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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 07-10-2010, 02:10 PM
lyds lyds is offline
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Default Equalization Payment Calculation Question

Hi there, quick and probably stupid question, but just trying to make sure we don't run into problems later. We're amiacable, working out the agreement ourselves and don't have much to fight over and can't afford lawyers.

My question is about adding up my ex's net worth. His separation net worth is 6300.00 and his marriage net worth was -5500.00. In subtracting the negative marriage net worth from the positive separation net worth, does it become a positive? 6300 - (-5000) = 11800 or is it 700.00?

Also, what if I find out he lied about assets or liabilities on the agreement - nothing would surprise me anymore and I just want this whole thing over, but am trying not to rush the agreement. If he comes forward later 'remembering' a debt (because really, is he going to tell me about an asset he remembered?) am I on the hook after we've signed for an additional equalization amount? I have a suspicion there's one out there he's not fessing up to with a correct amount? Can he claim this later, or once signed is he stuck with what he agreed with?

Thanks in advance.
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Old 07-10-2010, 04:01 PM
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I'm not sure what you mean by "marriage net worh", do you mean on date of marriage? If I understand your numbers correctly, he had an effective 0 on marriage date, and 6300 on separation, so you use 6300.

On date of marriage, subtract his debt from his assets. If this number is a negative, just use 0. You do not carry over a negative, you are not equalizing debt, just net asset.

On date of separation, subtract debt from asset. If this number is a negative, just use 0 as above.

Subtract net worth on date of marriage, from net worth on date of separation. If the number is a negative, use 0. Again, you do not equalize debt.

Now do the same for yourself. Subtract your net from his net. (or the reverse, depending on the larger figure.) Do not equalize debt. (Sorry about repeating myself, but this is where many people go wrong.) The difference between the two is now divided by 2, and that is the equalization payment.

As far as deception goes, if he lies about his assets this can be used to overturn a separation agreement, it is fraud. However my lawyer informed me that the courts would not overturn an agreement over "small amounts", it had to be "significant". In my case, my ex neglected to add $20-25k of assets. My lawyer said that $25k was not considered significant. This surprised me, but I suppose compared to other people's assets it is nothing. In my case, I would have needed the all the financials redone, new statements provided, new calculations, and at the pace this had been done before it would have at least 6 months. Subtracting her debt from that would have meant a difference of a couple thousand, so I decided to just go with the numbers given and sign the settlement.

In the same way, for you, if it is a couple of thousand, compare this to amount you spend on lawyers if this stops being agreeable between you two. It's probably not worth it.
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Old 07-10-2010, 09:36 PM
lyds lyds is offline
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Thank you so much for your reply and for repeating yourself because obviously that was a mistake I was about to make - equalizing the debt! The formula I found for calculation on another website had it laid out perfectly, except neglected to advise it is a zero if dips to a negative number. Should have done more homework.

I appreciate the feedback and definitely agree it would probably not be worth the legal fees to recoup a small amount if he lied about something. Thanks again!
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Old 07-11-2010, 01:47 AM
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Your numbers are far too low for it to even matter.
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Old 07-12-2010, 02:08 PM
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Sorry to bug, but another quick question. If we're not equalizing debts, what if a debt was the same at date of marriage as at date of separation. For example, a 10,000 line of credit that was never paid off - went up to 20,000 during marriage, but back down to 10,00 at time of separation?

Would that be included as a debt at separation?

Thanks all.
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Old 07-12-2010, 06:09 PM
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Found my response. This forum's great!
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Old 07-13-2010, 12:05 AM
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Quote:
Originally Posted by lyds View Post
...If he comes forward later 'remembering' a debt (because really, is he going to tell me about an asset he remembered?) am I on the hook after we've signed for an additional equalization amount? I have a suspicion there's one out there he's not fessing up to with a correct amount? Can he claim this later, or once signed is he stuck with what he agreed with?
You are morally on the hook - if a debt of the marriage comes up that was not dealt with, then it should be split 50/50 - regardless of who signed what - at least that is the honest and rightful thing to do. 'Sticking' him with the newly discovered debt would only be recommended people who lack moral character (such as my ex and her lawyer )

Last edited by billm; 07-13-2010 at 12:08 AM.
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Old 07-13-2010, 12:21 AM
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Quote:
Originally Posted by billm View Post
You are morally on the hook - if a debt of the marriage comes up that was not dealt with, then it should be split 50/50 - regardless of who signed what - at least that is the honest and rightful thing to do. 'Sticking' him with the newly discovered debt would only be recommended people who lack moral character (such as my ex and her lawyer )
I hear ya Bill. Being stuck with an additional Blackberry Contract was no fun.
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