How does the Coronavirus affect maintenance and child support payments in Colorado? Clients are asking our attorneys this question daily.
The answer depends on your circumstances and whether the Coronavirus has impacted your business and income. For those who have lost their jobs, been furloughed, or lost their income, you may be able to modify your maintenance or child support obligation. However, the analysis can be fairly complicated, particularly now that Congress has passed the Cares Act. Those who have lost their jobs but have been reimbursed may not be able to show a “continuing and substantial” change in circumstances as required by Colorado law.
Coronavirus has brought unprecedented losses to the stock market, and many of the country’s most important industries have ground to a halt. This has already and continues to result in layoffs, furloughs, and business losses. Although the federal government is trying to stimulate the economy and the Federal Reserve has dropped interest rates to 0%, these responsive measures have done little to ease the recessionary pressures.
- During these times, our clients often ask us — “How am I going to meet my monthly child support and maintenance obligations?”
- Other clients ask us whether there is anything we can do if and when their spouse stops paying their court-ordered obligations.
Under Colorado law, both maintenance and child support orders are modifiable. However, to modify either amount, you have to file a motion to modify child support or a motion to modify maintenance. Both of these motions are brought under the same Colorado statute, which is C.R.S. § 14-10-122. To win a modification, the requesting party must show a changed circumstance so substantial and continuing so as to make the original terms unfair. Although slight increases or decreases in compensation do not always justify a modification, a “substantial” change such as a layoff, furlough, or dramatic change in income likely qualifies.
The key to these sorts of motions is to focus on the two keywords: (1) continuing and (2) substantial. To win, a temporary setback will not likely suffice. Workers that are furloughed or have lost their income for a short period of time may not be able to show that the change in circumstances is “continuing.” Moreover, workers who have been compensated by the government during their loss of employment may not be able to show that the change is sufficiently “substantial” to warrant a reduction. However, many industry analysis are forecasting long-term economic damage and therefore long-term changes in circumstances. For some industries, it may take years to recover from the economic consequences of COVID-19.
However, because the Coronavirus’ effects on the economy are so well-known, convincing a judge that the virus has caused a continuing and substantial change in circumstances may be easier than usual. Ordinarily, people seeking a downward modification of child support or maintenance are faced with a certain level of suspicion. However, if the Coronavirus caused business losses or reduced your income, the judge may not have much trouble believing you. For example, it would not be hard for an Uber driver or a bartender to convince a judge that their income has decreased as a result of the Coronavirus. Workers in industries such as travel are going to be affected for months and possibly years to come.
If You Want to Pay Less, you Have to File a Motion Earlier Rather than Later
The modification statute states that “any decree respecting maintenance may be modified only as to installments accruing subsequent to the motion for modification and only upon a showing of changed circumstances so substantial and continuing as to make the terms unfair[.]” C.R.S. § 14-10-122(1)(a). Under this rule, if you continue paying maintenance without having filed a motion, you cannot go back in time and ask for arrearages for all of the amounts you paid.
Because of this rule, if you have a change of circumstance due to the Coronavirus, you should act quickly to file a motion to modify so that you can request a reduction of maintenance for the payments made while the case is pending. Until a court orders that your obligation has officially changed, you continue to be obligated to pay the prior amount. The major problem is, however, the Colorado court system is having huge difficulty responding to the Coronavirus and many courts are closed except for emergencies. When the courts come back online, we expect the court system to be backlogged with cases that are piling up.
Griffiths Law is monitoring the court system closely. There are variations between each district (Denver, Arapahoe, Douglas, etc.) and variations even among judges. Some judges are continuing all hearings while others are happy to hold hearings by telephone or videoconference. If you need guidance about what the judge in your particular case is doing, do not hesitate to call us. All domestic relations cases in Colorado have a current judge assigned to them, even if the case is quite old.
Colorado Courts are Having Trouble Responding to the Coronavirus
Something else to consider related to the Coronavirus and modifying child support and maintenance is court availability. Currently, we expect the court system to have reduced availability in terms of the court’s ability to hear cases. In fact, some courts are completely closing. However, domestic relations attorneys predict an increase in the number of cases and litigation going forward.
For example, our law firm has already seen changes happening to parenting-time relationships as a result of school closures. These sorts of changes are leading to an uptick in case related activity. With the court having less availability and an increase in the number of cases being argued, the court system may not be able to handle the influx in caseload. We see domestic relations litigation likely increasing but the court system’s ability to handle those cases as decreasing. You may want to consider this and get in the Court’s “line” as soon as possible.
General Guidance on Modifying Maintenance & Child Support
While maintenance and child support calculations are relatively complex, a change in circumstance could be straightforward. That is, while precisely determining how much maintenance and child support you should pay may require a lot of work, it is fairly easy to conclude that a person who lost their job should be less. For an in-depth analysis, take a look at our Guide to Divorce’s chapters on maintenance and child support. These chapters will help you understand what you should be paying (or not paying).
For those of you that have not looked at your maintenance or child support obligation in a while, much has changed. For maintenance, the calculation is now based on net income rather than gross income. This is due to the Tax Cuts and Jobs Act of 2017 removing the tax deduction for payor’s of maintenance. However, if your obligation arose before the law changed, you can still modify your maintenance obligation as if it were still under prior law. The Tax Cuts and Jobs Act allows you to modify your maintenance obligation and still have it be tax-deductible so long as it was originally tax-deductible and ordered before the law changed.
With respect to current law, maintenance has a set of guidelines that go up to a combined adjusted gross income of $240,000. The maintenance formula, in general, is 40% of the party’s combined, adjusted gross income minus the lower-earning spouses’ income multiplied by a tax factor. For parties with a combined income of $120,000 or less, the result is multiplied by 80% and for parties with a combined income of $120,001-$240,000, the result is multiplied by 75%. This is to account for the fact that maintenance is paid in net, after-tax dollars and parties who earn more pay more in taxes. However, calculating maintenance or child support numbers on your own is often a bad idea as there are numerous variables. If you have questions about how to proceed, Griffiths Law is open and available to answer your questions.
Christopher Griffiths is a Shareholder and Chief Financial Officer of Griffiths Law—a law firm specializing in family law and civil litigation.