How do people find money to move out when separating or divorcing?
February 11, 2014 6:44 AM Subscribe
A asks B for a divorce. B is not surprised. B agrees, even though B would prefer to stay in an unhappy marriage rather than be branded with a scarlet D*. A wants to move out ASAP. Generally speaking, how do the financial logistics of this work? No special snowflake details inside.
Asking about, but not for, a friend.
I know there are all sorts of legal steps and implications at this stage, but I am only interested in the logistics of how the A’s in this situation find the money to move out.
In this case, A and B have been married ~15 years and their incomes and assets are joined. Does A start putting aside some part of their joint income to save up for moving expense after the announcement has been made? Does B have a (practical) choice and/or say in the matter? In this example B is responsible for all the banking and bill paying, so if A had started squirreling away money beforehand B would start to notice. (I would also think that B would find this to be deceitful.)
A is looking to find an inexpensive place to live until everything is “official” but how does A take on the extra financial burden while fulfilling commitments to B, whether it is a mortgage or rent. (If it matters, A and B own a home with a market value of ~$1M but have little equity in the home and have been hit very hard by the economic climate.)
You get the idea. I’m curious about in the various ways the As of the world ever move out before houses are sold and leases expire. It's fine if there is a mandatory legal aspect to putting together the funds but I am not asking for legal advice.
Anon because some RL Mefite friends also know A and B.
*B’s words, not mine.
Asking about, but not for, a friend.
I know there are all sorts of legal steps and implications at this stage, but I am only interested in the logistics of how the A’s in this situation find the money to move out.
In this case, A and B have been married ~15 years and their incomes and assets are joined. Does A start putting aside some part of their joint income to save up for moving expense after the announcement has been made? Does B have a (practical) choice and/or say in the matter? In this example B is responsible for all the banking and bill paying, so if A had started squirreling away money beforehand B would start to notice. (I would also think that B would find this to be deceitful.)
A is looking to find an inexpensive place to live until everything is “official” but how does A take on the extra financial burden while fulfilling commitments to B, whether it is a mortgage or rent. (If it matters, A and B own a home with a market value of ~$1M but have little equity in the home and have been hit very hard by the economic climate.)
You get the idea. I’m curious about in the various ways the As of the world ever move out before houses are sold and leases expire. It's fine if there is a mandatory legal aspect to putting together the funds but I am not asking for legal advice.
Anon because some RL Mefite friends also know A and B.
*B’s words, not mine.
Divorce is frequently devestating financially.
Basically until the divorce all money is equally that of the marriage. So if it's decided that it would be best for A to move out, then both parties need to decide to save the money to make that happen.
A lot of times, while being able to move out would be nice, the finances just don't support it. Both parties live in the house together until they can sell it, or until they declare bankruptcy or whatever it is that needs to be done.
Both parties need to see lawyers to work out the divorce, division of assets and debts and for a strategy about what to do with the house.
If they can, the house needs to go on the market NOW. If there isn't enough equity in it to support a change in pricing (if they're upside down on it, where they owe more than it's worth) then they need to understand their options with a short-sale, bankruptcy or other options.
A lot of times, people do take out loans, charge up their credit cards, etc.
As hard as it is, now is NOT the time to think emotionally. Once the decision is made to divorce, if both parties can agree to live separate lives, under one roof, until the home sells, that would be the best financial decision they can make.
A may WANT to leave, but if A doesn't have the money to make that happen, oh well.
But Lawyer, lawyer, lawyer, lawyer.
posted by Ruthless Bunny at 6:52 AM on February 11, 2014 [1 favorite]
Basically until the divorce all money is equally that of the marriage. So if it's decided that it would be best for A to move out, then both parties need to decide to save the money to make that happen.
A lot of times, while being able to move out would be nice, the finances just don't support it. Both parties live in the house together until they can sell it, or until they declare bankruptcy or whatever it is that needs to be done.
Both parties need to see lawyers to work out the divorce, division of assets and debts and for a strategy about what to do with the house.
If they can, the house needs to go on the market NOW. If there isn't enough equity in it to support a change in pricing (if they're upside down on it, where they owe more than it's worth) then they need to understand their options with a short-sale, bankruptcy or other options.
A lot of times, people do take out loans, charge up their credit cards, etc.
As hard as it is, now is NOT the time to think emotionally. Once the decision is made to divorce, if both parties can agree to live separate lives, under one roof, until the home sells, that would be the best financial decision they can make.
A may WANT to leave, but if A doesn't have the money to make that happen, oh well.
But Lawyer, lawyer, lawyer, lawyer.
posted by Ruthless Bunny at 6:52 AM on February 11, 2014 [1 favorite]
If there is a third party involved, A might move in with him/her.
posted by HuronBob at 7:05 AM on February 11, 2014
posted by HuronBob at 7:05 AM on February 11, 2014
If it's an option, A might move out to stay with friends or family temporarily while they decide what to do with the house.
posted by aka burlap at 7:08 AM on February 11, 2014
posted by aka burlap at 7:08 AM on February 11, 2014
Not a divorce because we weren't married, but I did split with a long term boyfriend last year after 14 years of comingled finances. I was the one who moved out and didn't want to stay in our shared home with him, even though as Ruthless Bunny said it would have made alot more financial sense.
I was lucky in that I had a little bit in savings plus my annual work bonus which allowed me to rent a studio apartment while still paying my share of the mortgage, but that's long gone and the credit cards are maxed out. So I am just now digging out of the financial hole that was 2013. And this was without any lawyer bills at all (we managed to get the house refinanced in his name via HARP and didn't need an attorney).
If I had to do it over again I would get the living arrangements sorted out alot faster than I did, because having to pay double housing costs for months was the biggest issue.
posted by cabingirl at 7:30 AM on February 11, 2014
I was lucky in that I had a little bit in savings plus my annual work bonus which allowed me to rent a studio apartment while still paying my share of the mortgage, but that's long gone and the credit cards are maxed out. So I am just now digging out of the financial hole that was 2013. And this was without any lawyer bills at all (we managed to get the house refinanced in his name via HARP and didn't need an attorney).
If I had to do it over again I would get the living arrangements sorted out alot faster than I did, because having to pay double housing costs for months was the biggest issue.
posted by cabingirl at 7:30 AM on February 11, 2014
There's a reason that people say, "If you think getting married is expensive, wait until you see how much the divorce costs."
In my mind, the easiest/cheapest way to get out is either to move in temporarily with a friend, or with their parents (or sometimes with adult children). Either source might allow lower/free rent than an apartment/rented house. Being with friends might help prevent depression, but will come with guilt at taking up space, and you'll want/need to get out sooner. Most would really not relish moving in with their parents as an adult. Beyond crashing with someone else, there isn't a magic way to add a household and have it become cheaper.
The house might have a market value of 1M, but if they're looking to sell fast, they might not get that million, and that little equitty might be negative equity. If neither A nor B can buy the other one out of the house (and get the loan into their name only), it needs to be sold - do the two of you have the money to get it staged to get the best price? What about the 5-7% real estate commission (or taking forever on the market). What about the months while this sits on the market waiting for a price that doesn't put A and B in the red? Bankruptcy might be in both of their futures, and if it's decided now, rather than 6 months from now, that's a lot of stress saved.
I'll N'th that your friend really needs to see a lawyer. The lawyer(s) should be able to say how to handle the commitments to the married household before it's dissolved, and can get everyone looking at finances. Also, everyone agreement between A and B needs to be put down in writing. People will change their minds about things, and something amicable can quickly become acrimonious when someone goes back on their word.
posted by nobeagle at 7:40 AM on February 11, 2014
In my mind, the easiest/cheapest way to get out is either to move in temporarily with a friend, or with their parents (or sometimes with adult children). Either source might allow lower/free rent than an apartment/rented house. Being with friends might help prevent depression, but will come with guilt at taking up space, and you'll want/need to get out sooner. Most would really not relish moving in with their parents as an adult. Beyond crashing with someone else, there isn't a magic way to add a household and have it become cheaper.
The house might have a market value of 1M, but if they're looking to sell fast, they might not get that million, and that little equitty might be negative equity. If neither A nor B can buy the other one out of the house (and get the loan into their name only), it needs to be sold - do the two of you have the money to get it staged to get the best price? What about the 5-7% real estate commission (or taking forever on the market). What about the months while this sits on the market waiting for a price that doesn't put A and B in the red? Bankruptcy might be in both of their futures, and if it's decided now, rather than 6 months from now, that's a lot of stress saved.
I'll N'th that your friend really needs to see a lawyer. The lawyer(s) should be able to say how to handle the commitments to the married household before it's dissolved, and can get everyone looking at finances. Also, everyone agreement between A and B needs to be put down in writing. People will change their minds about things, and something amicable can quickly become acrimonious when someone goes back on their word.
posted by nobeagle at 7:40 AM on February 11, 2014
When I split up a long-term cohabitating non-marriage relationship, neither of us were happy about this, but we were able to come to a good short-term agreement as far as who got how much of our shared cash reserves, and I moved in with my mother. My ex got a roommate to help pay rent. That part would have been harder if we'd been sharing a one-bedroom apartment, but seems perfectly viable with a house.
posted by Sequence at 8:11 AM on February 11, 2014
posted by Sequence at 8:11 AM on February 11, 2014
Oh, and because the term's also an issue, we only had 3-4 months left on our lease, so the roommate was explicitly somebody who was just looking for a temporary place to stay themselves, I'm not necessarily talking about a long-term arrangement.
posted by Sequence at 8:12 AM on February 11, 2014
posted by Sequence at 8:12 AM on February 11, 2014
I was lucky* in that we were living rather below our means at the time, so I had wiggle room in my salary to pay my half of the rent on our shared apartment, and the rent on a really crappy, cheap studio apartment across town. We had 5 months left on our lease and my savings were pretty nominal, maybe a month's salary?
I paid for groceries on credit cards for those five months, and slept on a hardwood floor. (Then on a terrible craigslist mattress.) It took at least a year to get back to financial stability afterwards.
I do not know how my ex's finances fared--since he did not have to move out, I imagine they remained pretty stable, though when the lease ended he would have had to rent his own place for somewhat more money.
*For certain values of lucky
posted by like_a_friend at 8:18 AM on February 11, 2014
I paid for groceries on credit cards for those five months, and slept on a hardwood floor. (Then on a terrible craigslist mattress.) It took at least a year to get back to financial stability afterwards.
I do not know how my ex's finances fared--since he did not have to move out, I imagine they remained pretty stable, though when the lease ended he would have had to rent his own place for somewhat more money.
*For certain values of lucky
posted by like_a_friend at 8:18 AM on February 11, 2014
When my dad and his wife split, they did this
- she moved into a separate bedroom until they could reach an agreement about "who left"
- when she left he agreed, without lawyers, to pay some certain amount of support (just wrote a big check every month) so that she could rent her own place and then when she got a lawyer, he paid for it
- she had credit cards for incidental stuff
- once they got lawyers, they wrote up a separation agreement to fine-tune money stuff while they muddled out the actual specifics of the divorce, this took, literally years
Now this was a specific set of circumstances where they had married later in life and she had no assets of her own that she brought to the marriage. The deal the lawyers wound up with was that she was entitled to a decent amount of support while they were going through the splitting up process. I have an associated rant about some of this (she was in a new relationship which she kept from my father so I think some of his "do the right thing" impetus was misplaced) but ultimately if you're in a situation with unequal finances (or totally shared finances and unequal income) it is very much in the person who wants the divorce's best interests to have legal representation because it's pretty easy to have one person totally sandbag the other and get them to accept much less than they are legally entitled to for various reasons which may have more to do with emotions than the law.
As a different example, when my parents split up (they were separated for 15 years before getting an actual divorce because my mom was a freelancer and blabla reasons, this did not overlap with my father's second marriage at all) my father paid her an amount that *he* thought was reasonable for her support and for child support and he sometimes paid and sometimes didn't. This went on for a long time and was only sustainable because, for various reasons, my mother did not ask for an official divorce and did not get lawyers involved. When they did get lawyers involved it turns out (surprise!) that she was entitled to a lot more, percentagewise, of my father's income during the time they were married--she was a stay-at-home mom with us while my dad had a demanding full time job--which made my father, who vaguely felt like he was "doing the right thing" but didn't actually check in with lawyers, furious when it all happened.
It often feels, in these circumstances like calling in the lawyers is bringing the big guns to a relationship issue. However, unless people absolutely are on the same page about how to proceed (and they very often aren't, and they're dealing with the pain of a dissolving relationship) they can be a way to make sure the process happens fairly. Even though a divorce can feel like you're reinventing the wheel, it's really well-trod territory for the legal establishment.
posted by jessamyn at 8:31 AM on February 11, 2014 [3 favorites]
- she moved into a separate bedroom until they could reach an agreement about "who left"
- when she left he agreed, without lawyers, to pay some certain amount of support (just wrote a big check every month) so that she could rent her own place and then when she got a lawyer, he paid for it
- she had credit cards for incidental stuff
- once they got lawyers, they wrote up a separation agreement to fine-tune money stuff while they muddled out the actual specifics of the divorce, this took, literally years
Now this was a specific set of circumstances where they had married later in life and she had no assets of her own that she brought to the marriage. The deal the lawyers wound up with was that she was entitled to a decent amount of support while they were going through the splitting up process. I have an associated rant about some of this (she was in a new relationship which she kept from my father so I think some of his "do the right thing" impetus was misplaced) but ultimately if you're in a situation with unequal finances (or totally shared finances and unequal income) it is very much in the person who wants the divorce's best interests to have legal representation because it's pretty easy to have one person totally sandbag the other and get them to accept much less than they are legally entitled to for various reasons which may have more to do with emotions than the law.
As a different example, when my parents split up (they were separated for 15 years before getting an actual divorce because my mom was a freelancer and blabla reasons, this did not overlap with my father's second marriage at all) my father paid her an amount that *he* thought was reasonable for her support and for child support and he sometimes paid and sometimes didn't. This went on for a long time and was only sustainable because, for various reasons, my mother did not ask for an official divorce and did not get lawyers involved. When they did get lawyers involved it turns out (surprise!) that she was entitled to a lot more, percentagewise, of my father's income during the time they were married--she was a stay-at-home mom with us while my dad had a demanding full time job--which made my father, who vaguely felt like he was "doing the right thing" but didn't actually check in with lawyers, furious when it all happened.
It often feels, in these circumstances like calling in the lawyers is bringing the big guns to a relationship issue. However, unless people absolutely are on the same page about how to proceed (and they very often aren't, and they're dealing with the pain of a dissolving relationship) they can be a way to make sure the process happens fairly. Even though a divorce can feel like you're reinventing the wheel, it's really well-trod territory for the legal establishment.
posted by jessamyn at 8:31 AM on February 11, 2014 [3 favorites]
How this is handled depends on the degree of douchebaggery each party possesses. I've heard divorce lawyers use the phrase "grab and go" where one of the parties grabs all the assets and leaves. It really does not matter what A or B is legally entitled to, as it's very easy to lie and not disclose assets. Even if one party has a court order for the other to pay some amount, actually enforcing the payment may be impossible.
If B has all the financial control right now, there may be significant assets that A does not even know about. And when A does tell B or serves papers, an hour later A may be locked out of all the accounts.
I suggest that A see at least TWO different lawyers, and research how the usual divorce happens in their state. The temporary agreement is extremely important, as A could be stuck with it for a year or two.
posted by Sophont at 8:55 AM on February 11, 2014
If B has all the financial control right now, there may be significant assets that A does not even know about. And when A does tell B or serves papers, an hour later A may be locked out of all the accounts.
I suggest that A see at least TWO different lawyers, and research how the usual divorce happens in their state. The temporary agreement is extremely important, as A could be stuck with it for a year or two.
posted by Sophont at 8:55 AM on February 11, 2014
Well, I ended up with massive credit card debt that I'm now working to pay off ASAP. It didn't help that splitting up for me entailed leaving the UK and returning to the US. The fortunate bits were that we had both kept our own finances separate (notwithstanding both of us financially supporting the other at different parts of our time together), and I was able to arrange to have a job to land at as soon as I made the move across the Atlantic. We also stuck it out for 9 months until our lease was up, giving me time to arrange things, saving me from having to go live with one of my parents in an area where work would have been much harder to find.
posted by ursus_comiter at 10:07 AM on February 11, 2014
posted by ursus_comiter at 10:07 AM on February 11, 2014
Oh! And doing this also really did a nasty on my credit rating, right at the worst time for it. Filled up my US credit cards, took a job that paid a good deal less than my last US job. Boom. Suddenly the credit limit on my cards plummeted and I'm over the limit, so I got a heaping helping of extra fees and boosted interest rates.
posted by ursus_comiter at 10:13 AM on February 11, 2014
posted by ursus_comiter at 10:13 AM on February 11, 2014
My mom and grandma taught me how to hide cash in the house, enough for a deposit on an apartment and a few months' rent, and keep it secret from the men of the house. I thought every married woman who didn't have an independent income did this (if she was able to), but I wouldn't be surprised if my family was an outlier on this as well as so many other things.
posted by Bentobox Humperdinck at 10:35 AM on February 11, 2014 [7 favorites]
posted by Bentobox Humperdinck at 10:35 AM on February 11, 2014 [7 favorites]
The answer is there are no rules, except maybe the old truths about divorce being expensive and financially devastating. In my case, I wanted the divorce and it would have made more sense w/r/t location for my ex to keep living in the house - my commute from there is over an hour whereas his is closer to 30mins. I in fact intended to keep paying my half of the mortgage and moving out into a tiny cheap apartment. But emotionally he couldn't handle living there so I stayed in the house. Unfortunately we didn't get a chance to discuss finances in detail before he signed the lease on a very expensive 3-bedroom apartment. He had (wrongfully) assumed that he'd be instantly off the hook for the mortgage the minute he moved out, but of course I couldn't afford an entire house by myself. We got a mutual lawyer friend to help us with paperwork and mediation and eventually he agreed that defaulting and ruining both our credit scores wouldn't help anyone.
His lease was already signed, though, so we had to accommodate that. What we did was total up the mortgage plus his rent and split that 50/50 to come up with the number that each of us was paying until the house sold. For a while I got a roommate and that reduced what we each had to contribute. It took almost six months to get the house on the market due to necessary updates and research into the possibility of refinancing.
Eventually the mortgage payment went down (tl;dr: escrow issues) and my new boyfriend moved in. Per the final divorce agreement (we were separated for over a year before it was final) my ex is off the hook for mortgage payments as long as my boyfriend is living there. Boyfriend is contributing rent equal to what the ex used to pay.
It sucks and I am basically broke, both day to day and in terms of my (former) savings account. I will be taking out a very large 401k loan to cover closing costs and possible shortfall on the mortgage balance, depending on what this house eventually sells for. The divorce agreement says I pay any shortfall (or keep any profit). It's been on the market 9 months and I just spent $5k fixing some minor issues and updating a bathroom to help it sell.
I was relatively lucky in that my ex and I both earn similar (decent) salaries, and we bought a house at somewhat less than the max we could afford, so there was some wiggle room there. Even this technically mutually agreed upon divorce has been and will continue to be very expensive for both of us and will affect at least my finances for years to come. My credit card balance is high and rising.
posted by misskaz at 11:05 AM on February 11, 2014
His lease was already signed, though, so we had to accommodate that. What we did was total up the mortgage plus his rent and split that 50/50 to come up with the number that each of us was paying until the house sold. For a while I got a roommate and that reduced what we each had to contribute. It took almost six months to get the house on the market due to necessary updates and research into the possibility of refinancing.
Eventually the mortgage payment went down (tl;dr: escrow issues) and my new boyfriend moved in. Per the final divorce agreement (we were separated for over a year before it was final) my ex is off the hook for mortgage payments as long as my boyfriend is living there. Boyfriend is contributing rent equal to what the ex used to pay.
It sucks and I am basically broke, both day to day and in terms of my (former) savings account. I will be taking out a very large 401k loan to cover closing costs and possible shortfall on the mortgage balance, depending on what this house eventually sells for. The divorce agreement says I pay any shortfall (or keep any profit). It's been on the market 9 months and I just spent $5k fixing some minor issues and updating a bathroom to help it sell.
I was relatively lucky in that my ex and I both earn similar (decent) salaries, and we bought a house at somewhat less than the max we could afford, so there was some wiggle room there. Even this technically mutually agreed upon divorce has been and will continue to be very expensive for both of us and will affect at least my finances for years to come. My credit card balance is high and rising.
posted by misskaz at 11:05 AM on February 11, 2014
There is no pat answer for this, except that both people should discuss it at great length and in detail, writing things down clearly and briefly so that they can refer to it afterwards...not as a formal agreement (yet) but to reduce the stress and animosity of the conversations.
Some people draw a line in the sand on existing funds, agree to split it at some future date, document the amount, open independent accounts into which their salaries each go from that day forward, and agree to take out a certain equal amount from the existing funds to finance short term needs like the move-out/furniture replacement. Some people lock up the money, throw things out on the street and at each other, argue and fight tooth and nail for every last dime. Some people lawyer up and use a mediator to determine short-term financial arrangements. There are lots of other possibilities.
The key thing that matters: getting on the same page in a useful dialogue so that both parties can proceed financially and otherwise in a short-term arrangement that is best for all parties. Lawyers and mediators can help you here, as can marriage counselors. Perhaps you're even the world's most reasonable people and can navigate it yourselves. No matter how you kick it off, though, getting the existing money in a place where neither of you can drain the account -- and trying to negotiate something reasonable to help the person leaving to have food and shelter -- is a good place to start.
posted by davejay at 7:39 PM on February 11, 2014
Some people draw a line in the sand on existing funds, agree to split it at some future date, document the amount, open independent accounts into which their salaries each go from that day forward, and agree to take out a certain equal amount from the existing funds to finance short term needs like the move-out/furniture replacement. Some people lock up the money, throw things out on the street and at each other, argue and fight tooth and nail for every last dime. Some people lawyer up and use a mediator to determine short-term financial arrangements. There are lots of other possibilities.
The key thing that matters: getting on the same page in a useful dialogue so that both parties can proceed financially and otherwise in a short-term arrangement that is best for all parties. Lawyers and mediators can help you here, as can marriage counselors. Perhaps you're even the world's most reasonable people and can navigate it yourselves. No matter how you kick it off, though, getting the existing money in a place where neither of you can drain the account -- and trying to negotiate something reasonable to help the person leaving to have food and shelter -- is a good place to start.
posted by davejay at 7:39 PM on February 11, 2014
How do people find money to move out when separating or divorcing?
You know how sometimes people say they would get a divorce but can't afford it? This is one of the reasons why.
Maybe B could rent out some rooms in the house.
posted by yohko at 5:02 PM on February 14, 2014
You know how sometimes people say they would get a divorce but can't afford it? This is one of the reasons why.
Maybe B could rent out some rooms in the house.
posted by yohko at 5:02 PM on February 14, 2014
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posted by sparklemotion at 6:47 AM on February 11, 2014 [2 favorites]