401k loans & divorce

[nevfive5]

What is the name of your state (only U.S. law)? Ohio. I am contemplating divorce and all credit card debt is in my name. Husband can not get credit card to assume half of debt. Should I have him take out a 401k loan to assume half of it. Wd both have equal 401ks- no loans against mine. I need him to assume half of debt before initiating divorce in case he just walks and leaves me with it. It could take some time for the courts to catch up w/ him and by that time I may lose the house making those payments.

 

[Ohiogal]

What is the name of your state (only U.S. law)? Ohio. I am contemplating divorce and all credit card debt is in my name. Husband can not get credit card to assume half of debt. Should I have him take out a 401k loan to assume half of it. Wd both have equal 401ks- no loans against mine. I need him to assume half of debt before initiating divorce in case he just walks and leaves me with it. It could take some time for the courts to catch up w/ him and by that time I may lose the house making those payments.

He is entitled to half of what accrued during the marriage of your 401k. You are aware of that aren't you? You are also entitled to half of whatever accrued during the marriage of his 401k. He doesn't have to assume ANY of the debt quite frankly. He can refuse to take a loan. In fact, he would be SMART to refuse to take a loan against HIS 401k. Then what is going to happen? You may end up paying it all. How much are the 401ks worth and how much of each accrued during the marriage? How much is the debt?

 

[nextwife]

Due to penalties and taxes, a pre -retirement tap out of 401k dollars is not an "equivilent value".

10k, for example of non 401 k is NOT equal to 10k of 401k dollars, if that money is accessed prematurely..

 

[Ohiogal]

Due to penalties and taxes, a pre -retirement tap out of 401k dollars is not an "equivilent value".

10k, for example of non 401 k is NOT equal to 10k of 401k dollars, if that money is accessed prematurely..

I could be wrong but I don't think you pay taxes and penalties on a 401k loan.

 

[nextwife]

I could be wrong but I don't think you pay taxes and penalties on a 401k loan.

You do if you are unable to pay it back, unlike other debt. Additionally, there are limited circumstances under which a 401k administrator can allow a 401k loan.