Modification of Child Support

I have heard on more than one occasion from a client that their spouse or ex-spouse isn’t earning nearly as much income as he/she may be capable of earning.  This statement is often made in the face of an alimony or child support calculation.  What happens if this is in fact true?

During the divorce process one of the more common ways to determine how much income a spouse can earn is to have them evaluated by an employability expert.  Now if you look up “employability expert” as a qualified profession or a course of study available in a college course book, I doubt that you would find it in there.  Like many other things, employability experts arose out of a need in the legal profession to have an individual with the proper experience, knowledge and background meet with an individual and assess their skill set to determine what kind of employment they may be eligible to obtain. Viola- a new niche profession is born!

So what about after a divorce is finalized and an ex-spouse is either unemployed (because of the economy, the job market or they simply refuse to work) or is underemployed (earning less than they had previously earned either by choice or no fault of their own) and a support obligation exists?  What does the court then rely upon when addressing the recalculation of a support award?Continue Reading Calculating Child Support Obligations

It is not uncommon for divorcing parties or parties who may have never married but share a child in common to face the issue of the costs of childcare.  In a time and economic climate where more often than not, both parents must work to support a household, payment of child care costs is an issue that must be addressed.

When calculating the Child Support Guidelines, which is the method NJ courts use when determining how much child support one party will pay to another for a child or children, part of the consideration allowed is a credit for child care costs paid.  It is not necessary that the cost of child care be included in the Guidelines calculation, as sometimes there are situations where parties will negotiate payment of this expense outside of the Guidelines calculation.Continue Reading Child Care Expenses as Child Support

At the time of divorce proceedings, many of my clients ask if they can “lock” the other party to whatever support amount is rendered. If the person asking is going to be paying support, they are asking because they do not want to have to pay more in the future. If the person asking is going to be receiving the support, they are asking because they intend to rely upon the amount indefinitely. My response in most circumstances is that it can be done but it should only be done with great caution and only done by way of agreement. For example, while a litigant’s intent may be to “lock” the support amount because they are anticipating earning more in the future and do not wish to pay more in the future, once locked and the litigant is faced with unanticipated detrimental financial circumstances, they may be unable to obtain a decrease of their support obligation. In other words, it goes both ways – being bound to a specific number regardless of changed circumstances can be very beneficial in some circumstances and in other circumstances very disastrous.

N.J.S.A. 2A:34-23 recognizes the equitable power of the Courts of the State of New Jersey to modify alimony and support orders at any time. Specifically, N.J.S.A. 2A:34-23 states:

 

Pending any matrimonial action brought in this State or elsewhere, or after judgment of divorce or maintenance, whether obtained in this State or elsewhere, the Court may make such order as to the alimony or maintenance of the parties . . . as the circumstances of the parties and the nature of the case shall render fit, reasonable and just, and require reasonable security for the due observance of such orders. . . . Orders so made may be revised and altered by the court from time to time as circumstances may require. 

 

Based upon the mandates of the statute, “alimony and support orders define only the present obligations of the former spouses.” Lepis v. Lepis, 83 N.J. 139, 146 (1980). Alimony and support obligations are always subject to judicial review and modification upon a showing of a change in circumstances. Id.    A type of “‘changed circumstance” that warrants modification of a support order is an increase or decrease in the supporting spouse’s income.” Innes v. Innes, 117 N.J. 496, 504 (1990). However, what happens when the parties agree at the time of the divorce that the support provisions cannot be modified?

 

The Appellate Division decision discussed whether or not a non-modifiable clause (also called an “anti-Lepis” clause) is enforceable in the decision of Morris v. Morris, 263 N.J. Super. 237 (App.Div. 1993). The Morris Court did find that an anti-Lepis clause could be found unenforceable in some circumstances, although the particular anti-Lepis clause in Morriswas upheld. In Morris, the defendant husband sought a reduction in alimony payments despite an anti-Lepis clause in the alimony agreement stating that the agreement was not modifiable for any reason except for the husband’s physical disability. The husband based his request for reduction on a claim that the his annual income was $49,000 while his annual alimony payment was $35,000. The wife argued that husband kept all of the assets pursuant to the parties agreement and in exchanged for non-modifiable alimony, she agreed to a support amount of much less than the amount needed to sustain the marital standard of living. In holding that the husband was not entitled to a reduction in alimony payments, the court addressed a conflict between two chancery court decisions. In Smith v. Smith, 261 N.J. Super. 198, 199-200 (Ch. Div. 1992), the court determined that “an ‘anti- Lepis’ clause, which seeks to preclude the exercise of [the] Court’s equitable responsibility to review and, if warranted, to modify support obligations in response to changed circumstances, is contrary to the public policy of this State as reflected in its Legislative Acts and its judicial decisions.” In Finckin v. Finckin, 240 N.J. Super. 204, 206 (Ch. Div. 1990), the court concluded that public policy did not prohibit the use of an anti- Lepis clause.
 Continue Reading The Good, the Bad and the Ugly: Locking in Support Obligations

New Jersey has upheld the long standing principle that permanent alimony awards are subject to review, modification and possibly termination based upon changed circumstances.  (Lepis v. Lepis, 83 N.J. 139 (1980).  However, it is not enough to paint a bleak picture of a payor’s financial circumstances in order to succeed in a downward modification or termination of alimony.  The applicant must also show the Court that the financial difficulties being encountered are not temporary and/or subject to contingent circumstances.  Innes v. Innes, 117 N.J. 496 (1990).

In the recent unreported Appellate Division decision of Norych v. Norych (A-2633-07T1 decided April 16, 2009), while the payor applicant provided the court with very grim descriptions of his personal financial situation and the financial affairs of his law firm, the applicant miserably failed to substantiate his professed circumstances.

In the Norych matter, the parties were divorced in 1992 and at the time of the divorce, the ex-wife received a permanent alimony award of $1,000 per month partly based on ex-husband’s law firm income of $70,000 per year and ex-wife’s income as a teacher of $25,000 per year.  Ten years later, the alimony increased to $1,100 per month.  In October 2007, ex-husband filed a Motion seeking to terminate his alimony obligation based upon  what he characterized as two devastating and shocking events. 

Continue Reading Painting a Grim Financial Picture…Is It Enough To Obtain a Decrease Or Termination Of Support?

Though we have blogged about this issue in the past, as it is particularly topical given the article in today’s NJ Biz that New Jersey area (including the New York Metropolitan area) job losses are outpacing the national addresses. 

As noted on prior job posts. the standard for modifying support is that there has to be a substantial and continuing change of circumstances.  Moreover, in order to get relief, you must document your job search efforts to show the court that you have made a good faith effort to find a new job.

When a client loses their job, the following things should be done:

  1. Retain all documentation from the employer showing that the job loss was involuntary.  If there is a severance agreement and any other documentation, that should be maintained as well as the final paycheck showing the severance received (if paid in a lump sum).
  2. Keep a detailed log of all efforts made to find new employment with as much information as possible (who you contacted, when you contacted them, what they said, etc.)  If the communications were in writing, keep copies of all emails, resume’s, cover letters, rejection letters, if you applied for a job on lie (i.e. Monster.com), confirmation that you applied for work.
  3. If the problem is industry wide, any newspaper, trade or other articles or documentation showing that the industry has contracted or is having problems.

The question arises regarding what you do when offered a job that is not consistent with your prior earnings.  If you have been out or work for a short time, this creates a tough decision about whether to take this job or wait.  If you do take this job, my suggestion early after losing a job, my suggestion would be to continue your job search if at all possible.

If you have been out or work for some time and you have made a good faith job search, while possible, I find it hard to believe that a court would penalize someone for taking work – especially in this economy.Continue Reading What To Do When You Lose Your Job

When most parties enter into what is commonly referred to as a Property Settlement or Marital Settlement Agreement, they do so with the intention that this is a comprehensive agreement, resolving all the issues and a document that will govern their dealings with an ex-spouse going forward.

Oftentimes people are shocked to learn that some provisions in those agreements can be subject to modifications by a court.  Such is the case of the recent unpublished appellate division matter of Anello v. Anello, Decided March 23, 2009, A-2405-07T3.

These parties were married in 1982 and divorced in 2002 by way of a dual final judgment of divorce incorporating the terms of their Property Settlement Agreement. (“PSA”)  Two children were born of this marriage.  In the PSA entered into by the parties, the husband was entitled to alimony, to which there was a specific and detailed waiver of this right.  Husband waived the right to receive permanent alimony and gave wife a greater share of equitable distribution in exchange for a total and permanent waiver of a child support obligation for both children.  Husband did agree to contribute to college expenses and non-recurring extraordinary events for the children.  Husband’s waiver of permanent alimony was expressly conditioned upon his non-payment of child support.

Some four years after the agreement was entered into, husband filed a motion seeking custody of the son, child support, alimony and counsel fees.  The parties entered into a Consent Order resolving this motion, which reserved the issues of child support and alimony pending discovery.Continue Reading Post-Divorce Modifications to Agreements

Given the current economy, a major issue being discussed by family law attorneys and judges is how to handle the issue of support modification where due to the current economy, someones income is eliminated or greatly decreased.  The standard for modification of support is that there has to be a showing of a substantial and continuing change of circumstances.  One of the major issues being discussed is how long does one have to be out of work before making an application to the Court. 

The second issue is even if the change is temporary – whatever that now means – should there still not be some temporary relief because if the existing Order or Agreement is not fair.  A general proposition of law is that Agreements can only be enforced to the extent that they are fair.

Earlier this week, the Appellate Division decided the case of Baker v. Baker which leads me to believe that help may be on the way. To view the case, click here.

In Baker, the parties were divorced in 1998.  At the time, the husband worked was a Managing Director at Pershing Trading Company and earning nearly $800,000 per year, the great
bulk of which came in the form of an annual bonus.  The parties agreed that he would pay alimony in the amount of $10,000 per month.Continue Reading Modification Based On The Economy – Is Help On The Way?

On February 13, 2009, the Appellate Division issued an interesting unreported decision in the case of Chopoorian v. Chopoorian dealing with a topic that we have blogged about frequently as of late – modification of support obligations. To review the full text of the opinion, click here.

The parties were divorced in 2005.  During the marriage, the husband operated a highly  successful advertising business which provided him with an annual income of over $900,000 in 2003. The parties also owned several valuable pieces of real estate.  The divorce agreement required the husband to pay $187,500 per year in permanent alimony and $50,000 per year in child support.  Of note, the Agreement stated:

Husband’s earned income as defined herein may increase to $650,000 gross per year (before taxes) before Wife is entitled to file a Motion to modify/increase alimony
based on an increase in Husband’s earned income. Husband’s earned income must decline to $400,000 gross per year (before taxes) or below before he is entitled to file a Motion to modify/decrease alimony based on a decrease in earned income.

The husband was also supposed to pay the wife $1.3 million over time for her share of the business interests.Continue Reading SUPPORT MODIFICATION – ANOTHER DAY ANOTHER DECISION