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. Despite creativity by lawmakers to provide financial relief to businesses, parents, and individuals, such resources often only provide minimal temporary relief.
In a new world of financial uncertainty, individuals paying or receiving child 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.
Here’s What You Need to Know About Child Support and COVID-19
Generally, when a Court determines a child support or spousal support obligation, the Judge will take each party’s income and available financial resources into consideration. However, current child support obligations are based on a pre COVID-19 income and financial situations. If COVID-19 has caused your financial circumstance to change, the first step is to take a personal financial assessment regardless of if you are paying or receiving child support.
A reduction of income is one of many aspects of your personal financial circumstance. Other considerations: Do you believe you will be able to replace said income in the near future? Do you have any savings or retirement? Do you have any assets that could provide income? For example – If you have a property available for rent that you were listing at $1,200.00/month with no takers, you may want to consider reducing your asking price.
If you have notable “rainy day” savings that could provide financial relief for at least a few months, then today may be the day you access those funds. If you have none of the above, that is important too. A change in income alone, even if substantial, is not an automatic basis for a Judge to increase child support to the receiving party or to reduce child support for the paying party.
Discuss Your Situation With Your Family Law Attorney
Next step: how does the change in financial circumstance affect your legal rights? Once you are able to take a personal financial snapshot, the next step is to discuss your situation with your family law attorney. If you are receiving child support but the current amount in conjunction with your reduced income does not cover all of the child’s necessary expenses, then you may have the legal ability to ask for an increase. If you are paying child support but the current obligation is far beyond what you can afford, then you may have the legal ability to ask for a decrease.
Further note, the financial circumstance of the opposing side will also need to be taken into consideration. If both of you have lost income as a result of COVID-19, then application of the law will not necessarily lead to an increase or reduction of the child support obligation. With the assistance of your family law attorney, you will be able to assess your next steps.
A child support obligation is generally formalized by an Order which is signed by a Judge and filed with the Court. However, a child support obligation can also arise as a result of a Separation Agreement, a Parenting Agreement, or some other form of a contract. If the child support is a contractual obligation, then you will want to refer to the agreement directly.
Some agreements may address what happens in the event of a reduction of income. Unlike an Order, a Judge cannot modify a contractual obligation (Exception: If a Separation Agreement is incorporated into an Absolute Divorce Judgment, then the child support contractual obligation becomes a court-ordered obligation). If the agreement does not have a process by which to modify the child support, then your options may be limited to negotiating a modification with the opposing side or having to file a new claim for Child Support with the Court.
Your family law attorney can assist you in negotiating the modification as well as formalizing any agreement in an amendment.
Please be advised: a verbal agreement between you and the opposing party as to reducing or increasing the child support amount does not automatically modify the legal obligation. This issue comes up often in Court. One party will claim that a verbal agreement was reached (whether this is true or not) but that party is unable to show the Court a contract or Court Order reflecting the new “agreed-upon” amount. In the absence of this evidence, the paying party continues to be liable for the full amount in the contract or the Court Order.
File a Motion to Modify Child Support
If the child support obligation stems from a Court Order, then your next step is fairly straight forward: file a Motion to Modify Child Support. Under North Carolina law, you will be required to show a substantial change of financial circumstance that affects the financial welfare of the children. Due to the complexity of drafting such a motion to meet these legal burdens, work with your family law attorney to draft the Motion. Even if the Courts are currently closed for non-emergency matters, your Motion to Modify Child Support can still be filed with the Court.
A child support obligation will continue to be binding upon a party until that order is modified by another Court order or a modified agreement.
When Should You File the Motion to Modify?
Now. A Court-ordered Child Support obligation can rarely be modified prior to the date the Motion 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 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.
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.
What Do You Do in the Meantime If You Are the Payor?
Legally speaking, you are required to continue to pay the Court-ordered or contractual Child Support obligation until a modification is formalized, either via negotiations, amended agreement, or a new 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 contract 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.
It is important to talk with your family law attorney and seek modification 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 in the world. However, an experienced family law attorney can help you navigate your options for Modification and will ensure you are 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, where my practice is based. While the insights provided are widely applicable, readers in this situation should consult an attorney regarding the specific laws in their state or country.
Sodoma Law Attorney Theresa E. Viera practices Family Law in Charlotte, N.C. She provides legal counsel in a variety of cases including domestic violence, child custody and support, divorce, and alimony. She is a member of the Mecklenburg County and North Carolina Bar Associations. www.sodomalaw.com