Alimony negotiation?

[Boogiewipes]

What is the name of your state (only U.S. law)? Illinois

6 year marriage


Pretrial just wrapped up and the judge said he was thinking guideline alimony of $3300/mo (30% of my gross) and $400/mo in child support (Illinois actually has the custodial parent pay support to the non-custodial parent at times). I was recommended as the custodial parent by the GAL and judge. STBX has a 4 year degree but was imputed no income due to bring a SAHM until the divorce started (I've had custody for over a year due to some issues STBX has). In Illinois, lifetime alimony is available after a 5 year marriage. The judge threw me a bone by recommending the alimony terminate at 2.6 years.

Here's my problem, that possible award only leaves me with $1644/mo to live on including paying back the $65,000 in debt this divorce has put me in. That's impossible. I would have to default on all unsecured debt or refuse to pay the alimony.

My debt service is about $1000/mo. Chapter 13 would be a similar amount of payment. I failed the chapter 7 means test. The only debt I have is legal fees on credit cards, arrears to my attorney and GAL, and court ordered attorney fees to the GAL and opposing counsel.

Assets are $200,000 in my 401k and two cars worth a combined $12,000. STBX already has the nicer car worth $10,000.


Is there anything I can do to encourage STBX to negotiate a lower amount? What's my strategy going forward?

I'm all ears for any options you see. I'm being forced into a situation where my daughter and I will have to survive via food pantries while my Ex will have the equivalent of a $60,000yr job to sit on her butt and continue her addictions. I'm having difficulty reconciling this.

 

[LdiJ]

What is the name of your state (only U.S. law)? Illinois

6 year marriage


Pretrial just wrapped up and the judge said he was thinking guideline alimony of $3300/mo (30% of my gross) and $400/mo in child support (Illinois actually has the custodial parent pay support to the non-custodial parent at times). I was recommended as the custodial parent by the GAL and judge. STBX has a 4 year degree but was imputed no income due to bring a SAHM until the divorce started (I've had custody for over a year due to some issues STBX has). In Illinois, lifetime alimony is available after a 5 year marriage. The judge threw me a bone by recommending the alimony terminate at 2.6 years.

Here's my problem, that possible award only leaves me with $1644/mo to live on including paying back the $65,000 in debt this divorce has put me in. That's impossible. I would have to default on all unsecured debt or refuse to pay the alimony.

My debt service is about $1000/mo. Chapter 13 would be a similar amount of payment. I failed the chapter 7 means test. The only debt I have is legal fees on credit cards, arrears to my attorney and GAL, and court ordered attorney fees to the GAL and opposing counsel.

Assets are $200,000 in my 401k and two cars worth a combined $12,000. STBX already has the nicer car worth $10,000.


Is there anything I can do to encourage STBX to negotiate a lower amount? What's my strategy going forward?

I'm all ears for any options you see. I'm being forced into a situation where my daughter and I will have to survive via food pantries while my Ex will have the equivalent of a $60,000yr job to sit on her butt and continue her addictions. I'm having difficulty reconciling this.

If 3300.00 is 30% of your gross income, then you have an income of 11,000 a month. Please explain how 11,000 a month ends up at only $1644.00.

Also, please note that alimony is taxable income to her and tax deductible to you, therefore you should adjust your withholding to reflect that.

 

[single317dad]

What is the name of your state (only U.S. law)? Illinois

6 year marriage

Pretrial just wrapped up and the judge said he was thinking guideline alimony of $3300/mo (30% of my gross) and $400/mo in child support (Illinois actually has the custodial parent pay support to the non-custodial parent at times). I was recommended as the custodial parent by the GAL and judge. STBX has a 4 year degree but was imputed no income due to bring a SAHM until the divorce started (I've had custody for over a year due to some issues STBX has). In Illinois, lifetime alimony is available after a 5 year marriage. The judge threw me a bone by recommending the alimony terminate at 2.6 years.

Half the duration of the marriage is a standard (not necessarily the only standard). 30 or so months doesn't seem excessive. Keep in mind the tax differences between alimony and support.

Here's my problem, that possible award only leaves me with $1644/mo to live on including paying back the $65,000 in debt this divorce has put me in. That's impossible. I would have to default on all unsecured debt or refuse to pay the alimony. My debt service is about $1000/mo.

Please describe the debt: when was the debt acquired; what is the nature of the debt; what did the debt pay for.

Chapter 13 would be a similar amount of payment. I failed the chapter 7 means test. The only debt I have is legal fees on credit cards, arrears to my attorney and GAL, and court ordered attorney fees to the GAL and opposing counsel.

Assets are $200,000 in my 401k and two cars worth a combined $12,000. STBX already has the nicer car worth $10,000.

Just to make sure I'm understanding this: You gross $132k a year, alimony and support would be $44.4k, debt would be $12k, taxes would be about $35kish. That should leave about $3383/mo for mortgage, utilities, and expenses. Without further information I'm not able to reconcile that with $1644/mo.

Is there anything I can do to encourage STBX to negotiate a lower amount? What's my strategy going forward?

Depending on the answers to the questions I asked about the debt, you may be able to hang some of that responsibility on her, or at least threaten to in an effort to reduce alimony. You may also want to try asking nicely (not necessarily in that order). Treading lightly might be advisable.

I'm all ears for any options you see. I'm being forced into a situation where my daughter and I will have to survive via food pantries while my Ex will have the equivalent of a $60,000yr job to sit on her butt and continue her addictions. I'm having difficulty reconciling this.

Was that the situation during the marriage? If so, the State may deem it "fair" for that situation to continue.

Are you currently represented? I noticed you mentioned "arrears to attorney" but not current counsel.

 

[LdiJ]

Half the duration of the marriage is a standard (not necessarily the only standard). 30 or so months doesn't seem excessive. Keep in mind the tax differences between alimony and support.



Please describe the debt: when was the debt acquired; what is the nature of the debt; what did the debt pay for.



Just to make sure I'm understanding this: You gross $132k a year, alimony and support would be $44.4k, debt would be $12k, taxes would be about $35kish. That should leave about $3383/mo for mortgage, utilities, and expenses. Without further information I'm not able to reconcile that with $1644/mo.



Depending on the answers to the questions I asked about the debt, you may be able to hang some of that responsibility on her, or at least threaten to in an effort to reduce alimony. You may also want to try asking nicely (not necessarily in that order). Treading lightly might be advisable.



Was that the situation during the marriage? If so, the State may deem it "fair" for that situation to continue.

Are you currently represented? I noticed you mentioned "arrears to attorney" but not current counsel.

From what he described above the debt in question is legal fees and GAL fees...that is probably not something that he can hang any of on her.

Also, due to the fact that alimony is tax deductible his actual tax bite (include social security and medicare) would be closer to 27k...leaving him another 8 k in available income which would put him at more like $4050.00 a month.

 

[I'mTheFather]

I suspect there's no attorney involved at this time. Illinois law regarding maintenance changed, effective 1-1-15. The duration of maintenance payments is now defined by statute, as is the amount of maintenance. For marriages between 5-10 years in length, the multiplier is 0.4. OP's marriage must have lasted 6.5 years to have a duration of 2.6 years.

I too agree on OP's math. Not sure where he's getting 60K for ex's income, nor the ~1700/mo he'll have left.

 

[LdiJ]

I suspect there's no attorney involved at this time. Illinois law regarding maintenance changed, effective 1-1-15. The duration of maintenance payments is now defined by statute, as is the amount of maintenance. For marriages between 5-10 years in length, the multiplier is 0.4. OP's marriage must have lasted 6.5 years to have a duration of 2.6 years.

I too agree on OP's math. Not sure where he's getting 60K for ex's income, nor the ~1700/mo he'll have left.

He is assuming that the 3300.00 is the equivalent of 3300.00 after tax. He is completely ignoring the fact that the 3300.00 is her GROSS and that she will have to pay taxes on that income.

 

[I'mTheFather]

He is assuming that the 3300.00 is the equivalent of 3300.00 after tax. He is completely ignoring the fact that the 3300.00 is her GROSS and that she will have to pay taxes on that income.

Still doesn't work.

 

[Boogiewipes]

Thank you for your help.

Here's the specifics. All debt has been incurred since the divorce filing in January last year. All of my debt is due to attorney fees and court ordered attorney fees. Currently $10,000 is court ordered ($5k each to OC and GAL). My gross income is $10,400/mo. After mandatory deductions, I see $7000 in my bank account *EDIT*

The $60,000 income figure for STBX is the $40,000/yr in alimony plus the $5000/year in tax free CS. I have to earn approximately $60,000 to pay her that $45,000, no?

So here's the budget breakdown:
$480/mo household expenses including food
$300/mo term life/renters/unmbrella
$130/mo auto insurance (2 cars, liability only)
$250/mo childcare (preschool)
$900/mo rent
$240/mo utilities (heat/electric/sewer/garbage)
$180/mo gasoline
$35/mo cellphone
$10/mo tolls
$185/mo doctor/medication
$800/mo attorney fees
$120/mo entertainment for daughter and I.
$382/mo expenses for daughter (clothing, school supplies, lessons, grooming, sitters)
$150/mo work related expenses
$100/mo (firewood, lawncare, car mx fund, clothing for daughter and I, etc)
$2000/mo temporary alimony nontaxable
---------------
$6262/mo



My net pay is only $7000/mo after mandatory deductions (fed/state/flica/Medicare/ltd/union dues/RHA). Gross is $10,500/mo.

With the possible increase to $3300/mo plus $400/mo in CS (even though I'm the custodial parent), it's not possible. All of my expenses are far under the IRS guidelines for where I moved with my daughter after DCFS gave me emergency custody. Most of my neighbors are on public assistance. There isn't any way to live significantly cheaper.

So why does the court feel it's appropriate for my STBX to be living better than me and forcing me into poverty? My STBX hasn't contributed a single dime to our daughter. She refuses to get a job. The court doesn't care that she hasn't complied with the court order regarding seeking employment. This divorce started a year and a half ago and is now at the 6.5 year mark.

I'd really appreciate any corrections to my calculations. I am represented by an attorney but since I am in arrears to the tune of $10,000 and he is asking for $20,000 to begin Discovery, I don't respond to him.

My STBX will file Ch7 after the final decree, thereby wiping out all of her attorney fees and credit card debt. She will be living great with the ability to work on top of the alimony while I as the custodial parent toil in poverty. How is that equitable? The main reason the attorney fees are so high is the many emergency hearings that were required due to the mother's compulsive behaviors. Now the court is doing the worst thing possible and that is giving her the means to continue not working. This is the perfect recipe for the mother to go back to her addictions.

 

[LdiJ]

After mandatory deductions, I take home $5000

My net pay is only $7000/mo after mandatory deductions

Would you like to reconcile those two statements?

I do have a problem with your calculations, but I will respond on those issues later.

 

[Boogiewipes]

Would you like to reconcile those two statements?

I do have a problem with your calculations, but I will respond on those issues later.

Sorry, included the $2000/mo temporary spousal support as a deduction but forgot to correct it. $7000/mo is what I see in my bank account. I then have to write STBX a check for $1000 every two weeks court ordered. I edited the first post to clarify. Thanks for taking the time to eliminate any irrationality I have. As you can imagine, it's a difficult time and my thoughts are spread in many different directions. I don't want my emotions causing me to make a larger financial mistake.

 

[LdiJ]

Ok...back to the calculations....

I see a lot of room in your budget for downsizing.

However, lets go back to your income and taxes.

10400.00 a month. I am going to assume that you are paid every two weeks, so that is 5200.00 x 26 pay periods a year or 135,200.00.

Medicare tax is 1.45% x 135,200.00 = 1960.00
Social Security tax is 6.2% x 117,000 = 7254.00

Your taxable income would be 135,200 = 39600.00 for alimony, - 9100.00 head of household standard deduction - 7900.00 standard deduction x 2 = 78,600 in taxable income, which is tax of 14063.00.

You state tax bite would be about 95600.00 x 5% approx. = 4780.00

So, we take 135200 - 1960 -7254 - 14063 - 4780 - 39600 - 4800 = 62743.00

Even taking into consideration union dues and health insurance payments there is a huge segment of the population who can live quite comfortably on a before tax wage of 62743.00, let alone an after tax amount of 62743.00 even with union dues and health insurance coming out of that.

You simply have to adjust your withholding to take the alimony into consideration...perhaps temporarily stop contributing to your retirement account or reduce your contribution, and downsize your budget and you should be just fine. You may not be able to pay your attorney 800.00 a month.

 

[Astrolink]

I think the situation isn't as dire as you paint it. First, you have many set expenses, but I bet you could trim $1000 off your monthly budget if it was necessary. Second, you have more than twice the amount needed to fund your full alimony obligation. In 2.6 years, it would be over.

You can't control what your ex does and must follow whatever your court order ends up at. I would accept that and move on. 2.6 years will be over much quicker than you think.

 

[Boogiewipes]

Ok...back to the calculations....

I see a lot of room in your budget for downsizing.

However, lets go back to your income and taxes.

10400.00 a month. I am going to assume that you are paid every two weeks, so that is 5200.00 x 26 pay periods a year or 135,200.00.

Medicare tax is 1.45% x 135,200.00 = 1960.00
Social Security tax is 6.2% x 117,000 = 7254.00

Your taxable income would be 135,200 = 39600.00 for alimony, - 9100.00 head of household standard deduction - 7900.00 standard deduction x 2 = 78,600 in taxable income, which is tax of 14063.00.

You state tax bite would be about 95600.00 x 5% approx. = 4780.00

So, we take 135200 - 1960 -7254 - 14063 - 4780 - 39600 - 4800 = 62743.00

Even taking into consideration union dues and health insurance payments there is a huge segment of the population who can live quite comfortably on a before tax wage of 62743.00, let alone an after tax amount of 62743.00 even with union dues and health insurance coming out of that.

You simply have to adjust your withholding to take the alimony into consideration...perhaps temporarily stop contributing to your retirement account or reduce your contribution, and downsize your budget and you should be just fine. You may not be able to pay your attorney 800.00 a month.

I'm paid semimonthly so 48 pay periods per year. My union dues are 1.95% of my gross. Health insurance runs $300/mo. I don't contribute to my retirement. My expenses listed in a previous post are accurate.

Union dues $2496/yr
Health insurance $3600/yr
Before tax income $124,800/yr
Alimony $39,600/yr
Child Support $4800/yr
Medicare- $1810/yr
Social Security- $6510/yr
Income tax at your assumed rate of 17.8%- $12,140/yr


124,800-9100-7900-6510-1810-36,900-4800=
My numbers adjusted for the fewer pay periods and union dues and health insurance are under $57,780 after tax. So that means net monthly income of around $4850/mo

I agree that I could live comfortably on that if I didn't have massive debt that was incurred due to divorce. Outside of going to a good pantry, I'm unsure of where else I can cut back. The attorney fees is the only real area. Everything else has already been slashed unless I start going to food pantries. What areas are you seeing that are too high?

 

[Zigner]

How does $300 per month = $4,200 per year?

 

[Boogiewipes]

I think the situation isn't as dire as you paint it. First, you have many set expenses, but I bet you could trim $1000 off your monthly budget if it was necessary. Second, you have more than twice the amount needed to fund your full alimony obligation. In 2.6 years, it would be over.

You can't control what your ex does and must follow whatever your court order ends up at. I would accept that and move on. 2.6 years will be over much quicker than you think.

Astro,

I'm open to advice. I can cut $100/mo of the grocery bill by going to a food pantry bimonthly. Where do you see how I could shave $1000/mo off. I already cut cable, stopped saving for retirement, drive a $1500 beater, have only liability insurance, and shop at Aldis and price match at Walmart. My rent for the area I live is very low. As I said, the majority of my neighbors are on public assistance and the school district is in the bottom 30% in the state. My only debt is due to legal fees since I've entered financial austerity at the beginning of the divorce. Frankly, nobody can understand why my daughter and I are being forced to live like this while the mother incurred $40,000 in debt in the 12 months with only $3000 of that being legal fees. She never stopped spending and now I'm on the hook for 60% of the total marital debt for being the party that actually cut back spending. Why does she get to file CH7 and walk away debt free? This is total abuse of the process.

How does the court expect me to be able to pay off the debt I've incurred due to my STBX running the legal fees up so high?