# Finance Strategy Question



## scooterM (Apr 4, 2016)

Strategy question here... I'm close to starting the divorce process and want to know if I should pay off debt now or wait for it to be split. 

Here's our situation:
Married 17 years, she has not worked for 14 of them (by choice, no other reason) and has never contributed a penny to our household expenses during the entire marriage.

Through my two jobs and investments, I have accumulated a significant savings.

We have the following debt:
Her car: $22k
Home remodel loan: $30k
My car: $10k
House $170k (about $200k equity includes $80k down payment from pre-marital assets.)

My hope is to remain in the house. I have more than enough in savings to cover all the loans. The $30k remodel did not add $30k value to the house since a big part was actually a repair.

So the question is, do I just continue on as normal, or pay off some or all of the debt before telling her I want a divorce? I'm not excited about her getting 1/2 of my savings, but I'm not excited about getting stuck with all the debt either. 

Thoughts? Ideas?


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## MJJEAN (Jun 26, 2015)

Since some assets, like the downpayment for the house, came from premarital funds, I'd go straight to a lawyer. Laws governing the division of assets and debts vary wildly from state to state.


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## Married but Happy (Aug 13, 2013)

Indeed, see a lawyer. However, my thought is that it would be best to pay off as much debt as possible now, depleting savings and investment, otherwise she may get half or more of the assets and less than half of the debts because of her lower income. And you will likely pay alimony for at least some period of time - maybe permanently, depending on your state, her current work situation and earnings, etc.

Paying off debt now protects you from getting it mostly dumped on you later, and having fewer assets left means less to split in ways that may not be good for you. If you have pre-marital assets that have been kept separate (e.g., 401k or IRA from work before you married, do not use that money to pay debts, as that should be exclusively yours if you can document that it existed pre-marriage and was not commingled after).

You might also want to quit one of the jobs to reduce your income before you file - however, it may be too late to do that, and the income may be attributed to you anyway for purposes of alimony. See a lawyer!


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## brooklynAnn (Jun 29, 2015)

Check with a lawyer first and see what they say. I think you can pay off the debt first and that way you don't get stuck with more of the debt that her and only half of the savings. 

Like MrFisty said stop working 1 of the jobs which will inflate your income. You will be paying spousal support which will be based on your earnings. So, stop working 2 jobs and work 1. Then, wait for the new taxes with the 1 job to be submitted for your income. 

Or you will spend the rest of your life working 2 jobs to pay alimony. 

Speak to a lawyer and a Financial planner. See this as a business venture and take the steps necessary for a successful outcome.


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## foolscotton3 (Nov 13, 2014)

Choosing to pay off/down as much of the debt as possible was the best strategy for my divorce.

We lived in a community property state, she had little to no income 1/10 of our household earnings.

I would have ended up with most of the marital debt and less than half of the estate based on the fact I made 10x as much as her.

Sent from my Z936L using Tapatalk


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## scooterM (Apr 4, 2016)

Thanks for the advice folks. I wish I could quit one of the jobs - one is a full time job that provide the majority of income, all the insurance, etc. The 2nd is a part time side business which maybe a bit harder to just quit.


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