Unemployment and Divorce
Let’s face it: there’s no great time to get a divorce. That’s even more true when either you or your husband is unemployed.
Sometimes, there just isn’t a good resolution and, no matter how we slice it, things are not going to end up particularly advantageously for either party. That can be tough to accept, but it is sometimes the case.
I’m thinking of a particular case today, as I write to you. The parties in this case have far, far more debt than they have assets and, as of just last week, the husband is unemployed. (In this case, it seems like it’s through no real fault of his own, but I will also discuss in this article what can happen in a case where it IS through the party’s own fault that they find themselves currently unemployed – so just hang tight, my friend.)
The way the court looks at a marriage is that it’s a partnership – much like any business between two partners is a partnership. In terms of a divorce, it’s really just a question of dividing up the assets, liabilities, and responsibilities resulting from the marriage between the two parties. Though someone’s fault CAN be a factor in how we distribute assets between the parties in equitable distribution, that’s not automatic.
We would look at four things: negative monetary and negative non monetary contributions to the marriage, as well as positive monetary and non monetary contributions to the marriage. Those things can help us – in equitable distribution – figure out how to allocate assets, liabilities, and responsibilities between the parties. In most cases, it’s still relatively close to 50/50, but it’s theoretically possible that a different division would be utilized.
You are likely to find that the court thinks that – regardless of negative monetary and non monetary contributions – you both deserve a share of what was earned, purchased, or acquired during the marriage. If it’s all debt, well, you’re likely to walk away with very little. If there are assets, you are entitled to the benefit of the marital portion of those assets.
Unemployment, though, can create issues for both child support and spousal support, as well as create issues – like the threat of foreclosure – that can impact even the assets that you do already have in place, so it’s important to talk to an attorney right away about what you should do to safeguard your marital share.
In almost any case, it’s going to have some impact on how things go down. It’s definitely important to get someone to look at your unique case first, right away.
When the unemployment is his (or your) fault
Unemployment can be as simple as someone getting laid off, or a company closing its doors. It’s not necessarily someone’s fault. But…it also CAN be a question of fault. People get fired all time. They also, sometimes, quit.
In fact, in one of my cases once, a husband got fired for having an affair at work – so, obviously, that touches on all sorts of issues related to family law and divorce.
For spousal and child support
If someone was fired for fault, and child and/or spousal support is an issue, imputation is a possibility. Imputation happens when we credit someone with earning an income that they aren’t actually earning.
If, for example, he quit – maybe to avoid paying child and/or spousal support in the first place – or was laid of for his own misconduct, the court feels like you have less of a responsibility to be held accountable. Why should you lose out on support just because of his bad acts, right?
Of course, as my mom would say, “You can’t get blood from a rock,” so, if he’s really unemployed, he may have a hard time actually PAYING support if he’s unemployed for a period of time. But, still, income could be imputed to him, so, even if he doesn’t pay, he’s legally responsible for it. His arrearage would build up over time and, if he did get a job later, you could get wages garnished and take other steps to secure the support that you were court ordered to receive.
Foreclosure, the marital residence, and other assets
When someone is unemployed, some of the biggest pressures are the most expensive ones: like the monthly mortgage payment. If you can’t pay, you may quickly find yourself in a hole that is difficult to dig out from underneath.
As far as the mortgage goes, you can probably apply for a forbearance – at least, to buy you a little time until you can prepare the house for sale, if there’s equity. Getting out of it may be one of the quickest things to give you a little breathing room, although you’d still then have to find somewhere else to live, whether you buy or rent.
Keeping the house may be out of the question, but, again, it’s probably a good idea to talk an attorney right away, or even meet with a financial planner to get an idea of where you can make cuts to stem the flow in the meantime.
Other loans may also be an issue – especially cars or other expensive items. Again, you may want to talk to a financial advisor, or you may be forced to get rid of them in order to preserve what equity you may still have.
Either one of you – or both of you – becoming unemployed during your divorce means that the pressure is on, not just to end your marriage (though you may feel pressure on that score, too) but to make arrangements with respect to your assets quickly, and without losing the equity you’ve spent your marriage accruing.
In general, it’s a bad idea to dispose of assets without an agreement in place, so you’ll want to act quickly – talk to an attorney and get a sense of what you can and can’t do, and then act quickly to protect your finances.
For more information, or to request a consultation today, give us a call at 757-425-5200.