The Judge has said he will QDRO ALL of my retirement, now what?

[bd420]

What is the name of your state?
Michigan.

At the Pre-Trial Settlement Hearing, the Judge told both my stbx's atty and my atty that he would QDRO (Qualified Domestic Relations Order) the entire amount of the difference between my wifes retirement (8K) and my retirement (51k), therefore, my stbx would have to take (43k / 2 = 21.5k).

This throws a major monkey wrench into the stalemate, mostly for my stbx, since she really needs cold hard cash, whereas I don't care either way. Since I was going to owe her about 10k WITH the Retirement Money being counted as a negotiable asset, the Judge's decision would mean that my stbx would have to take the 21.5k in retirement difference and PAY ME (somehow?) 11.5k?! Needless to say, she was devasted by this news, I told her repeatedly it wasn't a good idea for her to quit negotiating with me on May 3rd (over 2 months ago), she was being stubborn in my opinion.

The judge's reasoning for the QDRO made sense to me, since I was claiming ownership for 32k in credit card debt (ALL is in my name), my stbx would be by in large, splitting the 32k down the middle.

If my calculations are roughly close, extracting cash from a retirement account of 21.5k will be subject to the 10% early extract penalty + 28% in fed taxes on the spot + 6.2% for State Taxes, which is 44%, leaving only 12k of cash after the transaction is done. At that point, my stbx would still have to pay me 11.5k, which in effect, leaves her with .5k, next to nothing.

It appears I have the upper hand in negotiations at this point, and she is in a precarious position, perhaps she has finally been awakened after her near 7 month irresponsibility slumber?

Looking for some input on what to do at the next bargaining session, any input would be appreciated. I should also point out that her atty is holding about 14k of a HELOC of mine as well that I'm none to pleased about, I've already made 2 payments on this debt's interest.

Thanks so much,

bd.

 

[LdiJ]

What is the name of your state?
Michigan.

At the Pre-Trial Settlement Hearing, the Judge told both my stbx's atty and my atty that he would QDRO (Qualified Domestic Relations Order) the entire amount of the difference between my wifes retirement (8K) and my retirement (51k), therefore, my stbx would have to take (43k / 2 = 21.5k).

This throws a major monkey wrench into the stalemate, mostly for my stbx, since she really needs cold hard cash, whereas I don't care either way. Since I was going to owe her about 10k WITH the Retirement Money being counted as a negotiable asset, the Judge's decision would mean that my stbx would have to take the 21.5k in retirement difference and PAY ME (somehow?) 11.5k?! Needless to say, she was devasted by this news, I told her repeatedly it wasn't a good idea for her to quit negotiating with me on May 3rd (over 2 months ago), she was being stubborn in my opinion.

The judge's reasoning for the QDRO made sense to me, since I was claiming ownership for 32k in credit card debt (ALL is in my name), my stbx would be by in large, splitting the 32k down the middle.

If my calculations are roughly close, extracting cash from a retirement account of 21.5k will be subject to the 10% early extract penalty + 28% in fed taxes on the spot + 6.2% for State Taxes, which is 44%, leaving only 12k of cash after the transaction is done. At that point, my stbx would still have to pay me 11.5k, which in effect, leaves her with .5k, next to nothing.

It appears I have the upper hand in negotiations at this point, and she is in a precarious position, perhaps she has finally been awakened after her near 7 month irresponsibility slumber?

Looking for some input on what to do at the next bargaining session, any input would be appreciated. I should also point out that her atty is holding about 14k of a HELOC of mine as well that I'm none to pleased about, I've already made 2 payments on this debt's interest.

The judge's decision isn't particularly in either of your best interests. I think you two need to go back to the negotiating table.

 

[bd420]

I realize the judge's decision hurts us both...

I realize the judge's decision hurts us both, however, I 'can' simply replace my retirement 'loss' with the 14k of my HELOC being held in escrow at my stbx's atty's office over the course of several years (putting in the max).

I realize we should go back to the negotiating table, and I'm wondering what a fair offer is at this point. I'm thinking of offering her 5k in cash from my HELOC and 2k from my retirement as a first offer, however, I have no idea if this is fair or not for either of us.

I guess I'm just looking for a little insight knowing that my stbx is completely desparate for cold cash as she has already spent thousands of what she erroneously thought was going to be her final payoff based on asset division assumptions from months ago. The judge squelched that for her, and simply surprised me, while she is quite shaken.

Thanks, we have a meeting on July 21st at her atty's office.

 

[LdiJ]

I realize the judge's decision hurts us both, however, I 'can' simply replace my retirement 'loss' with the 14k of my HELOC being held in escrow at my stbx's atty's office over the course of several years (putting in the max).

I realize we should go back to the negotiating table, and I'm wondering what a fair offer is at this point. I'm thinking of offering her 5k in cash from my HELOC and 2k from my retirement as a first offer, however, I have no idea if this is fair or not for either of us.

I guess I'm just looking for a little insight knowing that my stbx is completely desparate for cold cash as she has already spent thousands of what she erroneously thought was going to be her final payoff based on asset division assumptions from months ago. The judge squelched that for her, and simply surprised me, while she is quite shaken.

Thanks, we have a meeting on July 21st at her atty's office.

You and I had a discussion on this back in April. At that time we determined that her "share" of the total assets minus debts was 16.6k plus the 8k that she had in her possession in your retirement account.

At that time you were planning on keeping the house and retirement account, and paying her the 16.6k. What has changed since then?...and explain why the attorney is holding 14k of your HELOC (I assume you are referring to a home equity loan there?...if not, please clarify)

 

[bd420]

>>You and I had a discussion on this back in April. At that time we determined that her "share" of the total assets minus debts was 16.6k plus the 8k that she had in her possession in your retirement account.

The 16.6k amount has been reduced to 12k in her newest proposal, as she simply left out several items.


>>At that time you were planning on keeping the house and retirement account, and paying her the 16.6k. What has changed since then?

I still plan on keeping the house, I had a refinance done in Mid-March, as far as retirement goes, I'm okay with giving up some of it to retain as much of the 14k in the HELOC as I can for the 32k in Credit Card bills, which I really need.

>>...and explain why the attorney is holding 14k of your HELOC (I assume you are referring to a home equity loan there?...if not, please clarify)

Yes, the equity loan is being retained by her atty as leverage and an asset so I can pay her cash. I couldn't get my stbx to sign for the refinance unless I agreed to put this 'asset' into her atty's hands, and I personally needed the refinance to keep the house by eventually using the loan to pay off CC debts. Obviously I haven't been able to do the later, since my stbx and her atty have erroneously determined that this 14k of debt that I'm now paying interest on while it's in escrow is actually an 'asset', lol. This is precisely why the judge wants to QDRO the retirement, as he won't order that I pay off my wife with debt when an asset is readily available.

The newest twist is that my stbx has today decided in a faxed offer to 1) Include Alimony for the first time, apparently this is based on a 'case score'? of 41 out of 100, not sure if that holds any merit, we were married for 8 years, and our income ratio is 5 to 2. Also, I see that the Child Support calculation has been changed from the Joint Formula to the Shared Economic Formula, which increased the monthly amount by $150 per month. She is will ing to drop the Alimony claim altogether, and place the CS Calculation back to what it is now, for 14k in cold cash. Go figure.

So now I have to figure out how plausible this alimony bomb she just dropped at the 11th hour is, I was told in Michigan one needs to be married for 12 years OR have a substantial difference in income, moreso than what we have.

Back to the drawing board?

 

[LdiJ]

>>You and I had a discussion on this back in April. At that time we determined that her "share" of the total assets minus debts was 16.6k plus the 8k that she had in her possession in your retirement account.

The 16.6k amount has been reduced to 12k in her newest proposal, as she simply left out several items.


>>At that time you were planning on keeping the house and retirement account, and paying her the 16.6k. What has changed since then?

I still plan on keeping the house, I had a refinance done in Mid-March, as far as retirement goes, I'm okay with giving up some of it to retain as much of the 14k in the HELOC as I can for the 32k in Credit Card bills, which I really need.

>>...and explain why the attorney is holding 14k of your HELOC (I assume you are referring to a home equity loan there?...if not, please clarify)

Yes, the equity loan is being retained by her atty as leverage and an asset so I can pay her cash. I couldn't get my stbx to sign for the refinance unless I agreed to put this 'asset' into her atty's hands, and I personally needed the refinance to keep the house by eventually using the loan to pay off CC debts. Obviously I haven't been able to do the later, since my stbx and her atty have erroneously determined that this 14k of debt that I'm now paying interest on while it's in escrow is actually an 'asset', lol. This is precisely why the judge wants to QDRO the retirement, as he won't order that I pay off my wife with debt when an asset is readily available.

The newest twist is that my stbx has today decided in a faxed offer to 1) Include Alimony for the first time, apparently this is based on a 'case score'? of 41 out of 100, not sure if that holds any merit, we were married for 8 years, and our income ratio is 5 to 2. Also, I see that the Child Support calculation has been changed from the Joint Formula to the Shared Economic Formula, which increased the monthly amount by $150 per month. She is will ing to drop the Alimony claim altogether, and place the CS Calculation back to what it is now, for 14k in cold cash. Go figure.

So now I have to figure out how plausible this alimony bomb she just dropped at the 11th hour is, I was told in Michigan one needs to be married for 12 years OR have a substantial difference in income, moreso than what we have.

Back to the drawing board?

Well...that is a pretty substantial difference in income, you make 2 1/2 times what she makes, so I don't think alimony is completely out of the question.

I also personally don't think you are doing the right thing by not agreeing to give her the cash. I also don't think its the right decision for you. Basically, you are keeping your retirement account intact and keeping a greater portion of the equity in the home in exchange for keeping the debts.

I also disagree with the judge. Normally when a house is involved the person keeping the house DOES need to take on additional debt in order to buy the other person out.

 

[bd420]

The alimony score, based on Michigan, is listed as 'At Margin' and the duration would be for 2.4 years if it passed. What was left out is that my stbx has a rental unit that she is leasing for $350 per month on her property, I would assume this would be factored in to 'something'. Also, she is on written record that she is doing just fine financially, it was actually quite a point of emphasis on her part, perhaps that is just her pride getting in the way of reality.

As I said, I would like to settle by giving some combo of cash and retirement, to maximixe the HELOC, which is where the cash would come from in the first place. She basically wants the entire amount of what's left in the HELOC after my original 2nd mortgage was extracted from the balance, to be given to her.

I agree about your summary keeping retirement in exchage for the debts, I'm just weighing them right now in reference for my ability to pay the debts with the HELOC becoming a new debt entirely, instead of being used to help.

The judge's main issue with taking on MORE debt was that I already was willing to take ownership of 32k, which he felt was somewhat generous of me, perhaps swayed after he saw the largest dozens of big ticket items I listed on my settlement offer that my stbx charged on credit cards. Granted, he concluded I can't make her pay for them, but just seeing the thorougness might have had a positive affect on him, conversely, the fact the he has dealt with my stbx within the last 9 months from her OUIL conviction may have had a negative impact for her. That's hard to say.

I guess my worst case is she gets the rest of my HELOC, and I'm 32k in CC in debt and then the full 30k in the HELOC in debt, but I keep my retirement.

 

[LdiJ]

The alimony score, based on Michigan, is listed as 'At Margin' and the duration would be for 2.4 years if it passed. What was left out is that my stbx has a rental unit that she is leasing for $350 per month on her property, I would assume this would be factored in to 'something'. Also, she is on written record that she is doing just fine financially, it was actually quite a point of emphasis on her part, perhaps that is just her pride getting in the way of reality.

As I said, I would like to settle by giving some combo of cash and retirement, to maximixe the HELOC, which is where the cash would come from in the first place. She basically wants the entire amount of what's left in the HELOC after my original 2nd mortgage was extracted from the balance, to be given to her.

I agree about your summary keeping retirement in exchage for the debts, I'm just weighing them right now in reference for my ability to pay the debts with the HELOC becoming a new debt entirely, instead of being used to help.

The judge's main issue with taking on MORE debt was that I already was willing to take ownership of 32k, which he felt was somewhat generous of me, perhaps swayed after he saw the largest dozens of big ticket items I listed on my settlement offer that my stbx charged on credit cards. Granted, he concluded I can't make her pay for them, but just seeing the thorougness might have had a positive affect on him, conversely, the fact the he has dealt with my stbx within the last 9 months from her OUIL conviction may have had a negative impact for her. That's hard to say.

I guess my worst case is she gets the rest of my HELOC, and I'm 32k in CC in debt and then the full 30k in the HELOC in debt, but I keep my retirement.

It might be in your best interest...after everything is done, to roll that HELOC into your regular mortgage.....by doing another refi.

 

[bd420]

I agree on trying to Refinance once again, however

I agree on trying to Refinance once again, however, needless to say, my loan to debt ratio is waaay to high, and my house would have to appraise at about 35k more than it just did since I refi'ed to nearly 100% of the last appraisal

I believe I'm going to disregard the spousal support altogether from this offer and consider it a standard smokescreen attempt (a few aspects of it violate the temporary court order, I think my stbx atty is trying to appease by appearing to 'pull out all the stops' for her client, etc), and simply offer 5 to 7k in cash from a credit card I have at 0% in my checking account, available for immediate dispersal on this thursday at the next negotiation attemp, perhaps this will entice her and get this entire ordeal over with.

Thanks for your input, I'll re-post thursdays results, assuming it's not post-poned.

bd