Personal Finance

What to do if you're struggling to pay child support or alimony during the coronavirus crisis

Key Points
  • Support payments are based on your income and assets at the time the agreement is set and typically can be hard to alter unless there is a material change in your ability to keep up.
  • With many court systems closed or operating on a limited basis, it may be hard to get a revision made quickly, depending on where you live.
  • Regardless, you should communicate with your ex-partner and try to work something out for the time being with the recognition that the recipient may rely on that support to pay their own bills.

Add child support and alimony to the list of obligations weighing on people during this coronavirus crisis.

As household finances reel from unemployment, business shutdowns and stay-at-home orders, some individuals are reaching out to lawyers to explore their options for modifying those payments.

"Anecdotally, [family law] attorneys are seeing a marked increase in inquiries for both divorce and modifications to support agreements," said Susan Myres, president of the American Academy of Matrimonial Lawyers.

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With skyrocketing unemployment — about 22 million Americans filed for those benefits in the four weeks ending April 11 — and the stock market cratering, affected households have been searching for ways to reduce their bills. And while some consumer-oriented companies — e.g., banks, other lenders and insurers — are offering ways to temporarily suspend or lower monthly payments, it can be trickier to tackle child support and alimony (also called spousal support). 

Those obligations are calculated based on your income and assets at the time the amount is determined, and the agreement can stretch for many years. And typically, unless there's been a material change in your income, it can be hard to alter.

Complicating matters is that the individuals receiving the support — i.e., the custodial parent — may need the money to cover their own living expenses. 

"There has to be recognition that the support might be a major source of income for the ex-spouse — they're taking care of children and there still needs to be a roof over their heads," said Valentina Shaknes, a partner with the law firm of Krauss Shakness Tallentire & Messeri in New York.

Additionally, with many court systems either shut down or running in a limited capacity, getting immediate relief from a judge's ruling could be challenging, depending on where in the country you're located.

Court systems and processes vary from state to state. Some jurisdictions make it easier than others to file a modification request. If you're unsure about the process in your state, you should reach out to a family law attorney in your area about your options, which also may include mediation or other non-court avenues to relief, Myres said.

In the meantime, you should also reach out to your ex, whether directly or through an attorney, to explain your situation.

"The first step is to communicate," said certified financial planner Erika Safran, principal of Safran Wealth Advisors in New York. "If you just withhold the payment, the response won't be, 'Let's work it out.'

"It'll be surprise, frustration and anger."

The financial cost of divorce
The financial cost of divorce

Just be aware that child and spousal support obligations continue to accrue at the ordered amount unless and until the order is modified by the court or by a written agreement between the parties, Shaknes said.

It's also important to note that judges generally will look beyond just your paycheck to determine your ability to pay.

"The court will look not only at your income stream but also your assets," said Shaknes. "If you're sitting on a $2 million brokerage account, even if it had been at $3 million, you're not getting relief."

For people who aren't likely to get a reduction in their support obligations because of their assets, it's worthwhile making sure you have cash available to meet those payments going forward for at least a year, Safran said.

"Identify what you'll need to supply one to two years of obligations," she said. "You might not want to sell right now, but you also don't know where the market is going to go."

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If you have filed for unemployment, be aware that those benefits are considered income — meaning not only is it subject to certain taxation, it counts toward your ability to pay. In some states, depending on how your support payments are typically paid, they may automatically come out of your unemployment benefits, Shaknes said.

Meanwhile, during the financial crisis of 2008-2009, courts were not that forgiving when it came to requests for support modifications, Shaknes said.

"A lot of people who suffered job losses or severe income reductions tried to get their obligations reduced and were not successful," Shaknes said. "We kept hearing 'go get another job.'"

This time around, she anticipates more judicial understanding.

"My expectation is there will be some [adjustment] of these obligations," Shaknes said. "The judges are not going to be able to say, 'Go get another job,' when there are [millions] filing for unemployment."

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