Legal Relief During Unprecedented Times
The ripple effect of COVID-19 has led to unprecedented emotional and financial effects on our families, communities, and economy. A reduction in jobs available to the workforce due to stay-at-home orders and social distancing practices is leading to previously unimaginable reductions in income and financial resources. Unemployment claims have spiked to new records at both the federal and state level. In a new world of financial uncertainty, individuals paying or receiving child support or spousal support may feel nervous about paying next month’s rent or mortgage payment. Even now, with limited access to the court system, there are legal resources available to help.
Generally, when a Court determines a child support or spousal support obligation, they take each party’s income and available financial resources into consideration. However, current child support and spousal support obligations are based on a pre COVID-19 income. As unemployment claims skyrocket, many people are asking, “If my income has changed drastically, can my financial obligation be adjusted?”
The first step:
File a Motion to Modify if the financial obligation is Court ordered. Simply not being able to pay does not automatically legally result in a reduction or modification of the financial obligation. Regardless of the form of financial support, a Court-ordered child support or spousal support obligation will continue to be binding upon a party until that order is modified by another Court order. If you have lost your job with no likelihood of regaining a similar position, or suffered a significant reduction of income with no likelihood of recovering said monies in the foreseeable future, then you likely have the ability to file a Motion to Modify the child support or spousal support obligation.
When should you file the Motion to Modify?
Answer: Now. A Court-ordered obligation can rarely be modified prior to the date of a request to modify is filed with the Court. For example: If a person’s income was reduced significantly on March 15th and a Motion to Modify was filed on April 1st, then at the future hearing, a Court has the authority to reduce the child support or spousal support obligation beginning April 1st. However, should the Motion to Modify not be filed until June 1st, then a Court can only reduce the obligation back to June 1st instead of April 1st when the financial situation shifted. This is true regardless of when the matter is heard by the Court – even if the hearing does not occur until 2021 due to pandemic-related court closures. The hearing date is not necessarily determinative of when child support or spousal support will be modified; rather the date of filing of the Motion to Modify is determinative.
One notable exception:
Is if the child support or spousal support obligation is not in a Court order but rather in a contract, such as a Separation Agreement. Generally, a financial obligation assumed via a Separation Agreement is not modifiable by a Court since parties are able to contract in creative means beyond what a Judge is able to do. Should you need modification of a contract-imposed financial obligation, the first step would be to contact your attorney to initiate modification negotiations. Even with limited access to the courts, modifications to child support and spousal support can still be obtained in some scenarios.
What do I do in the meantime?
Legally speaking, you are required to continue to pay the Court-ordered or the contract-imposed financial obligation until a modification is formalized, either via negotiations or a Court order. Absent a modification, the amount owed will continue to accrue. Should you not pay the obligation in accordance with the Court order or the Separation Agreement prior to modification, then the receiving party may have the ability to file legal action seeking enforcement. In a worst-case scenario, the receiving party may have the ability to file a legal action seeking sanctions such as fines and/or imprisonment. This situation can be further complicated should the receiving party file a motion to enforce the financial obligation before the payor has sought a modification. This is just another reason it is important for you to talk with your attorney and file a Motion to Modify obligations sooner rather than later if you are coping with a change to your financial situation.
This may sound overwhelming on top of everything else going on the world. However, with the assistance of an experienced family law attorney, these legal realities should encourage you to act now to avoid a financial disaster when we finally overcome this pandemic. An experienced attorney can help you navigate your options for Modification and will ensure you’re taking the right steps to not just cope for the now, but prepare for the future.
Please note this information is based on North Carolina law.