Ex-in-laws (3rd party creditors) want to foreclose on my condo

[eavesdropper]

[quote=frenchlambda] Yes I feel emotionally attached to the property but the reason I want to keep it is really the practical aspect. I think that it would be extremely disruptive to my daughter if I move. After all, that’s her house too. If I move, I will end up renting an 2-bdr apartment in the same area that would cost me probably around $1,500 month, more than what the mortgage would cost me. The place is close to my work, it has good schools around and everything about it is convenient for me. [/quote]

I’m going to refrain from responding to the remainder of your email, but feel compelled to address the issue you raise above.

I do see your point about your daughter, but unpleasant relations with your in-laws and ex-wife over money will prove to be MUCH more disruptive to your daughter than any move could be. There is a lot going on in this situation, and I’m sure that everyone’s emotions are running high. It sounds as though you have many reasons to be upset and angry, but I’m strongly advising you to work on letting it go. Otherwise, it WILL affect your daughter in a negative way. Newly-divorced parents think that they can keep their feelings to themselves, and that their children will not notice, but they are wrong.

If you can find a manageable way to refinance the property and pay off your in-laws, do so. BEFORE you withdraw the money from your 401K, be sure to (1) thoroughly check out tax/penalty information with IRS, and (2) work out a plan for repayment. If you cannot make payments on your CURRENT salary, do not borrow the money. Leaving a house voluntarily is a lot less traumatic than being forced out by foreclosure.

It will be much better for your daughter if you disengage yourself from all monetary obligations to your ex-in-laws. Bonne chance, et meilleurs vœux pour votre nouvelle vie.

[bearishgurl]

Good advice, Eaves.

[bearishgurl]

Good advice, Eaves.

[bearishgurl]

Good advice, Eaves.

[bearishgurl]

Good advice, Eaves.

[bearishgurl]

Good advice, Eaves.

[earlyretirement]

[quote=eavesdropper][quote=frenchlambda] Yes I feel emotionally attached to the property but the reason I want to keep it is really the practical aspect. I think that it would be extremely disruptive to my daughter if I move. After all, that’s her house too. If I move, I will end up renting an 2-bdr apartment in the same area that would cost me probably around $1,500 month, more than what the mortgage would cost me. The place is close to my work, it has good schools around and everything about it is convenient for me. [/quote]

I’m going to refrain from responding to the remainder of your email, but feel compelled to address the issue you raise above.

I do see your point about your daughter, but unpleasant relations with your in-laws and ex-wife over money will prove to be MUCH more disruptive to your daughter than any move could be. There is a lot going on in this situation, and I’m sure that everyone’s emotions are running high. It sounds as though you have many reasons to be upset and angry, but I’m strongly advising you to work on letting it go. Otherwise, it WILL affect your daughter in a negative way. Newly-divorced parents think that they can keep their feelings to themselves, and that their children will not notice, but they are wrong.

If you can find a manageable way to refinance the property and pay off your in-laws, do so. BEFORE you withdraw the money from your 401K, be sure to (1) thoroughly check out tax/penalty information with IRS, and (2) work out a plan for repayment. If you cannot make payments on your CURRENT salary, do not borrow the money. Leaving a house voluntarily is a lot less traumatic than being forced out by foreclosure.

It will be much better for your daughter if you disengage yourself from all monetary obligations to your ex-in-laws. Bonne chance, et meilleurs vœux pour votre nouvelle vie.[/quote]

GREAT advice! 🙂 I totally agree with it. It sounds like you have a handful with the divorce and having a child, etc. But I totally agree with eavesdropper that the best thing to do is “disengage yourself from all monetary obligations” from your in-laws as Eavesdropper wisely pointed out.

It sounds like you have a steady job now and can manage and afford the refinance. No one likes cashing out retirement savings or paying penalties but I think in this situation it’s the best thing. Besides, you’re not talking about huge sums of money on the amount you will need to cash out of your retirement.

Best to consult an accountant but see if your situation qualifies you for any hardship exemptions on the penalty amount.

http://www.irs.gov/retirement/article/0,,id=162416,00.html#2

It sounds like you didn’t want to get the loan from the in-laws but the point is that you did. That’s the only thing that matters now. Plus, the added fact that as a part of the terms of your divorce settlement was to refinance the mortgage which it sounds like you agreed with.

I can’t imagine what you’re going through. I didn’t know kids were involved but I agree with what eavesdropper said and move on from the situation.

It seems like it would be the healthiest moving forward for your daughter as well.

Good luck to you.

[earlyretirement]

[quote=eavesdropper][quote=frenchlambda] Yes I feel emotionally attached to the property but the reason I want to keep it is really the practical aspect. I think that it would be extremely disruptive to my daughter if I move. After all, that’s her house too. If I move, I will end up renting an 2-bdr apartment in the same area that would cost me probably around $1,500 month, more than what the mortgage would cost me. The place is close to my work, it has good schools around and everything about it is convenient for me. [/quote]

I’m going to refrain from responding to the remainder of your email, but feel compelled to address the issue you raise above.

I do see your point about your daughter, but unpleasant relations with your in-laws and ex-wife over money will prove to be MUCH more disruptive to your daughter than any move could be. There is a lot going on in this situation, and I’m sure that everyone’s emotions are running high. It sounds as though you have many reasons to be upset and angry, but I’m strongly advising you to work on letting it go. Otherwise, it WILL affect your daughter in a negative way. Newly-divorced parents think that they can keep their feelings to themselves, and that their children will not notice, but they are wrong.

If you can find a manageable way to refinance the property and pay off your in-laws, do so. BEFORE you withdraw the money from your 401K, be sure to (1) thoroughly check out tax/penalty information with IRS, and (2) work out a plan for repayment. If you cannot make payments on your CURRENT salary, do not borrow the money. Leaving a house voluntarily is a lot less traumatic than being forced out by foreclosure.

It will be much better for your daughter if you disengage yourself from all monetary obligations to your ex-in-laws. Bonne chance, et meilleurs vœux pour votre nouvelle vie.[/quote]

GREAT advice! 🙂 I totally agree with it. It sounds like you have a handful with the divorce and having a child, etc. But I totally agree with eavesdropper that the best thing to do is “disengage yourself from all monetary obligations” from your in-laws as Eavesdropper wisely pointed out.

It sounds like you have a steady job now and can manage and afford the refinance. No one likes cashing out retirement savings or paying penalties but I think in this situation it’s the best thing. Besides, you’re not talking about huge sums of money on the amount you will need to cash out of your retirement.

Best to consult an accountant but see if your situation qualifies you for any hardship exemptions on the penalty amount.

http://www.irs.gov/retirement/article/0,,id=162416,00.html#2

It sounds like you didn’t want to get the loan from the in-laws but the point is that you did. That’s the only thing that matters now. Plus, the added fact that as a part of the terms of your divorce settlement was to refinance the mortgage which it sounds like you agreed with.

I can’t imagine what you’re going through. I didn’t know kids were involved but I agree with what eavesdropper said and move on from the situation.

It seems like it would be the healthiest moving forward for your daughter as well.

Good luck to you.

[earlyretirement]

[quote=eavesdropper][quote=frenchlambda] Yes I feel emotionally attached to the property but the reason I want to keep it is really the practical aspect. I think that it would be extremely disruptive to my daughter if I move. After all, that’s her house too. If I move, I will end up renting an 2-bdr apartment in the same area that would cost me probably around $1,500 month, more than what the mortgage would cost me. The place is close to my work, it has good schools around and everything about it is convenient for me. [/quote]

I’m going to refrain from responding to the remainder of your email, but feel compelled to address the issue you raise above.

I do see your point about your daughter, but unpleasant relations with your in-laws and ex-wife over money will prove to be MUCH more disruptive to your daughter than any move could be. There is a lot going on in this situation, and I’m sure that everyone’s emotions are running high. It sounds as though you have many reasons to be upset and angry, but I’m strongly advising you to work on letting it go. Otherwise, it WILL affect your daughter in a negative way. Newly-divorced parents think that they can keep their feelings to themselves, and that their children will not notice, but they are wrong.

If you can find a manageable way to refinance the property and pay off your in-laws, do so. BEFORE you withdraw the money from your 401K, be sure to (1) thoroughly check out tax/penalty information with IRS, and (2) work out a plan for repayment. If you cannot make payments on your CURRENT salary, do not borrow the money. Leaving a house voluntarily is a lot less traumatic than being forced out by foreclosure.

It will be much better for your daughter if you disengage yourself from all monetary obligations to your ex-in-laws. Bonne chance, et meilleurs vœux pour votre nouvelle vie.[/quote]

GREAT advice! 🙂 I totally agree with it. It sounds like you have a handful with the divorce and having a child, etc. But I totally agree with eavesdropper that the best thing to do is “disengage yourself from all monetary obligations” from your in-laws as Eavesdropper wisely pointed out.

It sounds like you have a steady job now and can manage and afford the refinance. No one likes cashing out retirement savings or paying penalties but I think in this situation it’s the best thing. Besides, you’re not talking about huge sums of money on the amount you will need to cash out of your retirement.

Best to consult an accountant but see if your situation qualifies you for any hardship exemptions on the penalty amount.

http://www.irs.gov/retirement/article/0,,id=162416,00.html#2

It sounds like you didn’t want to get the loan from the in-laws but the point is that you did. That’s the only thing that matters now. Plus, the added fact that as a part of the terms of your divorce settlement was to refinance the mortgage which it sounds like you agreed with.

I can’t imagine what you’re going through. I didn’t know kids were involved but I agree with what eavesdropper said and move on from the situation.

It seems like it would be the healthiest moving forward for your daughter as well.

Good luck to you.

[earlyretirement]

[quote=eavesdropper][quote=frenchlambda] Yes I feel emotionally attached to the property but the reason I want to keep it is really the practical aspect. I think that it would be extremely disruptive to my daughter if I move. After all, that’s her house too. If I move, I will end up renting an 2-bdr apartment in the same area that would cost me probably around $1,500 month, more than what the mortgage would cost me. The place is close to my work, it has good schools around and everything about it is convenient for me. [/quote]

I’m going to refrain from responding to the remainder of your email, but feel compelled to address the issue you raise above.

I do see your point about your daughter, but unpleasant relations with your in-laws and ex-wife over money will prove to be MUCH more disruptive to your daughter than any move could be. There is a lot going on in this situation, and I’m sure that everyone’s emotions are running high. It sounds as though you have many reasons to be upset and angry, but I’m strongly advising you to work on letting it go. Otherwise, it WILL affect your daughter in a negative way. Newly-divorced parents think that they can keep their feelings to themselves, and that their children will not notice, but they are wrong.

If you can find a manageable way to refinance the property and pay off your in-laws, do so. BEFORE you withdraw the money from your 401K, be sure to (1) thoroughly check out tax/penalty information with IRS, and (2) work out a plan for repayment. If you cannot make payments on your CURRENT salary, do not borrow the money. Leaving a house voluntarily is a lot less traumatic than being forced out by foreclosure.

It will be much better for your daughter if you disengage yourself from all monetary obligations to your ex-in-laws. Bonne chance, et meilleurs vœux pour votre nouvelle vie.[/quote]

GREAT advice! 🙂 I totally agree with it. It sounds like you have a handful with the divorce and having a child, etc. But I totally agree with eavesdropper that the best thing to do is “disengage yourself from all monetary obligations” from your in-laws as Eavesdropper wisely pointed out.

It sounds like you have a steady job now and can manage and afford the refinance. No one likes cashing out retirement savings or paying penalties but I think in this situation it’s the best thing. Besides, you’re not talking about huge sums of money on the amount you will need to cash out of your retirement.

Best to consult an accountant but see if your situation qualifies you for any hardship exemptions on the penalty amount.

http://www.irs.gov/retirement/article/0,,id=162416,00.html#2

It sounds like you didn’t want to get the loan from the in-laws but the point is that you did. That’s the only thing that matters now. Plus, the added fact that as a part of the terms of your divorce settlement was to refinance the mortgage which it sounds like you agreed with.

I can’t imagine what you’re going through. I didn’t know kids were involved but I agree with what eavesdropper said and move on from the situation.

It seems like it would be the healthiest moving forward for your daughter as well.

Good luck to you.

[earlyretirement]

[quote=eavesdropper][quote=frenchlambda] Yes I feel emotionally attached to the property but the reason I want to keep it is really the practical aspect. I think that it would be extremely disruptive to my daughter if I move. After all, that’s her house too. If I move, I will end up renting an 2-bdr apartment in the same area that would cost me probably around $1,500 month, more than what the mortgage would cost me. The place is close to my work, it has good schools around and everything about it is convenient for me. [/quote]

I’m going to refrain from responding to the remainder of your email, but feel compelled to address the issue you raise above.

I do see your point about your daughter, but unpleasant relations with your in-laws and ex-wife over money will prove to be MUCH more disruptive to your daughter than any move could be. There is a lot going on in this situation, and I’m sure that everyone’s emotions are running high. It sounds as though you have many reasons to be upset and angry, but I’m strongly advising you to work on letting it go. Otherwise, it WILL affect your daughter in a negative way. Newly-divorced parents think that they can keep their feelings to themselves, and that their children will not notice, but they are wrong.

If you can find a manageable way to refinance the property and pay off your in-laws, do so. BEFORE you withdraw the money from your 401K, be sure to (1) thoroughly check out tax/penalty information with IRS, and (2) work out a plan for repayment. If you cannot make payments on your CURRENT salary, do not borrow the money. Leaving a house voluntarily is a lot less traumatic than being forced out by foreclosure.

It will be much better for your daughter if you disengage yourself from all monetary obligations to your ex-in-laws. Bonne chance, et meilleurs vœux pour votre nouvelle vie.[/quote]

GREAT advice! 🙂 I totally agree with it. It sounds like you have a handful with the divorce and having a child, etc. But I totally agree with eavesdropper that the best thing to do is “disengage yourself from all monetary obligations” from your in-laws as Eavesdropper wisely pointed out.

It sounds like you have a steady job now and can manage and afford the refinance. No one likes cashing out retirement savings or paying penalties but I think in this situation it’s the best thing. Besides, you’re not talking about huge sums of money on the amount you will need to cash out of your retirement.

Best to consult an accountant but see if your situation qualifies you for any hardship exemptions on the penalty amount.

http://www.irs.gov/retirement/article/0,,id=162416,00.html#2

It sounds like you didn’t want to get the loan from the in-laws but the point is that you did. That’s the only thing that matters now. Plus, the added fact that as a part of the terms of your divorce settlement was to refinance the mortgage which it sounds like you agreed with.

I can’t imagine what you’re going through. I didn’t know kids were involved but I agree with what eavesdropper said and move on from the situation.

It seems like it would be the healthiest moving forward for your daughter as well.

Good luck to you.

[ucodegen]

First things first:
[quote frenchlambda]- a few months ago, while my then wife and I were trying to reach an agreement, her parents freaked out about the loan they gave us. They hired an attorney who threatened me to take legal action against me if I refused to sign a deed of trust for the benefit of his clients.
– at this time, my wife was refusing to sign a “stipulation and order” that showed that I was entitled to some other reimbursement
– so we worked out a deal. I signed the deed of trust and my wife signed the “stipulation and order” document.[/quote]
This is where you screwed up. Did you have an attorney representing you at the time? If not, and considering that coercion/duress was used by their attorney (under threat of legal action but w/o legal representation), it could invalidate the deed of trust (signatures under coercion are often not enforceable – more so if the counter party is not represented by an attorney, even more so if the threat from the counter party or counter party’s attorney contains the implied — “if you get an attorney to check this, then we will definitely sue”). The reason why they threatened here is that they didn’t have a leg to stand on w/ respect to the loan. With the deed, they now do.
NOTE: It might have been useful to offset the loan owed to parents by the amounts under consideration under the “stipulation and order”, thereby reducing your payments and loan amount — and making it easier to refi the ex-inlaw portion. But now you may have to take the effort to make sure the “stipulation and order” is enforced.

What this signature did, was convert an unsecured loan into a secured loan. This is a huge benefit to your wife and parents. From what I am seeing so far, the loan still looks open-ended though, so they aren’t really able to foreclose. The note was not callable as was written, unless you also signed something that changed the loan into something callable.

Was the divorce proceedings done through court or arbitration? $13K sounds like court(but not drawn out). Was the “stipulation and order” part of the divorce agreement? If it was a court divorce proceedings AND was part of the agreement AND she then refused, she could be in contempt of court. What was in the “stipulation and order”?
[quote frenchlambda]I was nice enough to offer her shared child custody when my attorney recommended full custody for me.[/quote]
Should have listened to your attorney. Shared custody is hard enough when both parties are healthy and of fit mind. They are a nightmare if one is addicted, pathological or has revenge in mind. Until she is 100% clean for a period of time, it should have been visitation with supervision- for the sake of your daughter. Once she is 100% clean for a period of time, it is always possible to go back and amend to give her more rights/shared custody. It is hard to take back or re-establish custody once given though.

[quote frenchlambda]I think that it would be extremely disruptive to my daughter if I move.[/quote]
Moving is less disruptive to kids than it is to parents. Kids adapt a lot faster than their parents – just look how fast they can learn and pick up on new things.. ie technology.

[quote frenchlambda]I guess I will have no other choice than taking $30K from my 401(k). Is it even possible to do so? What are the costs associated with taking money from a 401(k)? Will I have to pay a huge tax next year?[/quote]
There is a way to use 401k money for real-estate purchases. I am not up 100% on how. Someone on the board may be. The problem may be that it can(maybe) only be used on original purchase, not refinance.
http://www.ehow.com/how_2075559_purchase-home-using-401k.html
http://www.forbes.com/2010/03/24/tapping-retirement-funds-ira-401k-personal-finance-house-downpayment.html
http://www.forbes.com/2009/04/04/ira-401k-hardship-personal-finance-retirement-ten-percent-penalty.html

And I am stressing again, when they bring an attorney to the table, make sure you have one too.. otherwise, you are the one getting screwed. Their attorney is only there to protect their rights, assets, wishes.. not yours. Considering that you tried to help their daughter and now they want the money immediately, this thing has already gone ‘adversarial’. No point in trying to ‘be nice’. Just deal with the facts.

For the IRA withdrawal, check w/ Accountant/IRS before committing.

[ucodegen]

First things first:
[quote frenchlambda]- a few months ago, while my then wife and I were trying to reach an agreement, her parents freaked out about the loan they gave us. They hired an attorney who threatened me to take legal action against me if I refused to sign a deed of trust for the benefit of his clients.
– at this time, my wife was refusing to sign a “stipulation and order” that showed that I was entitled to some other reimbursement
– so we worked out a deal. I signed the deed of trust and my wife signed the “stipulation and order” document.[/quote]
This is where you screwed up. Did you have an attorney representing you at the time? If not, and considering that coercion/duress was used by their attorney (under threat of legal action but w/o legal representation), it could invalidate the deed of trust (signatures under coercion are often not enforceable – more so if the counter party is not represented by an attorney, even more so if the threat from the counter party or counter party’s attorney contains the implied — “if you get an attorney to check this, then we will definitely sue”). The reason why they threatened here is that they didn’t have a leg to stand on w/ respect to the loan. With the deed, they now do.
NOTE: It might have been useful to offset the loan owed to parents by the amounts under consideration under the “stipulation and order”, thereby reducing your payments and loan amount — and making it easier to refi the ex-inlaw portion. But now you may have to take the effort to make sure the “stipulation and order” is enforced.

What this signature did, was convert an unsecured loan into a secured loan. This is a huge benefit to your wife and parents. From what I am seeing so far, the loan still looks open-ended though, so they aren’t really able to foreclose. The note was not callable as was written, unless you also signed something that changed the loan into something callable.

Was the divorce proceedings done through court or arbitration? $13K sounds like court(but not drawn out). Was the “stipulation and order” part of the divorce agreement? If it was a court divorce proceedings AND was part of the agreement AND she then refused, she could be in contempt of court. What was in the “stipulation and order”?
[quote frenchlambda]I was nice enough to offer her shared child custody when my attorney recommended full custody for me.[/quote]
Should have listened to your attorney. Shared custody is hard enough when both parties are healthy and of fit mind. They are a nightmare if one is addicted, pathological or has revenge in mind. Until she is 100% clean for a period of time, it should have been visitation with supervision- for the sake of your daughter. Once she is 100% clean for a period of time, it is always possible to go back and amend to give her more rights/shared custody. It is hard to take back or re-establish custody once given though.

[quote frenchlambda]I think that it would be extremely disruptive to my daughter if I move.[/quote]
Moving is less disruptive to kids than it is to parents. Kids adapt a lot faster than their parents – just look how fast they can learn and pick up on new things.. ie technology.

[quote frenchlambda]I guess I will have no other choice than taking $30K from my 401(k). Is it even possible to do so? What are the costs associated with taking money from a 401(k)? Will I have to pay a huge tax next year?[/quote]
There is a way to use 401k money for real-estate purchases. I am not up 100% on how. Someone on the board may be. The problem may be that it can(maybe) only be used on original purchase, not refinance.
http://www.ehow.com/how_2075559_purchase-home-using-401k.html
http://www.forbes.com/2010/03/24/tapping-retirement-funds-ira-401k-personal-finance-house-downpayment.html
http://www.forbes.com/2009/04/04/ira-401k-hardship-personal-finance-retirement-ten-percent-penalty.html

And I am stressing again, when they bring an attorney to the table, make sure you have one too.. otherwise, you are the one getting screwed. Their attorney is only there to protect their rights, assets, wishes.. not yours. Considering that you tried to help their daughter and now they want the money immediately, this thing has already gone ‘adversarial’. No point in trying to ‘be nice’. Just deal with the facts.

For the IRA withdrawal, check w/ Accountant/IRS before committing.

[ucodegen]

First things first:
[quote frenchlambda]- a few months ago, while my then wife and I were trying to reach an agreement, her parents freaked out about the loan they gave us. They hired an attorney who threatened me to take legal action against me if I refused to sign a deed of trust for the benefit of his clients.
– at this time, my wife was refusing to sign a “stipulation and order” that showed that I was entitled to some other reimbursement
– so we worked out a deal. I signed the deed of trust and my wife signed the “stipulation and order” document.[/quote]
This is where you screwed up. Did you have an attorney representing you at the time? If not, and considering that coercion/duress was used by their attorney (under threat of legal action but w/o legal representation), it could invalidate the deed of trust (signatures under coercion are often not enforceable – more so if the counter party is not represented by an attorney, even more so if the threat from the counter party or counter party’s attorney contains the implied — “if you get an attorney to check this, then we will definitely sue”). The reason why they threatened here is that they didn’t have a leg to stand on w/ respect to the loan. With the deed, they now do.
NOTE: It might have been useful to offset the loan owed to parents by the amounts under consideration under the “stipulation and order”, thereby reducing your payments and loan amount — and making it easier to refi the ex-inlaw portion. But now you may have to take the effort to make sure the “stipulation and order” is enforced.

What this signature did, was convert an unsecured loan into a secured loan. This is a huge benefit to your wife and parents. From what I am seeing so far, the loan still looks open-ended though, so they aren’t really able to foreclose. The note was not callable as was written, unless you also signed something that changed the loan into something callable.

Was the divorce proceedings done through court or arbitration? $13K sounds like court(but not drawn out). Was the “stipulation and order” part of the divorce agreement? If it was a court divorce proceedings AND was part of the agreement AND she then refused, she could be in contempt of court. What was in the “stipulation and order”?
[quote frenchlambda]I was nice enough to offer her shared child custody when my attorney recommended full custody for me.[/quote]
Should have listened to your attorney. Shared custody is hard enough when both parties are healthy and of fit mind. They are a nightmare if one is addicted, pathological or has revenge in mind. Until she is 100% clean for a period of time, it should have been visitation with supervision- for the sake of your daughter. Once she is 100% clean for a period of time, it is always possible to go back and amend to give her more rights/shared custody. It is hard to take back or re-establish custody once given though.

[quote frenchlambda]I think that it would be extremely disruptive to my daughter if I move.[/quote]
Moving is less disruptive to kids than it is to parents. Kids adapt a lot faster than their parents – just look how fast they can learn and pick up on new things.. ie technology.

[quote frenchlambda]I guess I will have no other choice than taking $30K from my 401(k). Is it even possible to do so? What are the costs associated with taking money from a 401(k)? Will I have to pay a huge tax next year?[/quote]
There is a way to use 401k money for real-estate purchases. I am not up 100% on how. Someone on the board may be. The problem may be that it can(maybe) only be used on original purchase, not refinance.
http://www.ehow.com/how_2075559_purchase-home-using-401k.html
http://www.forbes.com/2010/03/24/tapping-retirement-funds-ira-401k-personal-finance-house-downpayment.html
http://www.forbes.com/2009/04/04/ira-401k-hardship-personal-finance-retirement-ten-percent-penalty.html

And I am stressing again, when they bring an attorney to the table, make sure you have one too.. otherwise, you are the one getting screwed. Their attorney is only there to protect their rights, assets, wishes.. not yours. Considering that you tried to help their daughter and now they want the money immediately, this thing has already gone ‘adversarial’. No point in trying to ‘be nice’. Just deal with the facts.

For the IRA withdrawal, check w/ Accountant/IRS before committing.

[ucodegen]

First things first:
[quote frenchlambda]- a few months ago, while my then wife and I were trying to reach an agreement, her parents freaked out about the loan they gave us. They hired an attorney who threatened me to take legal action against me if I refused to sign a deed of trust for the benefit of his clients.
– at this time, my wife was refusing to sign a “stipulation and order” that showed that I was entitled to some other reimbursement
– so we worked out a deal. I signed the deed of trust and my wife signed the “stipulation and order” document.[/quote]
This is where you screwed up. Did you have an attorney representing you at the time? If not, and considering that coercion/duress was used by their attorney (under threat of legal action but w/o legal representation), it could invalidate the deed of trust (signatures under coercion are often not enforceable – more so if the counter party is not represented by an attorney, even more so if the threat from the counter party or counter party’s attorney contains the implied — “if you get an attorney to check this, then we will definitely sue”). The reason why they threatened here is that they didn’t have a leg to stand on w/ respect to the loan. With the deed, they now do.
NOTE: It might have been useful to offset the loan owed to parents by the amounts under consideration under the “stipulation and order”, thereby reducing your payments and loan amount — and making it easier to refi the ex-inlaw portion. But now you may have to take the effort to make sure the “stipulation and order” is enforced.

What this signature did, was convert an unsecured loan into a secured loan. This is a huge benefit to your wife and parents. From what I am seeing so far, the loan still looks open-ended though, so they aren’t really able to foreclose. The note was not callable as was written, unless you also signed something that changed the loan into something callable.

Was the divorce proceedings done through court or arbitration? $13K sounds like court(but not drawn out). Was the “stipulation and order” part of the divorce agreement? If it was a court divorce proceedings AND was part of the agreement AND she then refused, she could be in contempt of court. What was in the “stipulation and order”?
[quote frenchlambda]I was nice enough to offer her shared child custody when my attorney recommended full custody for me.[/quote]
Should have listened to your attorney. Shared custody is hard enough when both parties are healthy and of fit mind. They are a nightmare if one is addicted, pathological or has revenge in mind. Until she is 100% clean for a period of time, it should have been visitation with supervision- for the sake of your daughter. Once she is 100% clean for a period of time, it is always possible to go back and amend to give her more rights/shared custody. It is hard to take back or re-establish custody once given though.

[quote frenchlambda]I think that it would be extremely disruptive to my daughter if I move.[/quote]
Moving is less disruptive to kids than it is to parents. Kids adapt a lot faster than their parents – just look how fast they can learn and pick up on new things.. ie technology.

[quote frenchlambda]I guess I will have no other choice than taking $30K from my 401(k). Is it even possible to do so? What are the costs associated with taking money from a 401(k)? Will I have to pay a huge tax next year?[/quote]
There is a way to use 401k money for real-estate purchases. I am not up 100% on how. Someone on the board may be. The problem may be that it can(maybe) only be used on original purchase, not refinance.
http://www.ehow.com/how_2075559_purchase-home-using-401k.html
http://www.forbes.com/2010/03/24/tapping-retirement-funds-ira-401k-personal-finance-house-downpayment.html
http://www.forbes.com/2009/04/04/ira-401k-hardship-personal-finance-retirement-ten-percent-penalty.html

And I am stressing again, when they bring an attorney to the table, make sure you have one too.. otherwise, you are the one getting screwed. Their attorney is only there to protect their rights, assets, wishes.. not yours. Considering that you tried to help their daughter and now they want the money immediately, this thing has already gone ‘adversarial’. No point in trying to ‘be nice’. Just deal with the facts.

For the IRA withdrawal, check w/ Accountant/IRS before committing.

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