I Want My Ex To Drain Their 401(k) To Pay Child Support

Summary

Podcast Summary: The Ramsey Show Highlights – "I Want My Ex To Drain Their 401(k) To Pay Child Support"

Release Date: March 11, 2025
Host: Ramsey Network
Episode Title: I Want My Ex To Drain Their 401(k) To Pay Child Support

---

1. Introduction to Kathleen's Situation

In this episode of The Ramsey Show Highlights, Kathleen reaches out with a distressing financial predicament. Her ex-husband has been unable to maintain steady employment due to health issues and has defaulted on alimony and child support payments for five months. His sole assets include a $250,000 401(k) and minimal equity in their former marital home. Kathleen is contemplating whether it's equitable to request that he liquidate a portion of his 401(k) to fulfill his familial obligations.

Notable Quote:
"I want him to cash out some of his 401k to pay his responsibility." — Kathleen [00:02]

---

2. Dave Ramsey's Initial Response: Assessing the Fairness

Dave Ramsey empathizes with Kathleen's situation, acknowledging the complexity and emotional strain involved. He challenges the notion of "fairness," suggesting that focusing on fairness might not yield the most effective solution.

Notable Quote:
"Fair is that word is stuck with me. I'm like, is it fair?" — Kathleen [01:39]
"The wrong answer. It's the wrong question." — Dave Ramsey [01:43]

Ramsey emphasizes that asking whether it's fair may distract from finding what is necessary to support Kathleen and her children adequately.

---

3. Exploring Legal and Financial Options

Ramsey delves into the legal avenues Kathleen might pursue. He recommends consulting with an attorney to explore the possibility of garnishing the ex-husband's 401(k). However, he cautions that this process is fraught with challenges, especially given the ex-husband's health and potential bankruptcy threats.

Notable Quotes:
"You can contact your attorney and you can say, hey, I want him to forego his stake in the equity of this house." — Dave Ramsey [03:20]
"I think you're grasping at straws here." — Dave Ramsey [03:49]

Kathleen expresses concern that her ex-husband may declare bankruptcy to shield his assets, leaving her with limited recourse.

---

4. Impact on the Children and Long-Term Considerations

The welfare of Kathleen's children is a central theme in the discussion. Ramsey points out that extracting funds from the ex-husband's 401(k) might provide immediate relief but could leave him unable to support his children in the future if his health deteriorates further.

Notable Quotes:
"Are they going to be propping him up in the future?" — Dave Ramsey [01:06]
"I feel like I'm asking my family for help to take care of his children." — Kathleen [06:50]

Kathleen acknowledges that she is currently dependent on family support while pursuing her education but is determined to achieve financial independence.

---

5. Examining Alternatives and Sustainable Solutions

Ramsey advises Kathleen to explore all legal options before considering garnishing the 401(k). He suggests assessing whether immediate financial sacrifices, such as pausing her education to take on additional work, might provide a more sustainable solution in the short term.

Notable Quotes:
"I think we need to figure out how to make Kathleen's life sustainable without the outside help." — Unknown Speaker [07:21]
"You might need to pause going to school." — Dave Ramsey [07:29]

Kathleen shares her commitment to continuing her education in radiology technology but recognizes the immediate financial pressures that could necessitate a temporary shift in her plans.

---

6. Final Recommendations and Conclusion

In concluding the conversation, Ramsey reiterates the importance of legal consultation to navigate the complexities of Utah's laws regarding asset garnishment. He underscores the necessity of prioritizing the immediate needs of Kathleen and her children while formulating a long-term financial strategy.

Notable Quotes:
"You need to get with an attorney there." — Dave Ramsey [08:06]
"They might have a different option." — Unknown Speaker [06:05]

Kathleen remains resolute in her desire to repay her sister for the support she's receiving and to secure a stable future for her children.

---

Key Takeaways:

• Legal Consultation is Crucial: Kathleen should seek advice from a qualified attorney to understand her rights and the feasibility of garnishing her ex-husband's 401(k).

• Assessing Immediate Needs vs. Long-Term Stability: Balancing short-term financial relief with long-term sustainability is essential, potentially requiring temporary adjustments to personal goals.

• Children's Welfare Remains Paramount: Decisions should prioritize the well-being and support of her children, ensuring their needs are met both now and in the future.

• Exploring All Options Before Asset Liquidation: Exhausting all legal and financial avenues can prevent unnecessary depletion of her ex-husband's retirement funds, which could have lasting implications.

---

By addressing Kathleen's situation with empathy and practicality, The Ramsey Show Highlights provides valuable insights into managing complex financial and familial challenges.

Transcript

[Kathleen]

Brought to you by Y Refi. Refinance your defaulted private student loans [e-mail] Ramsey so my husband. My ex husband has not been able to hold down a job due to his health, and he has not paid alimony or child support in five months. His only assets are his 401k and a little bit of the equity in. In the house that I got in the divorce that he gets that equity when I refinance when I finish school. So I'm wondering if it's fair to ask him to cash out some of his 401k to pay his responsibility. I know there's huge punishments, but he's working on disability, and that can take a long time. But he's got no other assets to feed his kids.

[Dave Ramsey]

Sh. What a mess. Because, I mean, at the end of the day, it's gonna. It's gonna fall on his kids on the back end, right?

[Kathleen]

Yeah, Right. Like, I'd rather he, you know, keep his kids alive now than. I don't know. Well.

[Dave Ramsey]

Well, I mean, no, but they're gonna. They're gonna be propping him up right now. Are they going to be propping him up in the. I mean, in the future? If he cashes it out, then he's gonna be calling them when he's old and can't work.

[Kathleen]

Yeah.

[Dave Ramsey]

So let me ask about your situation. Are you unable to. To support them right now without his check?

[Kathleen]

I'm getting some financial support from my family, but I'm going through school. I've still got years to go before I can have any training that can pay anything more than fast food.

[Dave Ramsey]

Okay.

[Unknown]

I feel like fair is that. That word is stuck with me. I'm like, is it fair?

[Dave Ramsey]

The wrong answer. It's the wrong question. Um, I.

[Unknown]

It's more like what is necessary to keep the roof over our heads and keep the kids fed and keep the basics here. I wouldn't use it as a punishment, and I don't think you are. You sound like a lovely person.

[Dave Ramsey]

Is he for real hurt, or is he trying to end around not having to pay?

[Kathleen]

No, no, I believe it's genuine. He can't work.

[Dave Ramsey]

Okay, so let's take the alimony piece off because that's. That's. That's a third rail right now. Let's pretend y'all are still married. And I know that's a big stretch. Okay. Your husband, who's working in your home gets hurt, and he can't make any more money. Y'all have to have some hard conversations about the house you live in. And you think I'm not going to disrupt the kids lives. The kids lives are already really disrupted. I need to go to school right this minute so that I can finally get a degree, so I can finally get to earning some real money, so I can take care of everybody long term. That makes sense. Unless you can't afford to do it right this second.

[Kathleen]

So our housing that we refinanced, this house when it was at the bottom of the interest. My interest rate is 2.6. My mortgage is $1,000. Okay, I can't rent a studio apartment in Utah for under $1,000.

[Dave Ramsey]

I got you. I get it.

[Kathleen]

Financial sense means that the kids and I stay here. If I was still married to him, we would keep this house. If we were still married, I would ask him to petition some kind of hardship to get into his 401k. His parents are paying his rent. I guess. My parents are. My parents are paying my mortgage.

[Dave Ramsey]

Yeah, I mean, I mean, I mean you can, you can contact your attorney and you can say, hey, I want him to forego his, his stake in the equity of this house that didn't put cash in your pocket.

[Kathleen]

He needs to do a bankruptcy because of his, his credit card debt and since the divorce. And so he's threatening that he needs a bankruptcy. And I'm worried that this is an asset on his. In his name.

[Dave Ramsey]

I'm gonna be honest with you. I think you're grasping at straws here. Okay, You. He owes you money. The bank says he does. Morally, he owes you money. He doesn't have any. How much is in this mystical 401 that you, that you think he can give you?

[Kathleen]

He has $250,000 in it.

[Dave Ramsey]

And how old is he? He's 42 years old and he's done working. He's going to have to fight with disability forever.

[Kathleen]

He's going to have to fight to get on disability. He hopes that he can rejoin the workforce someday, but based on his last 10 years of health, I don't see how it's possible he's hit an early dementia.

[Dave Ramsey]

Okay, so, I mean, that's the question I'll ask you. I mean, I guess you can. What's he going to do besides call your kids and ask for money?

[Kathleen]

I just feel like I'm asking my family for help to take care of his children.

[Dave Ramsey]

They're your children too though.

[Kathleen]

Yeah, no, they are. And I have a plan. I'm getting through school as quickly as I can. I'm selling my blood money No, I.

[Dave Ramsey]

Mean, I know everybody's working hard. I think there's just a global situation here, which is a guy's hurt, he can't work and we don't like him, we're mad at him, he blew up our life. All those things. Fill in the blank. The divorce and all that. He didn't have it, but I mean.

[Kathleen]

Doesn'T he have it? Can't he get into that 401k? Isn't it better to use it now?

[Unknown]

Then when?

[Dave Ramsey]

Then when? When he's 65 and he has zero nothing.

[Kathleen]

I don't see him living till he's.

[Unknown]

65. Who's the beneficiary on the 401k?

[Kathleen]

I don't know if he switched it over to his new wife and his kids, but I have a life insurance on him that I kept from our marriage.

[Unknown]

Okay. What's the policy value?

[Kathleen]

His is 500,000.

[Unknown]

And you're the beneficiary?

[Kathleen]

I am.

[Dave Ramsey]

Okay, here's the deal. I don't know enough to know Utah law. I would go sit down with somebody and even see if you even have a claim to it. I don't even know if you have a claim to it.

[Unknown]

My gut says if you, the attorney, the courts, they're going to say, hey, this is a last ditch thing that we would need to approve in order to garnish his retirement to make this happen. They're going to explore every other option and they may end up where you are going. This is all this guy has, and here's how much we're gonna garnish to make this work. But he's broke. And so we can't just rob his entire retirement and just give it to you. They might have a different option.

[Dave Ramsey]

So we have a guy who's very unhealthy, has been. He's got early onset dementia, he's got an. He's unable to work, he's trying to piece together Social Security and piece together disability and maybe you can find a judge that will force him to cash out part of his 401 and take the 35 or 40% penalty, whatever he's gonna have to pay and give you the other P of it.

[Kathleen]

Is it fair if I, because my sister's supporting me and I'd like to pay her back someday. Is it fair to say, hey, if you forego the equity that I owe you, then you can not pay me the child support?

[Dave Ramsey]

Yeah. That if I'm you, that's the best.

[Unknown]

Solution based on what you've told us. And I think if you went to the courts and an attorney, they'd probably tell you something similar is. Let's explore that before we garnish his retirement.

[Dave Ramsey]

But that doesn't put cash in your pocket.

[Kathleen]

No, but I mean, my sister, she can. She can float me, but not forever.

[Unknown]

I think we need to figure out how to make Kathleen's life sustainable without the outside help. And that might take some sacrifice in the short term.

[Dave Ramsey]

You might need to pause going to school. What are you. What are you going to school for?

[Kathleen]

I'm going for radiology technology.

[Dave Ramsey]

Okay. It. It may be that you can't afford to do that right now and you have to go work three or four jobs and it's an awful economic trap that single moms find themselves in. And I know that sounds like two steps back, and I don't want to. I just don't think anybody's in a situation to do anything that they want to do right now. I think we're in a. We have. We have to do some different things. You can get with a lawyer and try to go get. Do what you got to do. I don't know what the laws are, so you need to get with an attorney there. I would be. I'd want to look in the mirror first.

[Kathleen]

Why Refi Refinances Delinquent Private Student Loans for Struggling borrowers. Learn more at YR R E F y Com Ramsay.