D. Family Debts or Employment Expenses

• Author: Julien D. Payne - Marilyn A. Payne
• Pages: 333-335

Page 333

It is a well established principle that the payment of child support takes priority over the payment of debts. It is presumably for this reason that debts as a basis for deviating from the Guidelines have been circumscribed by the express provisions of section 10(2)(a) of the Federal Child Support Guidelines. In order to satisfy section 10(2)(a) of the Guidelines, the debts must satisfy each of the following three conditions:

(i) they must be of an unusually high level;

(ii) they must have been reasonably incurred; and

(iii) they must have been incurred in order to support the spouses and their children prior to the separation or to earn a living.⁸⁹

Having determined that undue hardship exists and that the standard of living in the debtor father’s household is lower than that in the mother’s household, the court must still determine whether any reduction in the applicable table amount of child support is warranted and, if so, in what amount and for how long. In dealing with this last issue, the court may have regard not only to the financial circumstances of the father but also to the amount of child support previously agreed between the parents. The existence of an unusually high level of debts does not entitle the father to pay reduced child support forever. The court may order the father to pay less than the table amount of child support for a specified time, after which the then applicable table amount of child support will become payable, with leave being granted to the mother to apply for a variation order if circumstances change, including any change arising from the father’s earning a substantially increased annual income or the alleviation of his debt problems by resorting to bankruptcy.⁹⁰An unusually high level of family debt, which exceeds the value of the family assets, may warrant an interim child support order in a lower amount of child support than the applicable table amount, subject to a reassessment of the issue of undue hardship after the family assets have been sold.⁹¹A court should not deviate from the applicable table amount of child support on the basis of alleged undue hardship within the meaning of section 10 of the Federal Child Support Guidelines in the absence of specific and cogent evidence as to why the circumstances constitute undue hardship. It is not enough to assert an unusually high level of debt; the debts must have been incurred to support the family prior to separation or to earn a living. Particulars relating to the debts must be provided, which might well include the annual costs of servicing the debt.⁹²

Page 334

A failure to alleviate debt problems, when able to do so, is an important factor for consideration.⁹³Debts reasonably incurred to earn a living may fall short of being unusually high, having regard to the income of the debtor and his or her current spouse.⁹⁴Whether outstanding family debts create undue hardship so as to satisfy the requirements of section 10 of the Federal Child Support Guidelines largely depends on the debtor’s level of income.⁹⁵

The assumption of a substantial family debt load by one spouse may be of little or no...