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.
The Court’s Decision
The appeals court found the husband failed to establish changed circumstances after the parties executed the amended agreement. The court noted that when the husband signed the amended agreement, he was aware of changes to the financial industry and of his earning potential. The court found that the husband’s choice to invest almost $500,000 in the restaurant, in a field in which he had no experience, and to opt not to work in the financial field, where he was experienced, did not relieve him of his support obligations.
However, the appeals court found that the family court may have made a mistake in denying the husband’s motion to modify his child support obligation based on the emancipation of their two older children. It was not clear whether the court determined if the child support payment was meant to be reduced as the children were emancipated. The wife seemed to agree that the child support payment was reduced when the two older children were emancipated, but the court failed to reflect any reduction in the payment in the court’s order. Therefore, the court sent the case back to the family court to consider the husband’s motion for modification of his child support obligation based on the emancipation of the two older children.
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