The Child Support System Is Broken- Part 3 The Underbelly of Child Support Collection Programs

The Child Support System Is Broken- Part 3 The Underbelly of Child Support Collection Programs

August. The dreaded time for kids to go back to school. Most kids hate it. But, you love it for the peace and relaxation that lies ahead. But, for many, August is the child support system Awareness month. Yeah, that’s right. The states have instituted a Child Support System Awareness month to educate and focus their efforts to collect child support arrears from what many believe are ‘dead beat dads’.

The Child Support System’s Child Support Awareness month was started back in 1995 by states and municipalities across this great land. But, the implementation of this plan was one more focused on funding the STATE than funding needy parents in want of child support arrears.

The truth is in the numbers, so leave your emotions at the door!

The Child Support System – Every State Wants A Piece of This Action

You can’t avoid the emphasis on deadbeat child support collections dominating the news this month, second only to the Olympics. Here are a few of my favorite headlines, filled with biased, emotionally charged wording:

– “Texas Cracks Down on Deadbeat Parents”

– “New Jersey Rounds up 1221 Deadbeat Parents Owing $25.4M”

– “New Mexico Governor Announces Crackdown on Parents Failing to Meet Child Support Obligations”

Even the Feds have a Deadbeat Parent Punishment Act to catch parents who move from state to state to avoid paying up.

News outlets revel in hyping the national tragedy of unpaid child support exceeding $100 billion. Very often though, they leave out the details behind these numbers – important details!

First, this is the total running tally of unpaid support since data was kept, meaning decades of debt. The children owed the first $1 million of this figure are likely parents or even grandparents themselves now!

Parents Can’t  Pay From Behind Bars

The first article in this series covered how much of TODAY’s unpaid child support is actually accumulated by people in PRISON, who with their almost zero dollars income, are not likely to make those payments.

Even armed with this bit of common sense knowledge, the government is continuing to add up their debt while also piling on interest. Read the detailed article here.

The Numbers Will Blow Your Mind

Following the money, Part 2 of this series reveals how the National Department of Health and Human Services was responsible for the Enforcement Division of the collection effort. But wait! They also reported (through a separate division) who owed the child support based on annual income and the likelihood of collections.

Turns out, those making a livable wage owed only a small fraction of the total debt! The rest of the debt resided with those barely getting by, and this same federal agency labeled that debt as largely un-collectable! The shocking details are all here.

The Beatings Continue Regardless of Results

It’s terrible how so many parents out there are struggling to make ends meet at a poverty-level wages.

Both parents are struggling to provide for their children. Yet, instead of focusing on ways to educate parents to improve their job skills and wage potential, the authorities attack the parent who can’t keep up.

New Mexico, for example, as part of it’s annual crackdown on deadbeat parents, publicly lists the names of parents with delinquent child support.

Are banks allowed to list all those who are late with their payments? A bank would probably be slapped with a huge lawsuit, but I guess the government doesn’t have to follow the same rules.

Where’s The Money – According to Uncle Sam

So where are these agencies focusing their efforts? You can’t nail it down for all states, but the Department of Health and Human Services provides a clue about where recoverable money resides for those in arrears.

HHS reports suggest that once a parent with delinquent child support made over $20,000 per year, their debt was mostly collectable. But, only 17% of the “deadbeats” fall into the collectable category.

The rest – the vast majority- had little or no income.

The data shows that about three-fourths of the debtors have no reported income, or make less than $10,000 per year! This income group is also categorized by this same agency as one whose arrears are virtually “un-collectable.”

But hey, this is where the debt resides, so the agencies choose to focus considerable efforts towards collecting child support debt from those that can’t afford to pay it!

It’s pretty clear how bloated the budgets are for federal and state collection and enforcement agencies. The government collection agencies could pay off the total child support arrears in the country in just a few short years with only their fat annual budgets.

The government collection agencies could pay off the total child support arrears in the country in just a few short years with only their fat annual budgets.

But these agencies are getting results, and their results are widely publicized in the news. As an example, let’s look at New Mexico again.

The Poster Child For Child Support Collection

New Mexico proudly received a national child support enforcement award for the “Most Improved System”.

This year, they are on track to exceed $140 million in back-due child support collection. That’s a pretty impressive number – that leaves out the crushing impact to those who pay into the $140 million.

The New Mexico Division of Child Support Enforcement has an annual budget of $34 million, roughly 25% of the collections. So, for every dollar the tax payers put in, they received four. Sounds good, but there’s more to the story.

The problem with just showing the raw collected amounts is traced to the Bradley Act in 1986 that allowed states to add interest to arrears. So how much of that $140 million is actually money that was due to the parent versus interest that goes to the state? The answer is not advertised, but we have great examples from real folks.

A Payment Scheme Like You Wouldn’t Believe

Recently, a reader shared his story. Let’s call him Joe. His kids are now grown and out of the care of their mother. He made scheduled child support payments until he hit hard times and missed some. Eventually, Joe got back on track and made payments until his kids were grown. Now he’s making his payments for the overdue amount. Joe pays $100 per month.

Sounds good. He’s paying his debt. Right?

The story gets ugly though, when Joe shares the breakdown of his debt payments. About $25 of his payment goes to his ex. The rest? $75 goes to interest on his debt and goes to the state. Yeah, they can charge interest, remember?

Math time! 75% of that collection goes to interest…only 25% to the parent. Apply that to New Mexico’s success story.

Just Suppose …

$140 million in collections…outstanding! 75% back to the state, or $105 million. So $35 million goes to the parent that’s due. Considering that their annual budget, invested by the taxpayers, was, $34 million, the result was only $35 million to the parents and kids that needed the money, the kids that needed school supplies.

That’s pretty close to a 1 for 1 ratio, meaning the taxpayers gave the state $1 and the state gave $1 to the parent in need. After that, the state made over $100 million profit from interest. This is interest collected from people struggling to meet their child support obligations, struggling to make ends meet.

We aren’t talking about making $100 million from creating an industry that provides products and jobs for the community resulting in taxes collected on industrial revenue. This is money “taxed” on the poor.

Essentially, the states are cracking down on struggling parents to fund their programs. The states are publicly vilifying struggling parents, while crushing them with insurmountable interest and debt.

Wouldn’t the agency funds be better spent by educating parents, improving their income, and then taxing their income? The kids would have a better quality of life and the state would be funded to serve the people, not turn them into indentured servants.

There’s Gotta Be A Better Way

We must create a better system. The money invested is clearly wasted.  Currently we are treating the symptom of the problem, missed payments, as criminal behavior. The state is spending countless taxpayer dollars to collect back due child support from those that can’t pay, as well as interest to pad the state’s bottom line.

We need a system to treat the cause of the problems. Unpaid child support is caused by low incomes, poor job skills, and skyrocketing child care costs.

Children of divorce will be better served if the funds budgeted for child support enforcement and collections are spent fighting the poverty cycle!

Are you fed up with the broken child support system?  What is your child support experience? Share your opinion in the comments below.

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The Truth About Child Support Arrears The Child Support System Is Broken, Part 2

The Truth About Child Support Arrears The Child Support System Is Broken, Part 2

Consider me frustrated, frustrated at ‘the system’ and its persistence in going after deadbeat dads and their alleged child support arrears. Don’t get me wrong. Real deadbeats are the scourge of the human race for not taking financial responsibility for their offspring. And, as the mid-term elections are grinding to a close these next couple weeks, I’m sure there will be many politicians proclaiming that the increase in households living below the poverty line is directly related to the increase in children raised in single parent households.

There are numerous websites that list and profile deadbeat dads in an attempt to identify them, expose them, find them and shame them into financially supporting their offspring. This is, among other things, no better than the public stocks located in the town square of our early American pilgrimage when those that broke the covenants of public reason and law were publicly displayed for rebuke and humiliation by the local citizens.

Many of these websites run public forums, and one such site run and supported by the Canadian Government has such a public forum as well. So, I joined in on the discussion about going after child support arrears.

Everyone was applauding the site and its goal when I arrived onto the forum. I chimed in and mentioned the first article in this series (which the forum managers removed shortly thereafter, but whatever) that plainly lays out the facts behind the myth that dead beat dads are the best un-tapped source of income for children living in poverty.

Note: Haven’t read it? No prob! Check it out here.

None in the forum knew how many so called “no-loads” were actually in prison with no chance at making an income. Even with that knowledge, many didn’t care. I received strongly-worded counterarguments about the many dads who hide income to avoid paying to support their children.

If you’ve read my work, you know how much I just love broad generalities and hyperbole! So, I moved the throttles to afterburner and asked about the moms who refuse to get jobs to artificially keep their incomes low to increase their child support award. My question also had no basis in fact, but since I was “discussing” grown-up topics with folks who weren’t, why not poke the bear!?

Cutting through the emotions, a real question emerged: What about parents with past-due child support arrears who aren’t in prison? Why aren’t they paying?

An excellent question, it turns out! And the FACT-BASED answer is the purpose of this article!

Breaking Down Child Support Arrears

The reality of over-due child support is shocking. In my previous article, I estimated the figure is at over one-hundred billion dollars!

Granted, that’s the total over decades, but armed with only that knowledge, it’s easy to fall into the trap of assuming we can go get that money and win the war on poverty.

The breakdown of the debt, though, crumbles the walls of that belief like a Christmas gingerbread house left out until May.

WARNING! REAL FACTS AND DATA AHEAD. IF YOU DON’T LIKE THESE, DON’T READ!

The US Department of Health and Human Services reports:

  • 40% of that hundred-billion-dollar pie belongs to people with NO INCOME! No income, as in zero! It’s a difficult source from which to pull, at best.
  • 30% is from individuals who make an annual salary anywhere from $1 (so that’s actually something) to $10K
  • 21% is owed by those who rake in an annual sum of $10K to $30K
  • And only 9% comes from people making over $30K

Remember that these individuals also need to sustain themselves!

Unfair Interest Rates on Child Support Arrears for Low Earners

I’ll save the debate on minimum wage for another series. But let’s at least consider the current system’s implications.

Some states have a higher minimum wage, but the federal minimum is $7.25 per hour. For a full-time, 40-hour-a-week job, that’s just over $15K per year or $1,257 per month.

Out of that comes food, lodging, health insurance, transportation, clothing, etcetera. There’s not much left after that. Most who live on that salary will tell you zero is what’s left over.

Our child support system is designed so that both parents are tasked with supporting their children. And both should!

For many reasons, our system built up an enforcement network over the past decades to seek out and collect child support arrears. The problem was only compounded by the Bradley Amendment of 1986 that allowed states to add interest to those arrears.

Think about that for a minute.

We have people out there struggling to get by on nothing (or almost nothing) themselves. When they fall behind in child support, we pile on interest to their debt? How do we expect them to dig out of that hole?

The Government has been very willing to attack predatory credit lenders that impose egregious interest rates on the poor. When the housing market crashed, the Government attacked banks to renegotiate the terms of the horrible loans that families struggled under.

This same Government, though, is charging interest to poor working parents who can’t meet their child support obligations. We all know what it’s like to struggle to meet our bills. For these parents, the pain never ends. It’s a constant shell game to keep creditors and bill collectors satisfied just to make it through to the next month, sometimes even the next meal.

Child Support Arrears Collection Forecast

Some parts of the Government recognize how unlikely these debts are to be collected. Ironically, the same organization, the Department of Health and Human Services, reports their estimate about how much of the outstanding child support debt will be collected after 10 years.

  • 100% of the debt owed by those who earn >$30K annually will be collected
  • 50% of the debt owed by minimum wage earners will be collected
  • <25% of the debt owed by those making <$10K annually will be collected

I’m not presenting new math or even a new concept. The phrase “You can’t get blood from a turnip,” has been around for a long time. Yet we continue to bring up these parents as sources of income to solve the overall problem of children living below the poverty line in America. We spend a hefty chunk of change in tax dollars to go after these debtors.

How much does a federal enforcement bureaucracy cost per year?

Federal agencies don’t collect the debt themselves. Instead, they study the data and guide policy. The state enforcement agencies are actually charged with collections. So figure into your estimate another 50 collection and enforcement agencies in addition to the federal agency.

What did you come up with?

Remember how I told you the total child support arrears in America exceeds $100 billion dollars? Turns out, the federal Office of Child Support Enforcement works for the same federal agency I keep harping on, the Department of Health and Human Services.

That division’s annual budget is public record and has been pretty steady for the past several years, around $4 billion EVERY YEAR!

Take that number and add in an agency for each state!

Want an example? California’s child support agency’s annual budget: $1 billion. That’s a big state, so assume most are 75% of that number. You end up with an estimate for state fiscal commitments around $37.5 billion. Add in the federal agency and you get $41.5 billion!

Seems to me that if you eliminated these agencies, you could cover the decades’ worth of debt in just under 3 years!

Final Thoughts

What if you cut the enforcement side of all those agencies completely? Take a portion of those funds and apply them to education programs for parents to help them get better jobs.

The same federal department I’m annoyed with myself for repeating shows that if individuals can earn over $30K per year, they have an almost 100% chance of making their payments.

If the real goal is to end child poverty, let’s attack it from all sides! There are 2 parents and both need to support their child.

One is tagged with paying child support. For those who can’t make their payments, help them get just twice above the minimum wage so they can. At the same time, we can help the parent receiving the child support earn a better wage and get more affordable child care while working so they can work full-time.

The result would be greater income for BOTH parents, which only benefits the children.

Assuming we only had about 15% of that annual budget, or $6.2 billion, do you think we could stand up a good program with the goal of increasing employment and eliminating (or at least decreasing) child poverty? Or is it better to keep spending our tax dollars on federal and state agencies tasked with collecting debts that THE SAME AGENCY ruled un-collectable!?

Let me know in the comments!

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The Child Support System Is Broken, Part 1 Men in Prison Are Crushed by Accumulating Child Support Debt

The Child Support System Is Broken, Part 1 Men in Prison Are Crushed by Accumulating Child Support Debt

So, you’re incarcerated. You’re in prison for crimes against the state and society in general. But, can the state ever believe that while incarcerated you could still pay your child support obligations to your spouse or ex? Frankly, it’s clear, the child support system is BROKEN.  PERIOD.  Who in their right mind can reasonably expect an incarcerated prisoner to pay their $100 per week child support obligation when they earn, on average, $0.86 per hour, down from $0.93 in 2001?

But, according to the Office of Child Support Enforcement, Division of Policy and Training, “about one quarter of states treat incarceration as “voluntary unemployment” and refuse to allow prisoners to seek adjustment of their child support obligation. However, a new ‘Final Rule’ prohibits states from refusing an inmate from modifying a child support order.

Thank God the other remaining states permit incarcerated individuals to request a modification to their child support order. Each state has different rules and standards for this, but, for the most part, one must only show a substantial change in circumstances. That alone should be a low hurdle for most incarcerated individuals. Of course, he must still take all the necessary steps through the bureaucracy to make it happen.

And, their obligation continues during the modification request process.

Still…Incarcerated? That’s their problem!

On the surface, having a limited concern over the child support induced debt buildup for those who can’t follow the law may make sense. However, when you look at the numbers, it really is shocking.

Because the child support system is broken, these men leave prison $20,000 in debt, with no job, and almost zero prospects. Incarceration is supposed to be the punishment. When the time is served, the punishment is over and the crime behind them. These fathers are trying to get back into society and rejoin the workforce.  Where does that debt leave them? Look at the numbers:

  • Minimum wage monthly income at 40 hrs a week (before taxes): $1,200
  • Child support payment including arrears (5 yr loan, 6%): $387
  • Remaining: $813

To pay down their debt, they have to lose >30% of their income. After that hit, they still have to pay their current child support obligation. One can quickly see how they have no hope of meeting their living needs, paying off their debt, and meeting current child support obligations!

Factor in court-ordered wage garnishments of up to 65% to meet child support obligations (not counting your debt) and you can see how hopeless the spiral becomes. After the garnishment, they’ll likely have their driver’s license suspended, reducing their access to resources to get to work. After that, bank accounts get frozen

With all these obstacles, it is easy to see why most guys give up and never pay again. Eventually, they back away from their children.

So what? How does that affect a law abider like me?

It affects you by perpetuating the poverty of these children in our country. Government assistance for single parents was reduced in the 1990’s to shift the emphasis and responsibility onto the child support system and the non-custodial parent.

While it makes sense on the surface, but fathers in prison can’t pay child support. 

Multiple studies have proven again and again that there’s a huge benefit to children from having both parents involved in their lives. The only solutions available to newly released dads are either taking on additional jobs or returning to their old criminal activities. Additional work greatly reduces the time they can spend with their children can create problems for the kids later when they are adults. Returning to crime clearly is not the solution, but studies show it is what’s most probable.

There is the third option which almost guarantees they will fall behind in current obligations, further exacerbating the struggles of the children.

If they can’t pay, who will?

There’s only one pot of money for these struggling families: State or federal support, so back to tax payer. As a tax payer, you are funding a huge government agency tasked with enforcing child support obligations. But at the same time you, like it or not, are also funding support to these families anyway.

This is the very support we were supposed to reduce or eliminate through child support enforcement. Instead, we just created another government agency that only increases the total cost of tending to the original issue.

There are new programs being developed and pursued by many states that recognize the problem with the current approach. These states are forgiving debt, offering employment assistance to the dads coming out of prison, and training for both parents to assist them in navigating the current job market. Maryland, as an example, offers a staggered debt forgiveness program. The actual amounts forgiven are calculated based on a series courses and training designed to help dads in these situations find and retain work. The results of are impressive and should be mirrored by the rest of the nation.

The Child Support System Is Broken-1How much of the unpaid child support is this?

Incarcerated people fall into the category of those with no reported income up to $10,000 per year. A 2007 study by the Department of Health and Human Services estimated that about 25% of the no-wage earners in this category were incarcerated. No-wage earners account for 40% of the unpaid obligation debt in this country.

To put real numbers to the problem, there are 2.2 million people incarcerated this year. Half are parents, and a little over 1 out of 5 has a child support obligation, or 440,000 people. The zero wage earners account for around $40 billion of the total unpaid obligation!

Do we really think we are going to solve the poverty problem by leaning on that group to somehow come up with money they not only don’t have but are purposefully kept away from earning? What does it take to get the limited government resources shifted to groups that can actually help bring these dads back into working society and become active participants and fathers for their children?

It seems clear that when you hear the news media lament about how the total amount of unpaid child support in our country exceeds $100 billion that we could solve many of our poverty level, single-parent household woes by going after the deadbeats!

But what if the news media revealed the details behind the numbers and exposed the truth about how the bulk of this debt resides on the shoulders of American fathers who, themselves, exist below poverty standards?

In this three-part series, I’ll reveal the whole story to show the reality of life for these so-called “deadbeat” dads and how the child support system is broken on many levels that continue to exacerbate the financial problems of not just single-parented children, but also the support-paying parent as well.

Why Does this Matter?

There are three main reasons why we all need to be concerned about the state of children living in single parented households below the poverty level:

  • This is the United States, a beacon of hope and prosperity in the world. The fact that statistics continue to rise in the wrong direction clearly identifies a problem. Here is an area where we are failing this group within our population. It’s a slight on our founding beliefs and a stain on our reputation throughout the world.
  • Like it or not, the support and sustainment of these kids hits your wallet through welfare, school reduced lunches provided by local taxes, and the wide array of other programs in your area to help them.
  • Their plight is pinned on the non-payment of child support which taints the opinions of lawmakers and enforcement agencies nationwide towards ALL child support payers, even those of us that always meet our obligations.

With single-parent child poverty on the rise, child support became the main focus to ensure the other parent assisted in paying for the children’s well-being. Over $24 billion dollars is collected and distributed annually in child support. Even with this large amount paid, the total unpaid obligations are estimated in excess of $100 billion.

The gap in child support obligations versus collections led to the Child Support Recovery Act in 1992, and then it’s emotionally labeled amendment in 1998, the Deadbeat Parents Punishment Act (I’m not making that name up). The goal of these laws was to increase the likelihood of payment to reduce the drain on the welfare system.

The country was fed up with deadbeat parents and with having to pay for their kids through welfare. Emphasis was heavily placed on awarding child support in divorces and paternity cases, and laws were passed with strict punishments, including jail, for parents who didn’t keep up.

Decades later, we look back and wonder if these laws worked? No, the trend is still bad for these kids. The statistics for single-parent raised children are eye-opening. Almost 4 out of 10 children are born to unwed mothers, with a total of 17.4 million children raised without a father. Half of those children live below the poverty line.

If you aren’t especially saddened by the fact that this occurs in the US, and that isn’t enough to concern you, then the impact on your wallet, based on the second and third points I mentioned above, should.

Who gets impacted?

Everyone feels the pain to support children living below the poverty level through their taxes. For those who pay child support, the majority are the dads. Just over 82% of custodial parents are the mothers.

The child support-paying dads fall into one of three categories:

  • Sustainable wage earners
  • Poor
  • Incarcerated

With these being the three categories of child support paying dads, they are also the three categories of deadbeats. Those in jail, not surprisingly, have a difficult time making their payments.

The Bottom Line

As my father, and many like him, always said, “You do the crime, you pay the time.” Piling worthless, noncollectable debt on prisoners for back-due child support, though, almost goes against the cruel and unusual punishment stance our Constitution outlaws very clearly. As this series progresses, you’ll see the vast majority of the remaining portion of the unpaid child support debt falls into a similar, noncollectable category of parents. It’s time to recognize the flaws and that the current child support system is broken. Once we do that, we can head back to the drawing board and come up with real solutions to help these kids.

Think our child support system is broken? Where do your stand on the matter? Let us know in the comments!

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Ranking the Greatest and Nastiest States for Alimony What You Should Know About Alimony Before Getting Married

Ranking the Greatest and Nastiest States for Alimony What You Should Know About Alimony Before Getting Married

Alimony may have had its place in divorce, but far too often it is like a punishment for men. In a world where women continue to gain more of a percentage of the workforce, the need for alimony continues to come under fire. Some think alimony has traditionally been used as a way to get men to stay in a marriage they possibly did not want anymore. Whether true or not, thankfully, many states are changing those medieval modes of thinking about spousal support!

The Greatest Alimony States for Men

Georgia:

Georgia has some of the best laws in the country in regards to knocking out alimony from the divorce equation. Sometimes you have to wonder if they named it the Peach State after their alimony laws.

While some alimony can be ordered, usually it is not. They keep trying to improve their laws related to alimony, but as with legislation, it is difficult to cover all contingencies, like this one related to trust protection exclusion related to alimony.

Additionally, if the spousal payee committed adultery, they are barred from alimony payments altogether.

Texas:

Texas is one of the hardest states to get alimony payments in the country. It often is just not awarded at all.

The only downside is that the Lone Star State is a community-property state. Wealthy breadwinners beware! Property gets split down the middle.

Nevada:

The land of quickie marriages and divorces!

While this might not be the place where you make your last stand with your ex in a long, drawn-out battle, it can go very well in short, somewhat amicable divorces.

Note: Nevada is also a community property state.

Alaska:

Alaska has a non-monetary contribution to the marriage where marital fault may also be considered. But, this could be a double-edge sword.

If your wife contributed to the marriage by raising the kids, then, maybe it’s not so good. Conversely, if she cheated, the alimony gets booted.

New Hampshire:

Like Nevada, New Hampshire has a quick divorce turnaround time. While this does not always help with the alimony, it does give a failed marriage finality, faster. Then, you can move on with your life.

New Hampshire doesn’t just look at the usual things (earnings, children, education, etc.) but also each spouse’s earning potential outside the marriage.

Fault weighs heavily there, too, as does each spouse’s contributions to their joint properties.

The thorough examination is based on need and not a predetermined formula that might unfairly hurt the paying spouse.

Alabama:

In Alabama, the paying partner’s economic conditions are considered and weighed against the other spouse’s financial needs.

Alimony is ordered on a time frame, and ends:

  • Upon the death of either the payer or recipient,
  • When the recipient remarries, or
  • If the recipient moves in with a new mate

Cohabitation is important because (as you will see below) it means the receiving spouse cannot get away with receiving alimony payments for years while living with a new partner.

Delaware:

Delaware has some factors judges use to determine whether alimony is paid, and for how long.

Alimony is awarded for half the length of a marriage in cases where the divorce comes less than 20 years after the wedding date.

After the 20-year mark, however, it can go on for life.

Kansas:

By far one of the simplest systems in the country!

Kansas says alimony can last for a maximum of 121 months after the divorce. But, the awardee can apply for, and be granted, an additional 121 months in payments. This only happens in rare cases, though.

Tennessee:

Tennessee is committed to rehabilitative spousal support.They encourage job training and education.

That doesn’t mean judges will not order alimony to provide long-term support. It just means that spouses cannot receive money without genuine need.

Utah:

Alimony awards ordered not to exceed the length of the marriage. Also, they stop spousal support upon cohabitation and remarriage. What guy wants to pay an ex to live with some new guy?

The Worst Alimony States for Men

California:

While California was the first state to offer no-fault divorces, they are also one of the most expensive states in the country when it comes to court-ordered support after divorce.

Randall M. Kessler, chairman of the American Bar Association’s Section on Family Law, told Alan Farnham of ABC News,

“Child support in California is typically 10 times what it is…in Georgia or Nevada.”

For that reason alone, California, you made it onto the list of nastiest states for alimony in the country.

New Mexico:

This state’s laws allow scorned spouses to bring suit against their former partner’s new lover.

Talk about holding a grudge!

Mississippi:

Meet the second state to coddle grudge holders! Hell hath no wrath like legislators in New Mexico andMississippi!

Here, too, a scorned partner can legally sue their former spouse’s new lover for damages. Potentially, a non-guilty party can be held responsible for someone else’s failed marriage. Love to meet the jilted lover who created that law!

New York:

New York is one of the slowest states to reform their alimony laws. They held out on legalizing no-fault divorces until 2010. The delay cost litigants thousands of dollars in wasted fees.

That is the heart of the matter. New York has not made it easy for men seeking divorce to move on with their lives.

Colorado:

Colorado does not care if one or the other party to divorce can adequately support themselves.

Instead, they use a formula they call “temporary.” It takes 40% of the higher income deducted by 50% of the lower income. It is not based on financial reality. This “temporary” formula often becomes the long-term, more permanent formula.

Furthermore, Colorado is a community-property state. That means all property is divided equally. So, you could lose half of your property and assets. And then, still pay out 40% of your income.

Imagine getting divorced three times!? Does that mean you owe 120% of your income to your ex?

Florida:

The best way to sum up Florida’s messed up alimony policies is through the story of Debbie Israel.

The 47-year-old college math teacher from Miami refuses to marry her fiancé because of the state’s alimony for life laws. Once they get married, she will have to give a percentage of her wages to her would-be husband’s ex-wife as part of his household, permanently.

Yep, this makes Florida one of the nastiest states for alimony in the country.

West Virginia:

They almost didn’t make the nasty list. Their laws regarding marital misconduct ensure no adulterer, convicted felon, or spouse deserter gets awarded alimony.

But they do allow for the ordering of permanent spousal support. Were it not for that, they’d be on the nice list.

New Jersey:

The Garden State probably represents a lot of disheartening news for many spouses. They’re one of the last remaining states where permanent alimony is a possibility. While the system is equitable, permanent is not a sound way to set up alimony for couples who were only together for a few years.

Vermont & Connecticut:

I know I’m going all broken record here, but the thought of paying alimony in perpetuity stinks! It is with that thought in mind that I welcome Vermont and Connecticut to the list of nastiest states for alimony.

They round out the list of the worst 10 for that particular reason.

Final Thoughts

Residing in the right state is not a Get out of Jail Free, alimony card. However, it can significantly reduce your expenses over time.

While many of us can’t just pack up and move to a different state whenever we want, even if for more favorable alimony environment, we can have influence over the working situation in our home. The key reason for alimony across the country is to provide support while a non-working spouse re-enters the workforce. If both spouses work throughout the marriage, or definitely the years before the divorce, the alimony claims reduce significantly.

Alimony laws in this country ultimately vary from state to state. Pay attention (Now!) to the laws in your state before you get married. Make sure you will not get the screw when (and if) you divorce.

Make sure you’re with someone with whom you want to spend your life. Being sure is a much better alternative to being sorry.

How did your state shape up? Let us know your thoughts in the comment section below.

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What Every Guy Needs to Know About the Financial Side of Divorce Prepare Yourself Before Its Too Late

What Every Guy Needs to Know About the Financial Side of Divorce Prepare Yourself Before Its Too Late

Divorce is like an emotional hurricane. It’s hard to think straight in the middle of the emotional storm, and it’s normal for your financial frame of mind to blur when going through a divorce. But no matter your stress level or your fuzzy frame of mind, it’s extremely important to prepare yourself for the financial side of divorce.

Your divorce is going to result in decisions that will have a huge impact on your finances both now and in the future. Don’t wait until you’re mid or post-divorce to figure out the costs. This can lead to unwanted surprises. But being prepared ensures you won’t be financially devastated as you move forward.

8 Tips To Help Handle the Financial Side of Divorce

  1. Get Educated about the Financial Side of Divorce

Your finances is an important element that you naturally think about in the break-up of your marriage. Divorce is stressful and traumatic, and with emotions running rampant, you’re likely not going to be thinking clearly during your divorce. But you need to be educated about the costs that come along with your divorce, and get yourself ready to deal with them.

From lawyers and experts, to real estate agents, financial planning, and therapy, costs can range between $10,000 to $20,000. If managed properly, the cost can be considerably lower. Whatever the case may be, make sure you’re prepared for the cost of your divorce by educating yourself.

  1. Know Your Financial Obligations

If you have children, you’re likely the one who’s going to pay child support.  If child support is part of your divorce agreement, you are legally obligated to pay it. Some guys who are supposed to pay child support don’t pay it or don’t pay it in full, which is a legal no-no. The well-being of your children should come first, and the amount of child support that’s decided by the court or mandated by the state is what you’re obligated to pay.

Always pay your child support in full. If there’s a significant change in your financial situation or in your custody agreement it can be adjusted. But, until then, you should pay what is required. Child support pays for everything from the basic necessities of life like food, clothing and housing, and may include child care, education fees, medical expenses and extra curricular activities. If you’re concerned about the money not going to your children, try to find alternate solutions where you can pay service providers directly.

  1. Be Open to Alimony

Whether you chose to be a stay-at-home dad, or your ex chose to be a stay at home mom, be open to the possibility of alimony. Lots of guys are closed-off to the idea of alimony, not wanting to give the Ex a free ride. But, paying alimony for some short duration of time should also reduce your child support obligation.

Keep in mind, when you’re the one writing the alimony check, the alimony payments are tax deductible, whereas child support is not. Try offsetting child support, dollar for dollar, with alimony so a to take advantage of the tax savings.

  1. Do Not Hide Your Assets

Divorce can be scary, but the last thing you want to do is panic and move money out of your bank account and into hiding. If the money is found (which it likely will be), you’ll lose your credibility in court and won’t be trusted in any asset discussions. Worse, you may be penalized by the court for your deceit.

Revealing your assets is a legal requirement of all divorcing couples, so disclose everything that belongs to you and don’t hide anything. On top of not being trusted in court, you could be ordered to pay your ex’s attorney fees or the court may even award her all of your undisclosed assets.

  1. Track the Money

You should locate all of your marital financial resources to help ensure your future. This includes everything from your bank accounts and assets to incomes, properties, retirement plan, vehicles, furniture, brokerage accounts, and insurance policies – everything that’s owned jointly and/or separately by the two of you. Then organize everything into 401(k) and IRA statements, employment retirement accounts, employment bonuses and stock options/awards, real estate holdings, insurance policies (those that have cash values), mortgages, house and vacation home appraisals, brokerage accounts, money market accounts and tax returns. Tracking your monetary assets now can help stabilize your financial situation in the future.

  1. Protect Yourself

There are many ways to protect yourself, your finances and your assets during the divorce process. Separate your non-marital assets – property belonging to you, such as gifts you were given, that are not subject to equitable distribution. Also, make sure to cancel any joint bank accounts and open individual accounts, but, be careful not to disproportionately take more than what is rightfully yours in the process. Check your credit reports from all three credit agencies (EquifaxTransunionExperian) and double check that all credit cards in your report are accounted for an/or cancelled. Get new credit cards in your name and close all unused credit accounts. You don’t want your Ex racking additional debt during the divorce process for which you may be held responsible

And don’t be afraid to talk to your spouse to get the information you need. It’s important you’re both aware of your complete financial situation and understand the debts you share as a couple and individually. To avoid unforeseen surprises, with the help of your attorney, ask for a full disclosure of all financial records and accounts and be prepared to share yours. Don’t forget to change your will (and beneficiaries), medical proxy, living will, and your brokerage account beneficiaries too.

  1. Create a Post-Divorce Budget

Your post-divorce life is going to look much different than your life did when you were married, and it’s important you prepare a budget to account for everything that may come your way. Every day expenses are going to change when you’re single, and if you have kids, you’re going to want to make sure you have everything they need to feel at home and comfortable in your new place.

It’s easy to just focus on divorce-related expenses like child support and alimony, but it’s key to recognize your new reality. Talk to a financial planner if you need to, and create a realistic and meaningful budget for your new single  lifestyle.

  1. Resist the Urge to Impulse Buy

It’d likely you did not initiate the divorce, but divorce always results in a sense of loss. You’re losing a big part of your life and it’s likely very devastating. People deal with loss in different ways, and sometimes we think, albeit illogically, that making a big purchase, like an expensive new car or a big new house will make us feel better.

Divorce is expensive. Your post-divorce life is going to come with new costs you won’t be accustomed to or prepared for. Resist the urge to purchase expensive items on impulse, especially within the first twelve to twenty four months of your divorce.

If you’re about to go through a split, don’t neglect the financial side of divorce. It may be the last thing you want to think about, but it’s crucial for your financial well-being.

What are your biggest questions or concerns when it comes to divorce financials? Write us and let us know in your comments below.

Fighting Over Money You Pay Your Ex Divorce Advice for Men on Child Support Disputes

Fighting Over Money You Pay Your Ex Divorce Advice for Men on Child Support Disputes

Are you outraged about the money you pay your ex for child support? Do you spend a lot of time wondering what she does with your money that doesn’t involve support of your children? Do your thoughts about your money and your ex consume a great deal of your time and energy?

Fighting over money can wreck relationships and is one of the most significant sources of post-divorce conflict too. If you find yourself caught in this trap, you can benefit from understanding painful triggers and how to decide when to fight over the money you pay your ex.

I have four tips for managing money issues successfully with your ex post-divorce. If you can set aside all of the preconceptions you bring to the table about your ex-wife and your money, and how it impacts the children, you can do this.

That’s asking a lot, but your children’s happiness is worth it.  You may need to re-frame the way you have been thinking of the ex since the divorce, but you can make the shift with some hard work and determination.

The first thing you can do is to recognize that money you pay your ex through child support is intended to equalize, to a limited degree, the homes in which the child lives. This means their mother may benefit from the child support too. This concept probably wasn’t introduced to you during your divorce negotiations, but makes it clear that it’s okay for an ex-wife to have some benefit from the child support payments. The idea is that when children have less disparity between the two households where they reside, it is good for them.

Also, your views about money should be considered. Have you always been a “cup half full” person? Do you worry that there isn’t enough to go around? Or do you always expect to have enough money but sometimes come up short?

Whatever the case, take notice of what you bring to the table regarding money, perhaps based on your childhood, and acknowledge it. Although you may want to think otherwise, your ex isn’t responsible for all of your money issues. You play a role in how you manage money, and how you think about money, and it’s up to you to take responsibility for this. If you can do that, and use the four tools below, you are well on the way to creating a system for keeping money in its place in your life and with the ex!

1.      Recognize It’s Good for Your Children If Your Ex Isn’t Struggling Financially.

Simply put, child support is intended to equalize income, to some limited extent, between homes. Whatever your “beef” with your ex, don’t make this one of them. You cannot control how she spends the money so let that go. Assume she, like you, is doing the best she can to take care of your children too.  If you’ve spent a long time believing otherwise, this isn’t an easy task. But, it’s an important one.

When you begin to let go of the need to “punish” your ex for perceived misdeeds of the marriage, or your divorce, it will help you to allow the space for her to move forward successfully too. The expression, “A rising tide lifts all boats,” applies here as your children are surely well served by having two financially secure parents.

2.      Stop Talking About Money All the Time

Start by paying what you owe on time and not commenting negatively, for one month, on any money issues. If there is a real problem, you will deal with that, as needed. But, not right now.  You should create a budget for yourself, including the money paid to your ex, and make a plan to live within it. If you consider the money paid to your ex simply part of your monthly operating expenses, rather than an unnecessary burden, it may be simpler to stop thinking about it all of the time. Take the steps necessary to limit focusing on it. That will help you and your children.

Also, free yourself from the repetitive mantra of, “She’s a witch and is spending all of my money.” Instead, if it’s impossible to see her as a partner in co-parenting right now, acknowledge, if nothing else, she has the kids when you don’t. It’s good for them to be happy and secure when they are not with you. Your money helps them. Period.

3.      Don’t Talk to Your Kids About The Money You Pay Your Ex

There are no exceptions to this rule. Just don’t. They won’t think better of you if you tell them the money is all yours or that you are the only one who provides for them. They love their mom too, and they should, and this only makes them uncomfortable and insecure. You must choose to prioritize your children’s emotional health over your own need to feel as though you have somehow been victorious over your ex. There are no winners when children are put between their divorced parents. Their esteem is tied to what you say about their mother too.

 

4.      Keep Your Disagreements Civil and Simple

You are well served to have a system in place to address disagreements that arise outside of court. Perhaps you can develop a quarterly reconciliation of expenses outside of support, preferably by email, that works for you. Limit your comments to the expense itself and do not infer intent in your communication with your ex. It doesn’t solve the problem and is likely to only heighten the conflict.

Think carefully before escalating the dispute to the legal arena. It is much preferred, for the benefit of your children, to consider mediating expense conflicts outside of court. As a last resort, take your disagreement to court. Of course, if your income changes and modification of an order is necessary, you may need to use the legal process. Just remember to keep it matter-of-fact and don’t make it personal to your ex. She has her own money pressures and adding your negative energy will only hurt your children.

You are Your Kid’s Example

You can decide when to fight over money you pay your ex. Knowing when to let it go is likely the most important thing you can do for your own well-being and to take care of your kids. Recognize when you are triggered by money and your ex and always take a pause. Use the four tools above to limit your unnecessary interaction with your kids and their mother over money and make a plan to address when there is a dispute. You have a choice and can only control how you behave. Make sure you do to benefit you and your children, now and into their adulthood. Teaching them how to manage money, even when it’s difficult will help them now and long into their future. It’s really up to you!


(c) Can Stock Photo / AndreyPopov

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