Articles Posted in Child Support

A New Jersey appeals court recently considered a case regarding the modification of child support and alimony based on alleged changed circumstances. In that case, the husband and wife had married in 1993 and later had three children. They divorced in 2007 and agreed to a Matrimonial Settlement Agreement. In the agreement, the husband agreed to pay the wife $15,500 per month in alimony and $5,500 per month in child support. The Agreement was based on the husband’s earnings at the time, which were around $778,000 per year. In 2007, his business began to decline and by 2015, his income had reduced to about $120,000 per year. As a result, the parties amended the agreement in 2015 to reduce the alimony payment to $5,500 per month and the child support payment to $1,408 per month.

The husband then negotiated to leave his employment with a severance package of $100,000 and opened a restaurant. The husband fell into arrears on his child support and alimony payments. Two of the children had been emancipated and the youngest was in college. The husband’s restaurant closed and the husband began selling life and health insurance, allowing him to make about $100,000 to $140,000 per year. The wife filed a motion to enforce the husband’s obligations and the husband argued that the obligations should be modified based on a change in circumstances.

Modifications to Alimony and Child Support

New Jersey family court judges can modify alimony and child support orders based on the parties’ circumstances and the nature of the case. The party seeking to modify a child support or alimony obligation must demonstrate changed circumstances.

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A person’s financial situation can constantly change, this may have a dramatic impact on other areas of their lives—this may include less spending money, needing to move, or reducing child support. However, proving child support obligations need to be reduced can be a complicated process overall. In a recent New Jersey appellate court case, the court was tasked with determining whether or not to recalculate the father’s annual earnings—and thus the amount he would pay in child support—after a dramatic decrease in his income.

In this case, the parties were married and had three children. When the parties were married, the father earned between $300,000 and $1.38 million per year; however, the father was diagnosed with leukemia. The father contends that the cancer diagnosis—along with the travel, stress, and time away from the family—impacted his yearly earnings. At the time of the divorce, the parties agreed to impute an annual income of $500,000 to the father and $35,000 to the mother; this would mean the father would pay $4,000 per month in child support for the three children. The father’s yearly earnings then dramatically declined to $82,000 and then $12,000 in the years following the divorce.

The father now argues that the court erred in calculating child support payments by overemphasizing his yearly income, along with not taking into account the health insurance premiums he paid for the children. Considering the oldest two children had also left to go to college, the father argued that this change in living circumstances should alter his monthly payments to a lesser amount.

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