We see an influx of calls and emails about job loss during this coronavirus crisis. If this already applies to you, I know it can be scary, confusing, and financially devastating. We have an extensive network of professionals that we can point you to if you need any help: financial, physical, or psychological. Also, if you need to apply for unemployment or if you have any questions about what you need to know as an employee, CLICK HERE. Let us discuss what loss of a job and income means for your alimony obligation.
Having an alimony obligation can be stressful. Generally, once you have an alimony obligation, there is an assumption that you can always make the income level that you were making during the marriage. Therefore, as you move forward in life and you move to different jobs, you typically will be held to that income you were making. We start with that principle because, to even begin the discussion of modifying your support obligation, you must show a permanent, involuntary, and substantial change in circumstances.
PERMANENT CHANGE IN CIRCUMSTANCES
“Permanent” means that it is not temporary. Doesn’t that sound easy? Not so fast. Permanent implies a furlough, temporary layoff, or temporary pay reduction with your employer will likely not qualify as a basis to modify alimony. However, permanent does not just mean that your current job is permanently gone. It means that you lost your job, and you cannot, with diligent and reasonable efforts, get another job close to your income that you had at the time of the divorce.
Keep in mind that the change in circumstances is measured from your income at the time of the divorce to your present conditions. Therefore, if you made $100,000 at the time of your divorce and your settlement agreement notes that the alimony about was based upon that number, your change is judged relative to that number. Let’s say you were divorce ten years ago, and in the interim, you got promotions, lateraled a few times, and are making $200,000 now. You just lost your job in this coronavirus crisis. The court will want to know if you can make $100,000 in another position, not $200,000.
Given the fluid nature of this crisis, there may be arguments for temporary relief from your alimony payments, as we saw in 2008-2009. Keep that in mind.
INVOLUNTARY CHANGE IN CIRCUMSTANCES
It is probably not shocking that voluntary changes in circumstances cannot serve as a basis to modify alimony. There are many shades of grey, however, in what is and is not voluntary. For example, if your boss subjected you to a hostile work environment and you quit your job, was the change voluntary or involuntary? You had to choose between staying home with your child or working during this crisis. Is that involuntary? This part of the analysis can be very fact-specific. In the case of job loss during the coronavirus crisis, it might seem obvious that being laid off is involuntary. In most cases, it will be involuntary. During this crisis, we think this will be the easiest part of the analysis to get through to get some relief.
SUBSTANTIAL CHANGE IN CIRCUMSTANCES
The substantial is inherently subjective. Every judge defines it differently. In some cases, your settlement agreement will determine what substantial means, but that it is not a typical provision to have your agreement. When looking at your income, I usually say that whether there is a substantial change is reasonably self-evident. Once you determine if the change is significant, then we get into how much of a change in alimony is required.
Again, we measure from the time of your divorce. Let’s continue to assume you were making $100,000 at the time of the divorce and were making $200,000 at the time you lost your job. Now, you get a new job making $95,000. That is a substantial change from your prior salary, but it is not a significant change from your income at the time of the divorce. Change in alimony payments? Probably not. If you cannot find any job with reasonable and diligent effort and go on unemployment making $30,000 to $40,000 a year, that would be considered a substantial change. The type and quantity of relief you would get is fact-specific.
If you have any questions about what this all means for you and your alimony obligation, give us a call or CLICK HERE to schedule a free consultation. We know that this time is scary, but we are committed to doing everything we can to help the community get through this.