting it especially when it's reckless. Blink gives a different perspective, which is valid in my view.

              This is something with which I went around the room with my $425/hr (at the time) lawyer.

              Unlike what I initially thought, the pot is melted. All other NFP is mixed in with the house when calculated. My NFP other than the house was around -$60K and I was concerned that my net debt would not be applied to my (much more) positive house equity. For a while I was concerned that my payout on the house was going to force it's sale. Nine months later I found out I was wrong, but that was a long time!

              Astute students of the spreadsheet here http://www.ottawadivorce.com/forum/f...-payment-3788/ will observe my concerns when studying it's methodology.

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              • #8
                Net family property is split evenly, debt is not. Your debt is yours>> I found it's not necessarily. You can actually deduct your personal debt only if you have properties bigger than debt, which make the share of the other party smaller.

                Calculation works like this.

                Total of FNP = Your FNP(= Your properties - your debt-your deduction) + the other's FNP(=her/his properties-her/his debt-her/his deduction)
                *debts, assets are valued at separation a, deduction is valued what you had at marriage/ personal gift

                So, if you happend to have more debt or deductin than your properties at the date of separation, you will be minus in your FNP which you can't claim for while your spouse might claim. I thought this would be unfair since many couple actually share debts and expenses of the other, such as paying spouse's medical or educational cost, supporting her/his parents or so on... Some might have more savings, proprties, debts, in his name only, but to be shared with the other.

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