Do You Qualify For A COVID-19 Alimony Modification?

When COVID-19 descended upon New Jersey in March, the resulting negative impact on jobs and income was immediate. Many people paying alimony wondered if they had to continue paying the same amount, given their loss of income. Others, who were receiving alimony but had lost other income, wondered if they might be able to get a boost in alimony payments. In March and April, when not much time had elapsed and the general belief was that “everything would go back to normal” by summer, the overall message was: stay the course.

Now that we are SIX months into this crisis, however, things have changed and pursuing an alimony modification may be appropriate.

Do you qualify for lowered alimony payments or a higher award? Here’s some information that can help you understand your options.

Alimony & COVID-19 Income Loss

Let’s look at some common scenarios of people who may find themselves looking for a changed alimony amount.

Jeff is a restaurant owner whose business has been decimated since the shutdowns began, now has losses projected to last until at least 2021. He and his ex-wife Lisa enjoyed a pretty high standard of living while they were married, so he has been paying a good amount of alimony, as well as child support for their two kids. He knows that Lisa could get by on much less, so he is questioning the fairness of being the only one to shoulder the entire burden of his income loss. He is also worried about the business folding completely, which would be a long-term disaster for all of them.

Sienna is a hairdresser who relies on alimony to supplement her income so that she can pay her mortgage and other family needs. Her business was closed entirely until May, and now she has just a few customers trickling back in. Most of them are worried about their own financial situations. Whereas before they might have come in often for a full cut, color and blow-dry, now they tend to want the bare minimum, maybe just an occasional root touch up. Sienna needs more money. Her ex-husband is a regional manager for UPS, so his job is solid. In fact, she recently caught wind that he got a big bonus for all the extra work he’s been doing to keep shipping and deliveries running smoothly.

When it comes to whether Jeff or Sienna can get their alimony payments modified, it will depend on a few other factors, as we’ll see below. It’s clear that neither of them should delay any longer before reviewing their situations with an attorney.

Is Your TYPE of Alimony Open To Modification?

There are five types of alimony (also known as spousal support) in New Jersey. All of them, except one — reimbursement alimony — can be modified. Check your alimony agreement carefully to find out which type you have.

1.  Temporary, or pendente lite alimony. This is a form of temporary spousal support a court might award while a divorce case is pending, to preserve the status quo.
2. Limited durational alimony is alimony that is provided for a set number of years, usually commensurate with the length of the marriage marriages that lasted 20 years of less.
3. Open durational is alimony that doesn’t have a set end. If you received your award before September of 2014, it might also be called permanent alimony.
4. Rehabilitative alimony is alimony that goes towards job training or related costs (i.e. college education) to help a spouse to re-enter the job force, and
5. Reimbursement alimony which is awarded to compensate one spouse for contributions to the education or career advancement of the other. (i.e., one spouse worked to put the other spouse through medical school). Reimbursement alimony is the only type of alimony that is not modifiable.

Important Note: Some people may have a specific clause in their Marital Settlement Agreement that specifically states that whatever alimony type they have (Limited or Open Durational, etc.) is not open to modification. Read your agreement carefully!

How to Modify (Change) Alimony

On Your Own/Out of Court

As a first step, you can explain your situation to your ex and see if the two of you can work out an arrangement on your own to temporarily lower or raise alimony to give you some relief until your income circumstances improve. If you are able to go this route, get your arrangement in writing, ideally reviewed by your attorney. The agreement should include an end date for the changed alimony amount to revert back, or the change in circumstances that will trigger a return to normal payments. (For example, once business income returns to a certain amount, regular payments can resume.) This kind of assurance may help your ex agree to a temporary change of terms.

If You Need to Go to Court

If your ex is unwilling to negotiate your own terms, you have the option of asking the courts to review your circumstances and issue a modification.

New Jersey law requires a party requesting an alimony modification to make a prima facie showing that due to a change in circumstances since the original award, the applicant’s ability to support himself or herself has been substantially impaired. What this means is that the applicant must present enough evidence to make a case before the other party has a chance to present contradictory evidence. In other words, you need to go to court with ample evidence that alimony needs to change.

Every motion is individually assessed, and judges have broad discretion in making decisions. A judge will consider the terms of the original order and compare the facts as they were when that order was entered with the facts as they are at the time of the motion. If you succeed in making your prima facie case, the matter will move on to a full hearing, where both sides can present evidence.

Making a Case for Modification

Judges considering requests for modification or termination of alimony require detailed information about each party’s current expenses and sources of income. In New Jersey, the appropriate form for reporting income and expenses is the Family Law Case Information Statement (CIS). Monthly expenses are entered in Part D. You will need to be able to explain your numbers and produce supporting documentation. Expenses can be verified by documents like bank statements, cancelled checks, credit card statements, utility bills, leases or mortgage statements, and personal loan documents.

Information about income is entered in Part C of the CIS. You must include things likes severance pay, unemployment benefits, and any other benefits that may reduce living costs, as well as any assets you have that might be available to create a stream of income. Supporting documents normally include recent tax returns, and W-2 statements or business records. Self-employed parties should provide a business analysis comparing current economic and non-economic benefits to benefits that existed at the time of the entry of the alimony order.

Accuracy is critical. While it is important to provide exact numbers whenever possible, if you must estimate, indicate that you have done so, and explain why you believe the estimate to be reliable. An attorney can help you prepare your CIS but be sure that you are personally familiar with all your figures and documents. You will be the one required to testify regarding accuracy if your matter ends up in a court hearing.

Requesting a Decrease in Payments

For a judge to consider a motion for a decrease or termination of alimony payments, the payer must generally demonstrate either a “good faith” decrease in ability to pay or a decrease in the recipient’s need for the current amount of support.

A good faith decrease in ability to pay is generally any decrease that was not voluntary and was not intentionally engineered for the purpose of avoiding the support obligation. This would include losing business or being laid off due to the COVID-19 crisis. Health is also a factor that a court will consider, so someone who was not laid off, or was not required to close their business, but who nevertheless lost work because they or someone in their family became ill, or because they felt the need to leave a public-facing occupation due to a pre-existing condition, would also generally be acting in good faith.

Applicants who lost a job or had their hours reduced will also need to provide documentation supporting efforts to become re-employed at the former level, or evidence supporting a claim that such re-employment is not possible. If employment in the previous occupation is not available, an applicant must pursue other avenues of employment. Proof that an applicant is doing everything possible to become fully employed would include an updated resume, and a log demonstrating actual efforts to find work. The log should include dates, times, contact names and methods of contact (phone, email, interview, networking efforts, etc.). Conducting an aggressive job search and keeping detailed records of results is important. In this uncertain climate, statistical evidence demonstrating a lack of available appropriate work may be even more important.

Because courts generally require a showing that available income has decreased permanently, or at least indefinitely, a judge will often deny a request for a decrease in payments filed after a brief period of unemployment on the grounds that the change in circumstances may be only temporary. In a weak economic climate like the current one, on the other hand, a court might accept that a job loss will be long-term even when it has occurred relatively recently. The 2014 amendments to the New Jersey alimony statute (N.J.S.A. 2A:34-23) provide that 90 days is the minimum period of unemployment required before a party can file an application for modification of alimony on that basis. The biggest challenges many people will have is predicting how long their change in circumstances might last, or when an employment search might reasonably be expected to bear fruit. A court has the power to fashion a temporary suspension or adjustment of a support award, pending an applicant’s continued efforts to regain income.

Requesting an Increase in Payments

An alimony recipient can generally request an increase for the same kinds of reasons that would justify a decrease for a paying party. For example, a recipient who has been laid off from a job due to a work slowdown can request an increase in alimony if the lay-off is likely to be permanent and a comparable new position is unavailable. A spouse who was expecting to be fully employed within a brief period of time and has not been successful in finding employment may also have a claim. In either case, the claim will require the same type of documentation as a claim requesting a decrease in payment due to job loss, including proof that the applicant is doing everything possible to become fully employed. Required documentation will include an updated CIS, recent tax returns, W-2’s or evidence of self-employment income, an updated resume, and a detailed log demonstrating efforts to find work. A paying party can rebut a request for an increase by showing either that the recipient does not really need it or that there it would result in too great an impact on the paying party’s ability to support himself of herself.

Bring Your Request for Modification Promptly

While a court will not address a change of circumstances claim until after the circumstances have actually occurred, once the new circumstances are in place, it is important not to wait too long to request a modification. An attorney can provide you with advice on how best to present your claim as well as on the best timing. You can request an initial virtual consultation with an attorney to go over your case.

Your next steps

Is an alimony modification right for you? Get answers to all your questions by scheduling a virtual consultation with our one of our family law attorneys. Call us at 888-888-0919, or click the button below.

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