Just the facts: I make $112k/yr. I have $20k in high interest credit card debt. $8900 in closed credit card debt at 0% with a payment of $192/mo until paid off. I have already paid off two personal loans and one credit card. I’m getting an estate settlement check for $25k. I owe $284k on my home with comps around $460k. Mortgage payment is $2033 and it’s 3.25%. I have a HELOC maxed at $50k.
I need to get a divorce. My way of thinking has been to take the $25k check, pay off the 20k credit cards, and use the left over $5k to get an appraisal on the home and pay the attorney’s retainer. My bank will do 95% LTV on a new HELOC. The current HELOC is with them, so it would just be a new one that wipes out the old one, but I would use another $50k to pay my spouse their share of equity. Only my name is on the deed and the mortgage, but they helped with the down payment and utilities etc., so 50/50 split is probable from the court although I’m trying to get everything done without the court. I guess we’ll see how that goes over. Anyway, the appraisal I pay for, not for the bank, but for proof of how much the house is worth for divorce purposes, will likely come in around $430k or less because of damage my spouse has done to the house. Not out of anger, but out of hygene and hoarding.
If I go with this plan, I will have about $20k emergency fund in place from other areas of equity after the divorce. Either that, or I will pay less than $50k, more like $37k for a total of $87k on the HELOC. I will be paying $2033 for the mortgage, and $800 on the interest only for the HELOC. My end of month money would be around $450-$500. Looking for any advice and also should I just sell the house?
Also have a 5 year old daughter and it would be great if she could stay in the house but kids are resilient and my debt doesn’t need to affect her. I also have a side income stream I can start doing again after my spouse leaves. It brings in about $2k mo on the lower end. I just can’t do it anymore while dealing with all this. And I can’t do it at an apartment parking lot. Needs a driveway.
I can give more detail as I have alone time. The $450 left over was calculated after starting my 15% contribution to retirement, with 5% match. I guess I could wait and just do the 5% while I pay off the $8900 then start doing the full 15%.
My spouse makes just over $20/hr plus time and a half overtime which is always 10-20 hours a week. If I offered for them to buy the house from me, I don’t think they would get approved for the ~$400k it would take to do it. Plus the house has a pool, and I don’t trust them to lock doors because I’ve done it for them almost every day and every night.