What if I Lose My Job During the Divorce Process?

If you and your spouse are in the middle of divorce proceedings and you suddenly lose your job, this can complicate the process. Even if you handle your divorce through mediation, there are significant expenses associated with a divorce, so the loss of income can make a difficult situation even more complicated.

More couples filed for divorce in 2020 than in years past, and the coronavirus pandemic had a devastating impact on the economy, causing approximately 33 million people to collect unemployment benefits. If you lose your job, there are a range of factors that will impact the outcome of your divorce case and your financial responsibilities to your ex-spouse.

Once a divorce settlement has been reached, it is legally binding and both parties must comply with the divorce decree. This includes financial responsibilities, like making the agreed-upon alimony and child support payments. If your financial circumstances have changed due to a job loss, you cannot simply stop making those payments. There are legal channels you must go through to request a modification of the divorce settlement. The court will consider a range of factors when considering your request, including the following.

Cause for the Unemployment

The court’s goal is to ensure that your ex-spouse and children are able to maintain the same quality of life that they enjoyed before the divorce. If your job loss is going to have a significant impact on their lifestyle, the court will need to know the circumstances of your job loss. For example, if you lost your job unexpectedly due to company-wide layoffs, a judge may have sympathy for your situation and temporarily adjust the amount of your financial obligations until you are able to secure another job. However, if you were fired due to irresponsible or unethical behavior at work, the judge will most likely order you to continue making the payments that were agreed upon prior to the divorce.

It is your responsibility to find another job with a comparable salary so that you can meet your financial responsibilities.

Demonstrated Effort to Seek Employment

In addition to the circumstances of your unemployment, the court will want to see that you are making a concerted effort to find a new job. By taking the following steps, you will be looked upon more favorably by the court as you continue to seek employment:

  • Be diligent: Treat your job search like a full-time job. While it may be tempting to take advantage of your downtime by tending to your list of house projects, getting a new job should be your top priority. Your down time should be spent networking, consulting with employment agencies or other proactive steps towards obtaining a new job as soon as possible.
  • Provide evidence of job search records: Maintain copies of job applications, and keep a detailed log of all phone calls with recruiters and any networking events you have attended.
  • Avoid sudden career changes: Just because you lost your job, it does not mean that you should look at it as an opportunity to change careers, or go back to school, particularly if you were the primary breadwinner in your marriage. If you lost your six-figure job working in the financial industry, a judge will not look favorably at your decision to suddenly pursue a career as a yoga instructor, which makes significantly less money.

The court will also consider other factors, such as:

  • Your ex-spouse’s income and circumstances.
  • Whether your health impacts your ability to obtain employment.
  • Whether you received a severance package or some other financial reward from your previous employer.
  • Whether there are any other changes in your financial circumstances, including enhanced earnings or other financial benefits, between the date of the alimony order and the date that the alimony is being modified.
  • Whether a temporary remedy should be established while you seek employment.
  • If you are self-employed and you are experiencing a loss or a reduction in income, you must present the court with an analysis of the economic and non-economic benefits you received from your self-employment prior to your loss of income.

Can I Modify Alimony Payments?

If there is a significant change in your financial circumstances due to your employment status, you may ask for a modification of a spousal support order. The motion will be filed in the same court where the divorce judgment was issued.

Once you have completed the petition for modification, it must be filed with the court and served to your spouse. A hearing date will be scheduled, and you will have the opportunity to present your argument. If you and your spouse both agree to the changes, the modification will be made without a court appearing being necessary.

How Does a Job Loss Impact Child Support Payments?

Child support payments are determined by the incomes of both parents, or the primary breadwinner if only one parent works. If you are responsible for making the child support payments and you lose your job, you must continue to make the court-ordered payments unless you file a motion to modify the child support and the motion is approved by the court. If you fail to keep up with the child support obligations, you may face serious legal and financial consequences. For example, the current amount owed will be added to the amount in arrears. In addition, if the unpaid child support continues to accumulate, you could lose your driver’s license and the court may issue a warrant for your arrest. This may also leave a negative mark on your credit report.

In New Jersey, either parent may file a motion to modify child support if there is a significant change in financial circumstances. However, in order for the motion to be approved, the changed circumstances must be unexpected and beyond temporary. For example, if you lost your job due to a forced layoff following a business closure, this would qualify as unexpected and substantial. The court will also consider whether you have any financial assets that you could use to meet your support obligation, including personal savings, retirement accounts, or a pension. The court will also want to see evidence that you are making an effort to obtain the highest paying job possible based on prior work history, recent salary, and professional skill set.

What if My Ex-Partner Becomes Unemployed?

If you are the dependent spouse and your former spouse loses their job, this may have an impact on your alimony payments and child support payments. While this can be a point of contention, it is in everyone’s best interests if both of you can be realistic about how the change in employment status will affect you and the children, and you should be open to negotiation. However, it does not mean that you should shortchange yourself or accept a modified alimony payment because your ex-spouse lost their job. Keep the following tips in mind if your former spouse becomes unemployed during the divorce settlement process or after a settlement has been reached:

  • Stay informed about any severance packages, pensions, or other sources of income your spouse may have access to if they claim to be unable to make payments after losing their job.
  • If your spouse was employed by a friend or family member and you suspect that the layoff is part of a divorce planning scheme, collect as much evidence as you can to prove your case. An experienced divorce lawyer can assist you with this process and ensure that you continue to receive the payments that you deserve.
  • Ultimately, it is in both of your best interests to handle a difficult situation with as much maturity and flexibility as possible. That may mean accepting a modified alimony payment for a specific period of time while your spouse with the understanding that your spouse will resume payments when they get a new job. If necessary, you may request that your ex-spouse follow a payment plan to ensure that you have the financial resources you need while they are job hunting.

Morristown Divorce Lawyers at Lyons & Associates, P.C. Assist Clients With Financial Issues Related to the Divorce Process

If you lost your job and you are considering a divorce, you are urged to contact one of our Morristown divorce lawyers at Lyons & Associates, P.C. We understand that a change in financial circumstances can make it very difficult to meet your financial responsibilities in divorce. Call us at 908-575-9777 or contact us online to schedule a free consultation. Located in Somerville and Morristown, New Jersey, we assist clients in Somerset, Woodbridge, Morristown, Parsippany, Rockaway, Short Hills, Chatham, Randolph, Madison, and Morris Plains.