Can I save our credit with a quickie divorce?
If you're not insolvent, doing something like this is both a moral and legal hazard: When you are insolvent, the tax and moral hazard issues can be a non-issue. Setting up a scenario that makes you appear to be insolvent is where the fraud comes in. If you decide to go down this road, spend a few thousand dollars on competent legal advice. My advice to you? Act like responsible adults and owe up to your financial commitments.  When you bought your house and took out a loan from the bank, you made an agreement to pay it back. If you breach this agreement, you deserve to have your credit score trashed.  What do you think will happen to the $100K+ if you decide to stiff the bank? The bank will make up for its loss by increasing the mortgage rates for others that are taking out loans, so responsible borrowers get to subsidize those that shirk their responsibilities. If you were in a true hardship situation, I would be inclined to take a different stance. But, as you've indicated, you are perfectly able to make the payments -- you just don't feel like it. Real estate fluctuates in value, just like any other asset. If a stock I bought drops in value, does the government come and bail me out? Of course not! What I find most problematic about your plan is that not only do you wish to breach your agreement, but you are also looking for ways to conceal your breach. Please think about this. Best of luck with your decision.
Get the cash you need to expand your business.  Free information. Call Now.  866-334-8705. Our goal: Helping small companies rebuild in this economy through private lending. We are looking for business owners that want to save money on their credit card processing or begin accepting credit cards. Grow your business now with a Merchant Cash Advance.  Funding of 100 - 300% of your monthly sales, no points or upfront fees. No fixed monthly payment.  Payment is automatically collected through credit card sales. We have partnered with several processors and other service providers to ensure the ability to offer Credit Card Processing with the lowest possible rates and fees for processing and funding in the industry. We also offer Gift Cards and Loyalty Programs to help you with repeat business. Call 866-334-8705 and mention Agent #22427 to speak to one of our knowledgeable representatives that can give you a quote today. http://agent.vendorsmerchantnetwork.com/22427 I'm aiming to buy in four and a half years... I'll have about $120k in savings between various accounts and be making $52k a year with no debt and no obligations... no kids, I'll have excellent credit (building it--I didn't want cards while paying off student loans) and still... I'll be lucky to be able to afford a 600 sq foot condo with a $300/mo HOA fee.   Fucking SF Bay Area. I can't even afford to live in a Section-8 complex right now. Seriously. What the bloody fucking fuck ($1,500/mo if you're not Section-8... they get discounts).   Thank goodness for my dad, he's the only reason I was able to pay off my student loans within two years of getting my current job and the only reason I am able to save so much.  Our system is seriously fucked. People making $44k a year should be able to afford an apartment within a hour commute of work in an area where they don't have to dodge bullets or fight rats.... Since this post was migrated from Parenting, my reply was in the context where it appeared to be misrepresenting facts to make a point. I've edited it to be more concise to my main point. In my opinion, the best way to save for your childs future is to get rid of as much of your own debt as possible. Starting today. For the average American, a car is 6-10%. Most people have at least a couple credit cards, ranging from 10-25% (no crap). College loans can be all over the map (5-15%) as can be signature (8-15%) or secured bank loans (4-8%). Try to stop living within your credit and live within your means. Yeah it will suck to not go to movies or shop for cute things at Kohl's, but only today.  First, incur no more debt. Then, the easiest way I found to pay things off is to use your tax returns and reduce your cable service (both potentially $Ks per year) to pay off a big debt like a car or student loan. You just gave yourself an immediate raise of whatever your payment is. If you think long term (we're talking about long-term savings for a childs college) there are things you can do to pay off debt and save money without having to take up a 2nd job... but you have to think in terms of years, not months. Is this kind of thing pie in the sky? Yes and no, but it takes a plan and diligence. For example, we have no TV service (internet only service redirected an additional $100/mo to the wifes lone credit card) and we used '12 taxes to pay off the last 4k on the car. We did the same thing on our van last year. It takes willpower to not cheat, but that's only really necessary for the first year-ish... well before that point you'll be used to the Atkins Diet on your wallet and will have no desire to cheat. It doesn't really hurt your quality of life (do you really NEED 5 HBO channels?) and it sets everyone up for success down the line. The moral of the story is that by paying down your debt today, you're taking steps to reduce long haul expenditures. A stable household economy is a tremendous foundation for raising children and can set you up to be more able to deal with the costs of higher ed. "Absent a pre-nup, it's a case of ""lawyer vs lawyer,"" you can't count on protecting what you came into the marriage with. In theory, what you propose sounds fair, but the reality of divorce is that everything is fair game. much depends on each spouse's earnings and impact of child-raising. For example, a woman who gives up time in a career may go after more than half, as she may be X years behind in her career path due to the choices made to stay home with the kids. I think each divorce is unique, not cookie cutter." Before we were married my wife financed a car at a terrible rate. I think it was around 20%. When trying to refinance it the remaining loan was much larger than the value of the car, so no one was interested in refinancing. I was able to do a balance transfer to a credit card around 10%. This did take on a bit of risk, which almost came up when the car was totaled in an accident. Fortunately the remaining balance was now less than the value of the car, otherwise I would have been stuck with a credit card payment and no vehicle. I would not be concerned about the impact to your credit rating.  You already have an excellent credit score, and the temporary change to your utilization will have minimal impact to your score. If you really need to make this $2500 purchase and you have the money in the bank to pay for it, I would not recommend borrowing this money.  Only put it on the credit card if you plan on paying it off in full without paying interest. Let me ask you this: Why do you want to keep this $2500 in the bank?  It certainly isn't earning you anything significant.  My guess is that you'd like to keep it there for an emergency.  Well, is this $2500 purchase an emergency?  If it is necessary, then spend the money.  If not, then save up the money until you have enough to make the purchase.  It doesn't make sense to keep money for an emergency in the bank, but then when one comes up, to leave the money in the bank and pay interest on your emergency purchase. If you make this emergency purchase and another emergency comes up, you can always (if necessary) borrow the money at that time.  It doesn't make sense to borrow money before you need it. That having been said, I would encourage you to build up your emergency fund so that you have enough money in there to handle things like this without completely depleting your savings account.  3 to 6 months of expenses is the general recommendation for your emergency fund.  Then if something unplanned comes up, you'll have the money in the bank without having to borrow and pay interest. "I saw where you said ""I thought of co-signing is if a portion of child/spousal support goes directly to the landlord. I asked the Child Support Services (who deduct money from my paycheck monthly to pay support to my ex) and they told me that they are not authorized to do this.""  I know going back to court isn't a pleasant thought, but from the looks of things, your suggestion is the only way to accomplish this. It's ridiculous for anyone to suggest you keep up your payments and cosign, yet the ex has no obligation to use that income to actually pay her rent. From what you've said, she sounds irresponsible and self-destructive.  As someone who has had bad tenants, I'd not go near her, even with a cosigner. It's just not worth the risk." Whatever you choose for a remedy (my first impulse is to suggest bankruptcy) you should protect your retirement plans.  These are immune from most collection actions, the exception being govt debts (e.g. taxes) and student loans.  The sad part is that the student loans won't go away except by paying them off.  Miss one payment and it will hound you for 10 years.  Bankruptcy will stop you from getting a home loan for only two years.  Unless you have the discipline to live like a monk for a decade it sounds like you're headed for a train wreck.  The kids will have to cut back to junior college or some other method of reducing costs and as hard as it sounds, don't cosign for any more student loans. Kids are more resilient than you think and they'll probably come up with their own solutions like scholarships, work study and off campus jobs.  I hate to keep beating the bankruptcy horse but at least that way you could still keep your house and car.  Otherwise you risk losing either or both from missed payments.  I actually hope that you can avoid bankruptcy so I suggest first you talk to a financial adviser or bankruptcy attorney to see if this is in fact right for you. But if it's just the shame of the scarlet letter B then consider that pride doesn't keep a roof over your head or food in your belly.