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

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  #1  
Old 01-30-2019, 02:11 PM
menchia menchia is offline
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Default Period allowed for Equalization payment

I'm just wondering, how much time can be allowed to come up with the owed equalization payment after settlement?




My X to be and I are working on a separation agreement, and we are now looking at net property equalization. In the end, I will owe her a large equalization payment that I cannot come up with due to lack of liquid assets or/and cash. We both like to know how much time is usually allowed in situation like ours to pay equalization. Any feedback will be greatly appreciated.
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Old 01-30-2019, 06:42 PM
standing on the sidelines standing on the sidelines is offline
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Quote:
Originally Posted by menchia View Post
I'm just wondering, how much time can be allowed to come up with the owed equalization payment after settlement?




My X to be and I are working on a separation agreement, and we are now looking at net property equalization. In the end, I will owe her a large equalization payment that I cannot come up with due to lack of liquid assets or/and cash. We both like to know how much time is usually allowed in situation like ours to pay equalization. Any feedback will be greatly appreciated.
I am no lawyer but I am thinking as long as you and the ex agree on a payment plan then you are good.
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Old 02-03-2019, 07:53 AM
tilt tilt is offline
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I know it is a maximum of ten years but I have been unable to find the relevant Rule. But that is ten years of payments, not delaying the entire payment. And interest accuse from the date it is agreed. As with everything, the reasonableness test prevails - it will most likely need to be faster than you want but slower than the other party wants.
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Old 02-03-2019, 08:53 AM
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I personally believe that sooner, rather than later, is the optimum way to handle this. Banks are in the business of lending. If someone can't scratch together available money then perhaps a personal loan or second mortgage is in order? I don't think it is fair for one party to put their plans on hold. Actually, I think it is unreasonable to expect one party to finance the other.

3 months to arrange financing seems more than reasonable to me. In some instances courts would rule a shorter term. While going through separation process it is not like both parties didn't know the time would come when large money would have to be paid... they have had lots of time to get things organized.
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Old 02-03-2019, 09:50 AM
denbigh denbigh is offline
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If there is no cash, other ways it can be done is by the value in a home, selling the home and the value in a pension
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Old 02-04-2019, 03:07 PM
menchia menchia is offline
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Thank you all for your replies.
I do agree with Arabian that it will not be fair for the other party to wait for too long to get the equalization payment. That being said, My x to be and I are in very good terms, and she's very understanding of our situation. She's willing to give me sometime to come up with the money, in consideration of the fact that it was me who worked very hard (while she was going to grad school for her Ph.D.) to pay off the entire mortgage and put in a significant amount of money in our kids RESP. She will be getting the house, and I will still owe her a significant amount of money. I will be giving her a lump sum payments spread over a period of time; I just do not know over what period of time we should agree to pay off the entire equalization. I do not have equity to borrow against (she has the house); I do not have any other significant savings/investment (other than the off limit RESP) to pay her from nor any significant amount in my current bank account. All the money I made went to paying off the mortgage and saving for my kids education.
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Old 02-05-2019, 08:29 AM
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What asset do you have that is causing you to owe this equalization payment?
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Old 02-05-2019, 12:38 PM
menchia menchia is offline
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Quote:
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What asset do you have that is causing you to owe this equalization payment?
The culprit is my huge pension. I've been working for long time now, and my salary is high. My STBX did not have pension nor any significant assets; she was kind of a professional student. The result is I have tremendous asset (both pension and half of house value) and she has insignificant assets.
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Old 02-05-2019, 01:39 PM
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Why not offer to split the pension at source, or at least part of the pension so that you do not have to come up with the cash?

For example, if you owe $30k, you can get 30k paid out from your pension. It doesn't have to be half or nothing.
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Old 02-06-2019, 01:00 PM
menchia menchia is offline
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Quote:
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Why not offer to split the pension at source, or at least part of the pension so that you do not have to come up with the cash?

For example, if you owe $30k, you can get 30k paid out from your pension. It doesn't have to be half or nothing.
I would've done that if it was not for the fact that I'm only few years away from retirement (less than 3years). Therefore, I would rather endure the hardship for short time period and preserve the full value of my pension for when I retire.
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