Kim K and Kris Humphries Annulment is the Sticking Point

Kim Kardashian and Kris Humphries are both willing to end their marriage with an annulment, but each is insisting that the other confess to fraud -- and that's what is holding up their settlement.

Sources connected to the former couple tell TMZ ... Kim would be happy to annul the marriage, if Kris will admit he defrauded her by promising to live with her in Hollywood and then demanding that she move to Minnesota -- something we told you about last October.

As we first reported, Kris wants Kim to admit fraud -- that she never had any intention of making this a real marriage ... something Kim has adamantly denied.

We're told Kim will open the vault and spend anything it takes to win this case if Kris insists that she confesses fraud.

As for money ... we've already told you Kris is demanding $7 million from Kim -- something Kim thinks is absurd since he MADE money off the wedding and the reality show PLUS they have a prenup which gives Kris a big fat zero.