Bankruptcy Does Not Releive Spouse From Paying Alimony or Parent From Paying Child Support

During these difficult economic times, and especially in Arizona, divorce attorneys often hear from  clients that their spouse or significant other has told them “You won’t get one dime of alimony. I’ll file for bankruptcy first.” The threat has been repeated countless times.

Don't buy into it.  Neither alimony obligations nor child support obligations can be changed by a bankruptcy court from what family court ordered.

However, to be safe many bankruptcy attorneys recommend filing a nondischargeability complaint in the bankruptcy case to ensure notice and protection of the receiving spouse’s interests.

And if there are arrearages in support, the spouse who is owed back-support is actually at the top of the list of creditors. Back support obligations come off the top of the “bankruptcy estate” (what the bankrupt spouse has left).

For more information, check out the article written by Sally Heirgstad, "Bankruptcy doesn't absolve spousal support payments."

Spousal Support - What The Arizona Court of Appeals Is Thinking

Arizona Spousal Maintenance Alimony Lawyers Attorneys FirmMore about Naseman.

As we know, Husband and Wife, married 11 years at time of the filing of the petition for dissolution of marriage, initially resided in Massachusetts.  However during the third year of their marriage Husband purchased property in Arizona and the parties subsequently moved here. Prior to the marriage, Husband who had accumulated substantial wealth and property was already retired; however, 6 years into the marriage, he returned to work. Wife owned her own business prior to the marriage, a bridal shop in Massachusetts, which was sold 3 years prior to the filing of the action. She then operated a business that provided cellulite reduction treatments and facials. (Wife was obviously savvy choosing to get into this line of business in Arizona.)  Trial was held in 2006. The Arizona family court awarded Wife spousal maintenance of $4,200 per month for 6 and ½ six years. Additionally, the court explained that rather than increasing Wife's spousal maintenance, it would allow Wife to keep furniture she removed from the Arizona home. On appeal Husband contests the amount and duration of spousal maintenance awarded.

Spousal Maintenance

In this case, the Family Court did list all of the factors pursuant to A.R.S. § 25-319(B), issued findings under each, and concluded spousal maintenance of $4,200 per month for 6 and ½ years was appropriate because it would “allow an adjustment for Wife to raise her own income, or to moderate her return to a more standard lifestyle.”

Regarding Wife's financial needs, Wife presented two affidavits of financial information which indicated a range of monthly expenses from $5,000 to $6,200. At trial, she testified her expenses were approximately $5,000 per month. She also testified she had extensive debt. The court determined Wife was still building her current business and noted she currently makes only $150 per month. Additionally, the court found Husband had sufficient earnings to assist Wife, Wife's property will be modest, and Wife cannot live without assistance while she works on improving her business. The Court held that Wife's reasonable needs were sufficiently established through testimony and documentary evidence, and the trial court did not abuse its discretion taking this evidence into account when awarding $4,200 per month in spousal maintenance.  The duration of the maintenance award was also supported since a vocational expert's report indicated it would take more than 5 years for Wife to reach an income level that would enable her to experience a reasonable standard of living.

Husband argued on appeal that the parties' incomes contradict the amount and duration of the maintenance award. The Court disagreed finding that Husband's annual income averaged $250,000 while Wife’s $150.00 per month.

Further, the court appropriately considered evidence of the parties' luxurious lifestyle while married under A.R.S. § 25-319(B)(1). Wife explained that her lifestyle diminished significantly since the petition for dissolution. Husband did not believe his standard of living should be affected by the dissolution because his lifestyle predated the marriage and he funded the parties' way of life during marriage.

As Husband points out, however, the high standard of living was not solely a product of the marriage because the first 5 years of marriage were funded by Husband's sole and separate property. When Husband returned to work, the parties' lifestyle was funded by his wages as well as his separate property. Notwithstanding Husband's significant contributions of separate property, the court properly considered the relevant statutory factors, noting the marriage lasted 13 years and Wife's decision not to work was a “mutual decision” to accommodate the parties' lifestyle. Further, Wife reduced her earning ability by giving up the opportunity to develop her bridal business in Massachusetts because of the marriage and Wife would undergo a significant change in lifestyle. Nevertheless, the spousal maintenance award does not give Wife anything close to the luxurious lifestyle she had.

Household Furtniture & Its Effect on Spousal Support Award

Finally, although Wife admitted the furniture was Husband's sole and separate property, Wife requested additional maintenance if she was ordered to return the furniture. The family court was held to have properly exercised its discretion by noting Wife would have additional expenses if she had to return the furniture she was using.
 

Arizona Spousal Maintenance - Recent Opinion on Attribution of Income

Last Thursday, the Arizona Court of Appeals rendered an opinion in Pullen v. Pullen, wherein it decided how and when trial courts should attribute income to a spouse for purposes of calculating Arizona spousal maintenance.  

The Court of Appeals recognized that Arizona case law had previously only addressed this issue in the context of child support (e.g., Little v. Little).  The Court held that the reasoning of the Little court, to apply the intermediate balancing test in lieu of the strict rule test or the good faith test, applied equally in the context of spousal maintenance.  

The Court of Appeals went on to hold, however, that it is not possible to rely upon the holding in Little to determine what factors to balance in the context of spousal maintenance, because the Little court focused on the need of the child for child support.  Rather, the Court of Appeals enumerated five (5) factors, and held that trial courts should balance these five factors in addition to other evidence in determining whether to attribute income for purposes of calculating spousal maintenance.

The five factors are:

  1. The reasons asserted by the party whose conduct is at issue;
  2. The impact upon the obligee of considering the actual earnings of the obligor;
  3. When the obligee’s conduct is at issue, the impact upon the obligor of considering the actual earnings of the obligee and thereby reducing the obligor’s financial contribution to the support order at issue;
  4. Whether the party complaining of a voluntary reduction in income acquiesced in the conduct of the other party; and
  5. The timing of the action in question in relation to the entering of a decree or the execution of a written agreement between the parties.

For any questions regarding Arizona spousal support, contact Nirenstein Garnice Soderquist PLC and an attorney will discuss this information with you in more detail.

Arizona Divorce Law Primer

Arizona Divorce -- No Fault Jurisdiction.  According to Arizona divorce laws, you do not need to prove grounds in order to receive a divorce. The Arizona court will grant a petition for divorce on the grounds that there has been an irretrievable breakdown of the marriage. This is referred to as an Arizona no-fault divorce. Additionally, one of the spouses must have been a resident in the state of Arizona for 90 days prior to the filing of the petition for divorce in AZ.

 

Alimony & Community Property in Arizona.  Arizona is known as a community property state, which can be defined as any asset acquired or income earned by a married person while living with his or her spouse. According to Arizona divorce laws this means that the marital property must be divided fairly or equitably and without regard to marital fault. Separate property, or property owned prior to the marriage will be retained by the owning spouse. Spousal maintenance, also known as spousal support or alimony, can be awarded to either the husband or wife. Such factors as the length of the marriage, the parties’ prior living standard, etc. are considered in determining the amount and duration that should be paid and which is considered just. Marital fault may not be taken into account in this decision.

 

Arizona Child Support, Child Visitation and Child Custody. The main focus in determining child custody, according to Arizona divorce law, is the best interest of the children. However, under AZ divorce laws, the parents may submit a parenting plan with the request for joint custody. Visitation rights within reason are typically awarded to the non custodial parent. Child support (a percentage of the non-custodial parents’ income paid to assist with the support of his children) is determined by the Income Shares model, based on the gross income of both parents as set forth by divorce law in Arizona. Expect to pay child support until the age of 18 or until the child is a high school graduate.

 

To find out more contact www.ngslaw.com.

Arizona Family Law

About Nirenstein Garnice Soderquist, PLC

Nirenstein Garnice Soderquist PLC is an Arizona divorce and family law firm. Our hard-earned and highly respected reputation is built on years of practicing at the highest level of skill, compassion, integrity and versatility. Our partners and associate attorneys represent clients in diverse matters from divorce and child custody disputes to complex business litigation in the context of a divorce case to mediation or litigation and all associated facets of law.

With an intensely guarded reputation of excellence and track record of success Nirenstein Garnice Soderquist PLC has earned the respect and admiration of colleagues and opposing counsel alike. This prestige and standing in the legal community has positioned our firm to attract the brightest legal talent to best server our client's needs.

OUR PHILOSOPHY

We believe our clients are best served by a progressive "team representation" approach that emphasizes creative use of intellectual, persuasive and technical acumen. Depth and diversity in our attorney talent allow us to match your needs with the most skilled individual representation while also providing the benefits of the entire teams collective capabilities.

To ensure the most successful resolution for each client, Nirenstein Garnice Soderquist PLC collaborates closely with other professionals - including family therapists, counselors, corporate and financial advisors and clergy. This inclusive extension of our comprehensive team approach supports unique strategies that better meet each client's unique needs.

OUR COMMITTMENT

Your cause is our commitment. Every Nirenstein Garnice Soderquist LLP attorney is dedicated to tireless advocacy, reasoned decision-making and effective implementation of superior strategy and sophisticated techniques.

Every effort is made to achieve a successful resolution outside the courtroom. However, our attorneys will confidently step before the Bench to challenge opposing counsel - and judges - when doing so is in your best interest. In every circumstance we will passionately champion your rights.

Part of our role is to cut through the jargon, answer questions and clarify complex issues. We provide thoughtful counsel that allows you to make decisions with confidence while actively participating in the resolution of your case. We devote maximum effort to achieve maximum results while always striving to deliver in an optimum, timely, cost-efficient and practical manner.

OUR VALUES

We realize our clients have come to us to assist them in resolving delicate matters. That's why every case - every issue - is addressed with understanding and sensitivity.

We never forget that our clients are people who deserve dignity, respect and compassion.

We're mindful that those on the opposite side of the negotiating table - or the courtroom - may often be friends or family whom you never imagined you'd be speaking to through an attorney.

We respect the bonds of family and understand that disputes between siblings, parents and children, in-laws or other relatives require firm resolve tempered by delicate diplomacy if there is to be hope of maintaining or repairing familial harmony.

We understand that clients with children can never lose sight of the need to maintain their ability to collaborate with the other parent - now and throughout their lives.

We believe a strategic understanding of the law leads to new possibilities and innovative ways of helping clients minimize risk while maximizing progress toward their goals.

We believe each and every client has the justified expectation of our fullest commitment and resolve focused on achieving the broadest positive outcome on their behalf.

Please visit our website to find out more.