Divorce/finances

The default here now is 50/50 custody, which means no child support. If you don't work, spousal support is limited to a small amount for a small period of time. If you agree that one of you is the custodial parent, then the non-custodial parent (NCP) pays child support. When I was a single mom, my order was established almost 15 years ago so things may have changed, but back then it was roughly 25% of income for the NCP plus a little more for a second child. I think it caps out at 33% of income max, so two kids is probably around 28%. Supposedly they formula takes into account the earnings of both parents and the expenses, but at the end of the day, it magically works out to about 25% for one child seemingly regardless of the circumstances.

The negative equity in your house will make things interesting. If you sell it, do you have the cash to cover your loss? That would basically wipe you both out so that each is starting from $0. If you wanted one person to keep the house, somehow between the two of you, you would have to come up wiht the $$ to re-fi into the other person's name. So if you owe $300K and the value is $250, if you wanted to stay in the house, the two of you would need to come up with the additional $50K to pay back the existing loans before you would be able to take out a loan in your own name.

Assuming that you don't have tens of thousands of dollars lying around, your options are not great - you can see if you can short sale (dinging your credit), go into foreclosure (really bad on your credit) or file for bankruptcy (obviously not a great choice either). Or one of you could just take over the mortgage payments, stay in the house, and when the equity is no longer negative, re-fi into the occupant's name only. I know a few couples who are doing this. It means that the spouse who moved out can't buy another place and is still legally tied to the marital home, but it's better than dealing with the fallout of the other options.

At the end of the day, both parents are financially responsible for supporting themselves and their children and have to live within their means. In quite a few cases of friends, one parent was able to buy the other out of whatever equity they had in the home and stay there with the kids as the primary custodial parent and the NCP had to move in with his or her parents because he or she couldn't afford rent on a place large enough to have the kids visit and also keep up with child support.

Honestly, part of the reaon my husband and I didn't split a few years ago when we were seriously considering this was that we were having a hard enough time supporting one household on two incomes (we're also in a negative equity situation) that supporting two households was impossible without making a major move to an area with a lower cost of living (and lousy schools, cramped apartments etc.).

The rest of the debt will depend on whose names are on the accounts. If they're not joint, then whoever signed for the debt generally owns it. If they are joint, then that generally is an even split but that can be negotiated.

Sorry that you're going through this and I hope the process goes smoothly.

That doesn't sound easy to unwind but I am imposing my numbers in your situation so who knows. We were not underwater, we actually had a lot of equity but selling my home was not an option.

Half the assets, half the debt but if you have no assets and the debt is tied to a home the math is impossible without selling the home. The other problem is if you have that much debt you will probably not get out from under it without declaring bankruptcy.

We split the equity and his 401k which were our biggest assets. I assumed the whole mortgage and in return for keeping an equal part of my share of the 401k he assumed all credit card debt.

Anyway without knowing all your numbers I can't really help you beyond saying this is what we did.

ouch. grandparents divorcing now parents? it's been a tough year for you guys!!! I'm sorry!!!

When I divorced, we were living in Germany and didn't own a home. We split the checking and savings down the middle. We each owned our own cars outright and each kept our respective cars - just signed title over (they were in both our names). Debt? Since I kept all the books - I had shown him his debt and mine (use of credit cards) and he took his and I took mine.

In your situation? what would **I** do? I would have the one who can afford the mortgage stay in the house. Unless you have the funds to short sale and pay the difference....worst case? declare bankruptcy....

I would contact an attorney and find out the Massachusetts law and work off that. If it's going to be an amicable divorce - then go to the lawyer together and find out what to do.

I know you didn't ask this - have you tried counseling?

I wish you luck and peace. Divorce isn't fun and it isn't easy.