By Marvin Mendez, Divorce and Family Law Attorney
With the looming recession, more and more clients are calling us concerned about what will happen if they or their former spouse loses their job in the next few months. While we’re hopeful that not as many people will face unemployment as did in the last major recession, we do have experience handling these financial crises.
The court’s (and our!) biggest priority is always ensuring that your children are well taken care of and have the resources they need. If you or your former spouse lose your job, there are procedures in place to ensure that child support and maintenance are calculated accordingly.
What happened in the 2008 recession?
If the 2008 recession is any indicator, an economic recession won’t prevent people from pursuing divorce. In 2008, people still proceeded with dissolving their marriages. However, because the housing market was in such dire shape and homes weren’t selling (or were selling far below their value), divorcing couples continued to live together. In most cases, we saw folks cut back on personal spending, but attempt to maintain a status quo and a consistent standard of living for their children as much as possible.
We can’t exactly predict what the divorce trends will be with this recession, especially because the housing market is so vastly different than it was in 2008. But, there are standards surrounding what happens if you (or your former spouse) is unemployed and paying child support and maintenance.
How do I pay child support if I lose my job?
If you were the higher earning spouse in your marriage, and thus are paying child support and maintenance, but you lose your job, the court will consider a few things before making any adjustments.
First, did you receive a severance package? If so, the court is unlikely to modify any payments until after the severance package is depleted. In many cases, people are able to find other jobs before their severance package is depleted—in which case, the court wouldn’t modify your payments, assuming your new salary is comparable.
If you didn’t receive a severance package or it runs out before you’re employed, then the court will revisit your payments. In this situation, you’d likely be receiving unemployment—and the state will provide an amount specifically attributable to your children. So, your child support payment is based on unemployment benefits, rather than your previous income.
Maintenance (or spousal support) will also be reduced or modified to the extent that it’s reflective of both you and your spouse’s actual income. The court can’t make you pay maintenance from your savings or assets—just based on your actual, present-day earnings.
In most scenarios, losing your job won’t abate your child or spousal support obligations, and instead will just modify them. If your situation is dire and you truly can’t meet your support requirements, then they may be paused—but the amount owed will continue to accrue.
How do I adjust my child support and maintenance obligations?
If you lose your employment and anticipate struggling to meet your child support obligations, you should file a motion as soon as possible. Even if it takes months to reconcile, the court will modify your contributions retroactive to the date you filed the motion. You may have to dip into your savings to do so, but the court will ensure things even out in the end.
Then, when you become employed again, you’ll want to notify the court right away and disclose all of your income so that your support payments can be readjusted. You have a continued obligation to inform the court and your former spouse of your income. If you and your former spouse both work in good faith, it will streamline the process and avoid unnecessary litigation.
Contact Our Divorce and Family Law Firm in Evanston, Chicago, Lake Forest and Oak Brook
If you or your former spouse have lost a job due to the economic recession and you anticipate needing to adjust your child support agreement, contact our team. We can help you determine the appropriate course of action and support you in filing a motion with the court.
Give us a call at (847) 868-9584 or request a free consultation online. We have offices located on the North Shore in downtown Evanston and Lake Forest. We also serve all of Cook County and DuPage County from our locations in the Loop and in Oak Brook. We will happily meet wherever it’s most convenient for you.