So you, along with millions of Americans, have lost your job or you have been furloughed and you are waiting for your modest unemployment to kick in. How do you pay your most basic expenses even when you receive your one-time CARES Act payment in the mail? And how can you pay your child support or spousal support during this traumatic time? There is a likelihood that you simply can not make those payments. What do you do?
The current pandemic has created, and will continue to create, unique economic situations that will greatly affect issues such as child support, spousal support and the division of marital assets for parties who are separating, are in various stages of a divorce and/or who are already divorced. Child support is also a concern for parties who were never married but share a child in common. We anticipate that the courts will be inundated with applications by payors who are simply unable to meet their obligations in our present economic environment or by payees eager to address these issues before the situation may become even worse.
Confronting this new reality, it is far preferable for the parties themselves to work cooperatively to honestly deal with their finances and to make every effort to reach an amicable resolution rather than to rush into court. It is also simply not possible to obtain immediate relief at this point because the courts are closed to all requests for judicial relief except for those applications the courts deem to be emergencies. Making every possible effort to resolve support issues, either between the parties or with the assistance of counsel, will not only conserve precious limited resources, but would also alleviate additional stress during the current health crisis.
For those parties who have not yet reached an agreement or obtained a court order establishing a child support or spousal support award, an interim arrangement should be negotiated and put in place until the COVID-19 situation resolves. This would obviate the need to seek emergency court intervention even when the courts are available to hear those applications. It is likely that parties’ financial circumstances will continue to be unpredictable for the foreseeable future and that people who are stretching their dollars may well be doing that for many months to come.
For payors of established support orders, it is important to understand that unless the situation is dire, a court, in any event, will not downwardly modify a support obligation without proof of a substantial change in circumstances. The reality is that a court will expect a payor to continue to comply with his/her obligations unless or until the court issues an order modifying those obligations. The payor will have to demonstrate to the court that the reduction in earnings is involuntary and that he/she has made every effort to mitigate that loss of income by locating other employment or making a serious effort to search for employment. Unfortunately, there is no quick fix to the situation, and even when the issue is brought to the court for resolution, the process can be extremely time-consuming and can take months before there is a resolution. The current slowdown in court functions will only serve to further delay these types of proceedings. Obviously, then, it is critical that parties first attempt to resolve the issue between themselves or with the assistance of counsel who can guide them.
Counsel may be most helpful in this instance because they are familiar with the law and how courts operate when confronted with a request for a downward modification. For example, as it relates to child support, the Child Support Standards Act provides for a modification of the payment of child support due to certain reductions of income. Even a temporary reduction in child support agreed upon by the parties and set forth in a brief modification agreement might alleviate the additional burden on the payor so that he/she is not in violation of a court order or an agreement while ensuring that the recipient parent receives some child support. Thus, a payor can avoid accruing arrears that he/she may never be able to pay.
With dramatically reduced resources, how does a payor parent continue to pay for add on expenses such as camp, tutoring and the like when he/she cannot afford to comply with basic child support obligations because of a reduction in income? Or in another possible situation, how are increased childcare costs shared now that schools have been closed?
In a divorce action, the substantial recent drop in the stock and bond markets will likely result in a significant reduction in marital assets, in addition to any losses in income. Parties should recognize that each may receive appreciably less at the conclusion of their divorce matter than they might have received only months ago, both as part of equitable distribution and for support. This new reality may also provide an incentive for parties (and their attorneys) to revisit any failed past negotiations in an attempt to save on legal costs, to prevent further delays, or to otherwise regain some control over their financial future.
The recent health crisis and associated financial problems have brought with them a myriad of complex legal questions and issues for couples who are or plan to be embroiled in divorce, custody or support matters. In these turbulent times, an experienced attorney can help their clients navigate this minefield from beginning to end. Our firm Is available and ready to answer any questions you may have.