Royaly screwed???

[ouch]

What is the name of your state?West Virginia O.K. wife moved out 10 months ago,recently filed for divorce. My home is in my name and was purchased a year before we got married. Now I lost my job and am forced to sell the house. What will happen if I cash in my 401k and buy a smaller house with the money before we ever go to court. I don't want to have to do this but I feel I have no choice. We were only married 4 years and she has been gone for 10 months so I don't even know how the 401k money would be split in divorce court. But I have to put a roof over my and my childrens head. Any advice??? Also the equity in my house is only about $2000. because of a refi less than two years ago so I will lose money when I sell it.

 

[ouch]

Hello??? No advice???

 

[ceara19]

She is entitled to half of the 401K for the years you were married only, not the entire amount. Get all of the necessary paperwork together that shows any contributions and growth DURING your marriage. Request a hearing for temporary orders. Submit the paperwork and ask the judge if you can cash in you 401K to purchase a house. Explain that you will surrender half of the amount accrued during the marriage to your spouse when the divorce is finalized, but you need access to the rest of the money to find affordable housing and put the marital home on the market. She's also entitled to half of the escrow, assuming there is any, accumulated during the marriage once the house sells.

It's not a sure thing that you will get it, but you'd have a fairly good shot as long as you are honest upfront about the situation.

 

[LdiJ]

From a financial standpoint I have to say that I think the whole plan is a bad one.

If you can't afford the current house, then get an apartment temporarily until you have time to assess your budget and see what is reasonable for you in terms of saving a down payment towards purchasing a house. Leave your retirement funds alone.

I realize that you don't have a job, but you can get temporary jobs to bring in income until you find something permanent. Its a very bad idea to try to buy a house when you don't know how much mortgage you will be able to afford.....and its an even dumber idea to cash in your retirement to pay cash for a house.

Take the time to assess your situation. You will have to pay taxes on any funds you remove from the 401k....and you will also have to pay a 10% penalty on top of that because you aren't a first time home buyer.