401k for cc debit

[Here_We_Go]

we have 80k in cc debit wife has 100k in 401k. I told her i would take more of the debit for more of the 401k. I cashed out mine to pay down cc debit earlier this year. It would not be $1 for $1 because i said i needed money to cover interest over the next few years. anyone have a formula for this, or ever done this. i have 50k in my name she has 30k in hers. how do you move money tax penalty free from a 401k to a roth ira? What is it called QRDO ??

[anonymous guest]

Find the value of the 401K at the start of the marriage, and the value now. Divide by 2.
Find the CC balance at the start of the marriage, and the value now. Divide by 2.
That is the equity you both have in the 401k, and the amount of debt you both owe.
The divorce decree will address who gets what debt, and what assets. Some 401ks require a QDRO to take money out, some don't. Hit up the 401k plan website to see their requirements.

[hoosier_dad]

The question shouldn't be how to cash out your retirement, but rather should you. With that large an amount of cc debt and a looming financial hit via the divorce you seem to be a prime candidate for a bankruptcy filing. Have you considered that alternative?

[Fatheroffour]

At 1000 bucks a month interest on CC debt, bankruptcy is looking mighty good.

[Here_We_Go]

wow. so i am not liable for cc debt she came into the marriage with? It is all in different credit cards now and been transferred all over H E double hockey sticks.

[Here_We_Go]

@ hoosier I was planning on putting her retirement to my ira not a cash out. I plan to pay off the debit over the next few years. After we sell the house i was thinking of moving into my dad's ranch for a year or so rent free to pay off all my debt.

is bankruptcy a cop out?



I didn't spent myself into oblivion my stbx did.

[Fatheroffour]

is bankruptcy a cop out?

Your opinion is the only one that matters.

[coscrewed]

I'm 99% sure you can NOT use a QDRO to roll money from a 401K or regular IRA into a Roth IRA, unless you pay taxes on the deposit into the Roth at the time of transfer. If you roll the money into a traditional IRA, no taxes or penalties are paid.

Be very careful, because when it comes to 401K/IRA transfers all that matters is that the paperwork is done properly or not. Your INTENT doesn't matter. In other words, if you screw up the transfer, and the IRS comes back and demands taxes on the money, you saying that you didn't mean to do it wrong means nothing. You either did it correctly or not.

It seems to me that a better solution would be to roll the money into a regular IRA with the QDRO, and then convert that IRA to Roth later to minimize taxes. But I am not an accountant. You need one.

[BubbaGumpShrimp]

At 1000 bucks a month interest on CC debt, bankruptcy is looking mighty good.

x2. That's the direction I'm leaning too.