Colorado Divorce: Financial Obligations and Covid-19

By: Jessica A. Saldin

The ever-changing environment caused by the COVID-19 pandemic has had a negative effect on jobs, wages, and our economy. Like elsewhere, the Colorado economy, job market, and people’s ability to pay for things has taken a huge hit. the financial downturn, some people may be left questioning what impact, if any, COVID-19 has on their financial obligations flowing from their divorce and child custody cases. Specifically, they may question if it impacts their child support obligations, their maintenance (alimony) obligations, or their obligations to pay out property settlements.

The quick, and unfortunate, answer is that there is no immediate relief from these obligations due to COVID-19. Colorado has not passed any legislation or orders that alter the law related to child support, maintenance, or property/debt divisions. Therefore, if you are under a current order to pay child support, maintenance, or related to property or debt, those orders the laws remains the same. However, if you have family law case obligations and have suffered financial setbacks such that you are not able to meet them, there may be things you can do.

Generally, if child support and maintenance payments are due and unpaid, they become final money judgments. Meaning if you have an order to pay child support and/or maintenance, and you miss a payment, the other party can take steps to enforce the non-payment as a judgment (such as garnishing wages or placing a lien on property). Unpaid support amounts also start automatically accruing interest.

This doesn’t mean that you are stuck with your maintenance and child support payments long-term. The law allowing modifications still remains in place. Specifically, you can file a request with the court to modify maintenance and/or child support as long as there has been a substantial and continuing change of circumstances. The key to the modification statute is the change of circumstance must be both substantial and continuing. Therefore if, for example, you are employed by a business that is temporarily closed due to the pandemic and, therefore, your income is temporarily suspended, you have certainly suffered a “substantial” change in circumstances. However, the change must also be “continuing.” There is no hard, fast rule as to what “continuing” means. Some industries may rebound fairly quickly. Conversely, some jobs may never return. If you have been out of work for a month or two, with no prospects to get a new job or reclaiming your prior income level, that is probably enough to meet the “continuing” threshold.

Modifications of child support are generally applied retroactively to the date a motion is filed. Thus, there is a balancing act between waiting long enough to meet the “continuing” threshold, yet not waiting too long to file your motion. Keep in mind that even if you are not in a situation in which modification is appropriate, it is unlikely, given the current economic climate, that a court would punish you if you are unable to pay. They key is availing yourself of your legal rights and making the right moves at the right time. If you are unable to pay, the obligation still stands and doesn’t go away, unless the original orders are modified. Additionally, sometimes the child support recipient may also need to seek a modification based on a reduction in their income. The same rules apply for both payer and payee.

Another consideration is whether your maintenance is even modifiable. Unlike child support, which is always modifiable as long as there is the substantial and continuing change of circumstance (defined by law as having at least a 10% change on child support), maintenance can be made non-modifiable by agreement of the parties in a divorce. If your divorce ended with the judge ordering a monthly maintenance amount your spousal support will be modifiable. However, if you and your spouse entered into a final agreement regarding maintenance, you need to take a careful look at that agreement to make sure there is no language indicating it cannot be modified. If your maintenance is non-modifiable, you will still owe the obligation, yet may not be at risk of court punishment if you can show the missed or reduced payments were due to job loss or reduction in income.

The downside of pursuing these modifications is that they are not immediate. While the court can modify child support and/or maintenance back to the day a motion is filed, it may take several months from filing to getting a court order. Hearings are usually set several months after a modification motion is filed. With court’s being closed or only dealing with emergencies due to COVID-19, it could take even longer than normal. During the waiting period you still need to use best efforts to continue making your payments.

Finally, people that are under orders to pay property equalization payments or other property settlements may question what, if any, effect COVID-19 has on their orders. Perhaps you have orders regarding payment of certain debt. Much like child support and maintenance, there are no orders or new laws suspending marital property or debt orders flowing from your divorce. Unlike maintenance and child support cases, the road to modifying property equalization payments or other property provisions is even more difficult. These types of orders can only be modified if the court finds the existence of conditions that justify the reopening of a judgment. Depending on the situation, COVID-19 may be such a circumstance. Perhaps you are unable to get your home on the market in time or pay on certain credit cards. There may be relief to be sought from the court. Each case is different and dealing with marital property and debt is not as formulaic as with support obligations.

Ultimately, if you and your former spouse or partner are experiencing financial difficulties due to COVID-19 and agree to a modification or temporary suspension of financial orders, you should reduce the agreement to writing, get it signed, and filed with the court to ensure it is binding and enforceable. If you’re not able to agree on relief it might be time to consider consulting with a Denver family law lawyer to assess your options moving forward.