FinancialAdvisors #DivorceSupport #HomeOwnership
Understanding Your Financial Situation
Going through a divorce can be a challenging and emotional time, especially when it comes to financial matters. It’s important to assess your current financial situation before making any decisions. Here are some key factors to consider:
- Living in the family home with children
- Paying the mortgage on your own
- Equity in the home
- Low credit score due to debt consolidation
- Limited savings and high debt
Exploring Your Options
When facing a situation where you need to come up with a significant amount of money, it’s essential to explore all your options. Here are some ideas to consider:
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Using Retirement Funds: While it’s not ideal to dip into your retirement savings, using a portion of your IRA could help cover some of the $40k you need.
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Negotiating with Your Ex-Spouse: Consider discussing alternative payment options with your ex-spouse, such as a payment plan or deferred payment schedule.
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Seeking Financial Assistance: Look into programs or organizations that offer financial assistance to individuals going through a divorce. They may be able to provide guidance or support.
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Crowdfunding or Fundraising: Utilize online platforms to share your story and raise funds from friends, family, or even strangers who may be willing to help.
- Part-Time Work or Side Hustles: Explore opportunities to increase your income through part-time work or side gigs to supplement your savings.
Seeking Professional Help
Navigating the financial aspects of divorce can be overwhelming, especially when trying to save your home. Consider reaching out to a financial advisor who specializes in divorce planning. They can provide personalized advice and guidance to help you make informed decisions.
Remember, it’s crucial to prioritize your financial stability and the well-being of your children during this challenging time. Stay proactive, explore all options, and seek support when needed. You can overcome this hurdle and secure your home for the future.
1. What did your lawyer say about this housing deal?
2. What about child support?
3. What’s your income?
4. At the end of the day, you may need to come to terms that you cannot afford to stay.
Paying the mortgage on your own while supporting your children and “you can stay if you pay me $40K”?
What’s the court think of this arrangement? It sounds like you can’t even afford to do what you’re currently doing, never mind give him $40K.
Is this the outcome of your divorce settlement? If not, make sure it isn’t.
There are no creative ways to invent $40k. And you’ve said yourself….your budget cannot absorb any additional costs as it is. You cannot afford the payments on any sort of loan that you could possibly get. And with your DTI, there are no loans that you could possibly qualify for, in the amount that you need. Not unless you have wealthy family members who are willing to loan/gift you the money. And while I guarantee that you have things in the budget you could cut back on, nothing that’s going to instantly free up $40k.
Unless you have other assets that you’re able to sell, you probably have to consider selling the home and moving to another area. I know it’s the last thing you want to do, but I don’t see any decent ways you can come up with $40k to pay your ex. And that’s ignoring the other $55k in credit card debt you have sitting there. Not unless you can suddenly get a much higher paying job, or you find the available hours to work a 2nd job, or you take in a roommate.
With how much debt you have and how little savings you have, it doesn’t sound like you can afford to keep this house. You are one major repair away from catastrophe.
If you are considering bankruptcy, consult with a lawyer about the process before selling your house.
What does your lawyer say?
With the numbers you provided keeping the house is not tenable long term even if you find a way to scratch together the 40k now. Being out of debt will get you much better footing to recover your financial health and credit score.
What’s your monthly income and expenses? If you list it, it’s easier to see where you can cut back.
– always starts with having a good lawyer
Coming up with $40k when you have $55k in credit card debt alone is most likely impossible. You frankly cannot afford to own a house right now. The very first thing you need to do is contact a lawyer. Do not make any financial arrangements with your soon-to-be-ex-husband without a lawyer approving it. An attorney will spot tricks that will screw you out of income, or places where you can gain advantages. Get a lawyer right now.
I don’t think you can afford the house. You probably need to sell it, split the proceeds, clean up your credit and rent for a while. I know three people who spent over $7000 getting new AC units.
What about your other assets & debts? Retirement accounts? If the $55k in credit card debt was accumulated during the marriage, half of that is his. You can’t just look at the house in a vacuum, it all goes into the calculations. You really need a lawyer to provide sound advice and protect your interests.
How much equity do you have in the home? I didn’t see anywhere that you gave an number for that. If it’s enough to clear all your CC debit you need to consider selling this house. Getting rid of that would free up $1334 a month based on the numbers you provided. You need breathing room. I always think peace of mind over a piece of property. Having been through this emotions are high and as hard as it is you have to be more business minded right now. Also, you really need a lawyer if your stbxh is as big of a piece of shit as you say he his, you need to protect yourself. He isn’t looking out for your best interest here.
It seems to me you need a lawyer – otherwise nothing is set in stone and your husband could change his terms. Looking at your budget, I know this is probably small potatoes, but I think you should cut the cancer insurance, pet insurance, and either Netflix or Hulu (not continue with both). Also, how old are your children? You say you’ve been married at least 19 years, so I’m assuming they are at least in their teens. If there are not too many years before they come of age, maybe you and your ex could hang in there and just remain separated until they are of age, then proceed with divorce and selling the house. There is no easy way that you could raise $40,000 and I think you need a different plan.
You should really have consultations with a few additional attorneys. I think you will be making a big mistake not having one. My friend recently divorced and her ex-husband wanted to just handle it all themselves and told her what he was willing to give her and suggested it was above and beyond what any court would award her. I harassed her into getting an attorney. She got so much more than what her ex was telling her she was entitled to.
I don’t think you have a financial answer here, outside of rapidly and significantly increasing your income
Why not talk to the ex? Would he accept monthly payments towards that $40k, or something similar? Does he not value having his kids go to the best schools?
You are likely not refinancing in two years with your credit score and spending habits. You will either be selling now or selling in two years. The difference will be whether you have an additional $40K loan on top of everything else. You’ve made it clear you cannot really afford things as is, you have no extra money to put into savings, so you do not have wiggle room to pay a $40K loan even if you could get one. I think you need to come to terms with your new reality to be frank. I understand not wanting to upend the kids, but do you really have a choice?
How much does her ex husband have in his retirement plan? She is entitled to 50% of that. If his 401k balance is $80k, 50% would offset what she owes him for the house.
How do you know $40k is fair without having some expert advice? Also you don’t mention child support. Assuming $40k is fair, let him fund that in exchange for less child support or if he wants stability for HIS kids, can he wait the two years for the their sake? Or can a wealthy friend or relative give you $40k in exchange for a lien or some kind of legal interest in the house? Maybe you should carefully evaluate abandonning the cc debt. Your credit will obviously take a hit, but if it is in connection with a divorce, and it helps keep the house then maybe it would be worthwhile. But whatever else happens, seek some kind of advice, is there legal aid in your area? Best wishes for a wonderful future, stay strong!
If coming up with 30-40k on the spot were easy we’d all do it all the time. There is equity in the house, though you don’t say how much (sounds like it’s more than 80k from the way you wrote, but either way…) Sell it, use your half of the equity to supplement what you need to make up the difference between the current mortgage payment and rent in that area for 1-2 years, and then clear out as possible to get out of the paycheck cycle. Ultimately.you may still have to move, but this gives you more time. It sounds like you don’t have the income to pay for home expenses (repair and maintenance) anyway, so renting is ultimately a better option – rent is the most you’ll pay to live somewhere, mortgage is the least you’ll pay to live somewhere.
I would cut costs and go to the food bank, so if you qualify for food stamps etc. I’m so sorry how hurt this is.
So you have 55k in credit card debt and he has 20k. Was the 55k accrued for the benefit of the marriage? Based on your prior response, the 20k he accrued was after you separated and likely not for the benefit of the marriage. You need to consult a new attorney and heavily consider retaining an attorney. You can also see if there are court mediation programs or free or low cost services. You likely make too much to qualify for legal aid, but explore your options by reaching out to the court and trying to identify appropriate programs and avenues. The divorce court can assign debts to one or both of you if the court deems it to be equitable. A good attorney can make nuanced arguments for you. What if husband is assigned half of your credit card debt and you are assigned none of his? That 40k he may or may not be owed from the home’s equity could be reduced to 12.5k if he agrees to an offset for debt he is assigned. Equity is also a whole other conversation, based on valuation of the home. What are you basing the equity analysis on? As well, the fact that you have been making payments for the last year would likely be taken into account, though it may or may not make a difference since you asked him to move out and he is paying rent elsewhere. Bottom line: you need an attorney if you don’t want to get screwed. That’s your only hope for possibly keeping the home. Keeping it may not ultimately be a good idea, but that’s your avenue: a good divorce attorney.
Buddy of mine got an empty lot in his kids district. Threw down a boxabl house and called it good.
Hi, first, I’m sorry you are going through a challenging time. Just know that even with the circumstances you’ve got this.
Ok, so I’m a money coach and there are a few things that come to me when I read this. 1) I don’t understand how you can be paying the mortgage on your own, yet your husband is saying you can stay there. If you are paying the mortgage, why do you have to leave? 2) How can you make extra income so you can start building up money for your own security and safety? 3) Why are you saying there are terrible schools if you move? 4) Do you have any family that can help in any way (stay with them or loan you money)?
It sounds like you are focused on buying out the equity but I’m wondering what other options can there be outside of something that expensive right now?
Hopefully some of these got you thinking about other solutions, even if short term. Also, I wonder if you do get the 40k is buying out the equity right now the best thing? Just throwing that out there. That’s a significant amount to help you re-start somewhere else. Good luck! And I hope this helps.
I wouldn’t give him the lump sum anyway. He would still be listed as a homeowner and could benefit from equity yet again when you sell it. He isn’t sacrificing for the betterment of your kids and is looking to get paid in the process.
I am a paralegal in Family Law in Texas. I can’t give legal advice but I would say you can’t afford to NOT have an attorney. See if anyone can loan you the retainer or try to get a small personal loan. Easier to get 7500 than 44k.
From what I’ve seen, the Courts here would order the house to be sold, all debt paid off THEN split the proceeds. So, he may not be entitled to that much anyway depending on the equity in the home.
I do agree with everyone else that you may not WANT to move the kids, but if you’re struggling to pay bills now and then, need to figure out paying him and debt, etc what if you lose the house later anyway? Is he going to make sure you and kids always get to stay there if you’re struggling?
I would look at areas you can afford giving you more than $50/week for emergencies.
You own a house you can’t afford, it is also now too big for you.
You voluntarily took on a large amount of debt (cc, student loans), showing that when you have good credit you aren’t responsible with it.
You are refusing to move to a cheaper location or take on a roommate.
You have no reliable way to earn extra money but don’t want to reduce expenses.
Yeah, this mess is entirely your own creation, and even if someone gifted you 40k to buy out your ex you’d still be broke because you don’t manage your money well.
The short answer is you can’t. You can’t put any money aside to save that you don’t have. Even with a second job you still will still come up short. If you are having that little put into savings every month you are one repair away from disaster and your other debt is crushing you financially. You spend over 2400 dollars a month just for the house alone. Not including the debts you owe. You will probably have to rent for a while and move a little further out to be able to afford it if the rent in your area are expensive. I have a feeling your soon to be ex husband knew you wouldn’t be able to do it alone and that is why he proposed this to you.
Unfortunately you need to sell this house you can’t afford to keep it. If you lost your job tomorrow or needed to replace your car you would absolutely go into foreclosure. Sell the house, rent and get a second job to pay down some of your debt. It will take you years to pay down that debt but it must be done. As parents we all have to make sacrifices of some sort. I know I did. A good solid year of eating rice, ramen and eggs when I didn’t have my son just to stay out of the red.
It killed me to lose my house to foreclosure as it was the house I raised my son in, but I just couldn’t afford it anymore. I had to rent for almost 8 years after the foreclosure to get my debt paid down and fix my credit. If I can do it anyone can! I did buy again eventually and saved up enough to buy a place to raise my son. It was bittersweet to say the least.
If I am reading this right if you sold the house you would each net 40k? That seems like enough to at least get back on your feet again. You aren’t getting into a house and shouldn’t be in a house anytime soon until you have more of your debt paid off. Your credit can be repaired with time. My score was very low 500s. I couldn’t even get a car loan with a cosigner. I buckled down, got a second job, paid down my debts and repaired my credit. It took me 8 years but I was able to buy a house again. I’m sure there are other ways you can save money. We cook a lot of meals at home that are just as good as the restaurant. If you are going out to eat more than once a month you need to cut that out right now. 100 dollars a month for car insurance also seems very high. I pay half that amount for a brand new vehicle with full coverage an a lower deductible. You may want to call around and get some quotes. It may not seem like a big deal, but it is when every dollar counts.
Check with your work to see if they offer legal assistance. You may be paying for that benefit without knowing. Like you may have so many hours a yr to consult a lawyer. But you don’t need a lawyer on retainer. Pay for a couple of hours so you can at least talk to someone and get their opinion on next steps and options. You are currently being taken advantage of. If he ruined the marriage through affairs, would you be able to keep all proceeds of the house or even just keep the house? Something to consider. But do your due diligence for your kids sake and consult a laywer.
What would you do if the furnace or hot water heater broke? Houses can get very expensive, very fast. I don’t think you have enough money to stay in the house, even without paying your ex $40K. It sounds like you and your ex have been living above your means for some time, including an area with the best schools, and the divorce is only going to make that worse.
That $55k cc debt… would u have enough equity to payoff debt if u sold house? If so do that.
A few creative options
Could u live with parents nearby and rent out this house for 2 years? If so could you get a second job and work 80+ hours a week.
Could you rent out spare bedrooms?? I get like $750 a month per room renting to foreign interns through work. My adult kids love having someone to hang with. Maybe local travel nurses
What c an u sell? TV, jewelry,?? If you can
Replace it for what u can get. Sell and throw at cc debt.
Just so you know, there may be a way for you to keep the existing mortgage (without refinancing) and take your ex’s name of the mortgage. It’s called Mortgage Assumption.
All terms of the mortgage remain the same – interest rate, payment amount, amoritization scheduled, etc. except one borrower is removed and the other borrower remains (as long as they qualify on their own).
Many banks might say they won’t allow it and it may even be specifically prohibited in the mortgage contract. But even with those being true it may still be possible with perseverance.
You need a lawyer. You have custody of the children and a home to run for them. You shouldn’t have to come up with $40K. That’s ridiculous.
YOU NEED A LAWYER.
You are in a tough situation. I recommend that you go to counseling and see if there’s any way your husband can move back in and you could co-exist peacefully until you are in a better financial situation to divorce if it comes to that. I say this because you have repeatedly stated that you want your kids to be able to stay in the house. You said you would be willing to live in a box, so see if there is any way you would be willing to have him move back home. I know couples that have done this; basically treat each other as roommates just to keep the peace and aggressively pay down debt and save in order to live separately at some point.
I don’t see any other way that you can stay in the house unless you take in a roommate or are able to borrow money from a family member or friend who will wait some time before you can make payments.
You are concerned that you wouldn’t have anywhere to move if you sell the house because of your credit. You could ask the buyers to rent back to you for a short while. Then you could use the proceeds to pay a substantial amount to a landlord; e.g., large security deposit, first and last months’ rent plus an additional month or so. They may be willing to sign a lease under these conditions in spite of your credit score.
You really need to have a lawyer help with a settlement agreement. I did a mediated divorce in a community property state. The lawyer took us through marital assets and liabilities and we agreed to 50/50 split. I kept the house and her equity came via 401k through QDRO. The mediation also covered child support. Custody was 50/50 but income was not balanced so support was due. We paid lawyer $2k and had it done in 4 hours.
Here is my advice, don’t take his deal, you can’t afford it and you will be worse off. I’ll assume you both have 40k of equity, (80k split). So, I would get him to pay the mortgage until the end of the school year, and pay you your 40K in equity. This buys you time to focus on your kids, not worry about money right now and not worry about the mortgage.
This gets him out of your life sooner, allows your kids to finish school this year while get a plan. And lastly, the equity you do have, can go towards your CC debt. You can knock off that 15k much easier then. Your plan after the school year would be to rent something nearby if the school is a must or somewhere you can afford. Don’t worry about buying a house, keep your IRA. Once your debt is gone, you can build from there.
Definitely get a lawyer. He sounds shifty. You might be entitled to much more than you think. What’s his income? What are his assets? Lawyers can suck but in this case you want a fair settlement. No need to drag it out, but simply make it work for you and the kids.
His deal will bankrupt you.
You will regret any handshake deals you make with your ex for the rest of your life. Do not make any agreements without legal help. I know it’s expensive, I know it will put you more in the hole, but you’ll be worse off. I can already see your ex is scheming.
SC is an equitable division state, and from my brief, not a lawyer read, it seems that an CC debt acquired during the marriage could be the responsibility of both parties. So unless you have $110k of credit card debt between you that you’re splitting equally, you might want to lawyer up. On the other hand, if the $55k is all you, and you spent it on non-essentials without your partner’s knowledge, you’ll probably have a weaker case.
Try to find pro bono (free) legal aid. Make dozens of calls to every number you can find. You need a lawyer, for your and your kids sake.
Basically you can’t afford the house but you also don’t qualify for any other housing due to your credit score. I am sorry that you are in this position.
Ideally you need to sell the house but not before you find somewhere else to live. If you can’t find somewhere else then you are going to have to file for bankruptcy and work out a payment plan with your ex .
He wants $40k now but he has to know your financial situation and that there is no way you can pay him.
Good luck! I hope you find a solution that you all can live with
It’s not uncommon for the leaving spouse to hold the equity in the house until the kids are no longer school age, or for a fixed number of years, then the house is sold (or the spouse in the house to refinance or pay off the ex). You and your lawyer need to work on some creative solutions that don’t require you to find $40k that you don’t have.
I would get a second opinion from another divorce lawyer. Considering that you worked part-time for various years to care for the children and that your $55k was accrued in service of the family, you may be entitled to the full equity payment on the house.
Get a lawyer and have them get you settled. Do not take this deal. Sounds like your husband is not putting your kids first.