VIC When are Debts Taken into Account in Property Settlement?

[Dermie23]

Hopefully this is a very simple property settlement question to answer, but I can't find the info I am looking for.

I'm curious as to how and when debts are taken into account when an asset split % is agreed upon. eg: Say we have a house that sells for $1 million, and have debts of $300k

The agreement is a 70% / 30% split.

Does the debt get paid off, and then the remaining $300k get split 70% / 30%? ie: $210k to person A, $90k to person B.

Or does the funds get dispersed prior to the debt being paid off, and then the same % in reverse get applied to paying off the debt? ie: From the house sale Person A receives $700k, Person B receives $300k. Debt of $300k - Person A pays $90k (30%), Person B pays $210k (70%)

Leaving Person A with $610k, Person B with $90k. This doesn't seem right, but to be honest not much of this whole process does!

I hope I've worded this correclty, thanks in advance.

 

[sammy01]

Pay the bank
Pay any outstanding rates, electricity, gas, etc etc.
Pay the the solicitors.
Then what ever is left gets split between you and the ex as per what ever agreement you've come up with or the courts order.

 

[Dermie23]

Thanks very much for that, I assumed that was the answer but was starting to question it.

 

[Rod]

Pay the bank
Pay any outstanding rates, electricity, gas, etc etc.
What ever is left gets split between you and the ex as per what ever agreement you've come up with or the courts order.
Then pay your solicitor.

What often happens in practice is the solicitors have a lien/create a caveat over property (with your agreement) and get their money as part of the distribution.