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alan4038
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Reged: 07/17/07
Posts: 1

Credit Card Debt vs 401k Contributions

07/17/07 10:20 AM

I'm just out of a one year marriage and going through mediation. One aspect is $10,000 of credit card debt vs $11,500 of my 401k contributions made during the marriage. We agree that both are community property. One third of the 401k contributions are from employer matching and all of it is 100% vested. Divorce is in Sacramento county California.

I offered to pay off the $10,000 credit card if I could keep my $11,500 of 401k contributions. I thought this was generous because after taxes (25% maybe), the $11,500 of 401k would be worth less than $10,000. If I were to try to pay off the credit card by cashing in 401k contributions I would come up short. Two attorneys I've talked to, and an accountant agree with me.

The mediator says I should pay off the credit card, and give my ex $750 more because my 401k contributions during the marriage were $1,500 more than the credit card debt. I strongly disagreed stating that the 401k was pre-tax money but couldn't convince the mediator. The mediator then brought in an attorney next door to her office who agreed with her.

Who is right?

Thanks,
Alan

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Entire topic
Subject	Posted by	Posted on
Credit Card Debt vs 401k Contributions	alan4038	07/17/07 10:20 AM
Re: Credit Card Debt vs 401k Contributions	irsfixer	07/17/07 03:10 PM

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