HOW THE ECONOMIC CRISIS IMPACTS DIVORCE, CHILD SUPPORT, ALIMONY, EQUITABLE DISTRIBUTION OF PROPERTY AND DEBT

        The main obligation of the Courts and for attorneys is to obtain a fair result.  As the economic downturn continues, the Courts are having to make rulings to accommodate job losses, losses of assets, such as stocks, bonds, IRAs, and other financial instruments as well as the devaluation of the marital home and increase of marital debt.  A recent issue is responsibility for the shortfall if the house is worth less than the outstanding mortgage.  If one party wants to keep the house, a refinance may not be possible.    How can the other spouse be relieved of the mortgage obligation?  In today’s economic climate, this may not be possible and a short sale may be required through negotiation with the bank. 

            The standard for modification of alimony and support has been “permanent substantial change of circumstances.”  The question is how long does one have to be unemployed for it to be considered permanent?  A loss of a job is a substantial change in circumstance.  However, temporary unemployment is not a basis for modification of support.  The Court will look at the needs of the supported party and balance it against the effort of the supporting spouse to get another job.

            The amount of support can be changed by consent or by going into Court on an application.  Consent is ordinarily difficult to obtain because the supported spouse likely does not want the support reduced and will oppose it.  However, if it is a viable case then there is likelihood of modification.  Mediation is an excellent alternative at this time to work towards consent.  Frequently, even if one makes an application for modification or enforcement, the Court will initially order an Early Settlement Panel or mediation.  Why spend on counsel fees on an application which will result in mediation, if you can go there directly.

            If one goes to Court, it is very important that the obligor show proof of a very active, long and intense job search in order to convince the Court that support should be modified because of inability to find a job.  Just a job loss due to recession is not enough.  You must prove what you are doing to get back to the same earning level.

            It is important for the unemployed person to have a current resume.  It is necessary to keep detailed records of conversations with employers’ interviews, records of outcomes of interviews, offers, reasons why an offer was not accepted.  Just sending dozens of cold mailings to lists of employers on the Internet is not enough.  The obligor should check and document local papers with want ads, document job leads, interviews and outcomes.

            The Courts, at this time, are not granting modification motions easily.  The payor must first establish several months of diligent efforts to find work at comparable pay.  The Courts will also look to see if there are other assets from which support can be paid temporarily.  The Court may also impute income to a payor if he/she finds a job at pay much lower than before.

            Thus, it is certainly not easy to get support lowered but it can be done under the appropriate circumstances.  The more information the client can give the lawyer to prove a diligent job search, the greater the chance that a temporary modification may be granted.

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