Questions...

[aspect]

What is the name of your state? Texas

My wife of 13.5 years has decided that she doesn't want to remain married to me any more. We have two kids 6/3. We want to try and work this out peacefully, so that things don't get expensive or ugly.

I currently have a job as a contractor making approximately $96k a year. The contract is due to expire at the end of January. There is a possibility that I'll be extended, but that's no guarantee.

My wife is a stay-at-home mother. She's been unemployed for 6 months. She worked in the past and made around $38k. Now she is looking for jobs, and appears to be settling for jobs paying around $24-26k a year due to it being in town. She wants to be home for the kids if at all possible.

We have a business together that has been around for about 4 months. The business is an LLC that is in my name. The business is seasonal, so its doing very poorly right now (losing about $8k a month). This was expected. I anticipate to make up for it in the warmer months. The business was initially financed with money from a family member of mine. My wife and I both agree that regardless of our situation, we want to pay the family member back as soon as possible.

I've been preparing for a small business loan (SBA) for around $350k to purchase the land and building for my business. I've been pre-qualified. I'd like to continue with the loan, b/c I don't know if I'll qualify for the loan after divorce.

My questions are:

1. I want to pay child-support. What amount should I reasonably expect to have to pay?

2. What type of alimony should I expect to have to pay? For how long?

3. I don't want to sell my business. I wouldn't get much for it. So, what arrangements are recommended for joint ownership of the business after a divorce? Should I try to fight for sole ownership of the business and pay her a monthly "royalty" for as long as I own the business? Should I sell the business, would she be entitled to half the profits?

4. Should I proceed with the SBA loan? The concern for her is that she would own the debt obligation if I default. I told her that I felt that if after the divorce that I was the sole owner of the LLC, that she wouldn't have any obligation to pay the loan if I defaulted. Is this correct? My name is the only name on the loan application.

5. Right now, since the business is losing money, I am having to support the business with savings. She sees the potential of the business and is eager to owning a stake in it, but wants me to agree (in writing) that she isn't responsible for any debts of the business. I know that would be bad business, but I know that if I can't pay the amount with my current salary, there's no way she would be able to either. Why bring both of us down... Is it fair for me to agree to this type on contract in exchange for no alimony payments? Is this wise on my part?

Thanks in advance to anyone who responds.

[CJane]

Assuming your wife gets custody of the kids (and before Nextwife yells at me, I'm assuming that because you have seemed to indicate that and because she's been primary care giver for at least the past 6 months)... you can expect to pay 25% of your gross wages in child support.

This would be about $2000/month.

I would not expect to pay any alimony and would approach your wife with the idea that Alimony is TAXABLE INCOME while CS is not. So, with her wage of approx $26000/year plus your CS obligation of $24000/year, her income is $50K/year nearly half of which is not taxable. That's a HUGE advantage to her.

I can't answer the business questions.

I can tell you that your income for CS purposes is going to be based on what you have the ability to earn... so it's going to be VERY HIGH whether your contract is renewed or not.

[aspect]

Your assumption is correct. The kids will live with her, and we'll share custody.

I wasn't expecting to be paying $2k a month for child support. For some reason I read somewhere that it was 20% of gross capped at 6k per month ($1.2k monthly). Guess I misread.

[Bali Hai]

Originally Posted by aspect

Your assumption is correct. The kids will live with her, and we'll share custody.

I wasn't expecting to be paying $2k a month for child support. For some reason I read somewhere that it was 20% of gross capped at 6k per month ($1.2k monthly). Guess I misread.

That's for one kid. You said you have two kids, correct?

[CJane]

The Texas Family Code contains guidelines for the computation of child support. The guidelines are specifically designed to apply to situations in which the obligor's monthly net resources are $6,000.00 or less. In such cases, the court presumptively applies the following schedule:
1 child - 20% of Obligor's Net Resources
2 children - 25% of Obligor's Net Resources
3 children - 30% of Obligor's Net Resources
4 children - 35% of Obligor's Net Resources
5 children - 40% of Obligor's Net Resources
6 or more children - Not less than 40%

If the Obligor has children from another relationship(s), the percentages listed above may be reduced.

If the obligor's net resources exceed $6,000.00 per month, the Court shall presumptively apply the above percentages to the first $6,000.00 of net resources. Without further reference to the percentage, the court may order additional amounts of child support. The court may not order the obligor to pay more child support than the presumptive amount (as calculated by multiplying the above applicable percentage times $6,000.00) or an amount equal to 100% of the proven needs of the child, whichever is greater. Note: The legislature will once aain consider a bill in 2007 to increase the $6000 cutoff to a higher amount. Check out the 2007 Legislative Changes article in afew months.

So, 25% of $6000/month is $1500/month in CS.

That amount CAN, at the discretion of the court, be increased due to your income exceeding the 'maximum'.

Also, TX may have enacted the new law that increases the 'maximum' beyond $6000/month.

[aspect]

That looks like the article I read. I was working off memory on the 20%.

This goes under the assumption that the $6k minimum wasn't increased this year.

So, with it being $1.5k monthly ($18k annually) and $24k from her own salary, that'll give her $42k annually (with the $18k non-taxable), you don't think she'll qualify for alimony?

After the sale of our house, and paying debt/etc, we'll also have about $40k each to live off of.

Also, you mentioned that they'll look at my earning potential... so here's some history: My max was 7 years ago, where I hit $96k. I worked that job for 3 years starting at $32k. I left that job to move to Texas where I earned $70k. After 5 years with that job, I hit $78k. I spent roughly 8 months unemployed, due to trying to get the new business established. In November, I was hired on as a contractor at $8k monthly. The contract ends Jan 31st. I know I can line up another job shortly after that for around $60k, if I decide not to shop around. I would think that $60-70k would be my expected baseline. I personally think I'm being overpaid for this position and would hate for that to affect my baseline.

Not sure if this influences anything or not.

Thanks again for the responses.

[qurice]

The new limits should already be in place. I noticed they added in wording regarding adjustments for inflation. That did not exist previously, so I'll have to give it a good read over.

§ 154.125. APPLICATION OF GUIDELINES TO NET RESOURCES.
(a) The guidelines for the support of a child in this section are
specifically designed to apply to situations in which the obligor's
monthly net resources are not greater than $7,500 or the adjusted
amount determined under Subsection (a-1), whichever is greater.
(a-1) The dollar amount prescribed by Subsection (a) is
adjusted every six years as necessary to reflect inflation. The
Title IV-D agency shall compute the adjusted amount, to take effect
beginning September 1 of the year of the adjustment, based on the
percentage change during the preceding six-year period in the
consumer price index, as rounded to the nearest $50 increment. The
Title IV-D agency shall publish the adjusted amount in the Texas
Register before September 1 of the year in which the adjustment
takes effect. For purposes of this subsection, "consumer price
index" has the meaning assigned by Section 341.201, Finance Code.
(a-2) The initial adjustment required by Subsection
(a-1) shall take effect September 1, 2013. This subsection
expires September 1, 2014.
(b) If the obligor's monthly net resources are not greater
than the amount provided by Subsection (a), the court shall
presumptively apply the following schedule in rendering the child
support order:

CHILD SUPPORT GUIDELINES

BASED ON THE MONTHLY NET RESOURCES OF THE OBLIGOR
1 child 20% of Obligor's Net Resources
2 children 25% of Obligor's Net Resources
3 children 30% of Obligor's Net Resources
4 children 35% of Obligor's Net Resources
5 children 40% of Obligor's Net Resources
6+ children Not less than the amount for 5 children

Added by Acts 1995, 74th Leg., ch. 20, § 1, eff. April 20, 1995.

Amended by:
Acts 2007, 80th Leg., R.S., Ch. 620, § 2, eff. September 1,
2007.

[CJane]

Originally Posted by aspect

So, with it being $1.5k monthly ($18k annually) and $24k from her own salary, that'll give her $42k annually (with the $18k non-taxable), you don't think she'll qualify for alimony?

I certainly wouldn't start off offering it to her! First of all, grand scheme of things, the marriage is fairly short term. Secondly, she HAS earning potential. Thirdly, EVEN IF she was awarded alimony, it would generally be 'rehabilitative' and last for 1/2 the length of the marriage IF THAT. So you'd be looking at a very small amount of alimony for a relatively short amount of time and it would affect her taxable income. It's not a win for her necessarily.

Also, you mentioned that they'll look at my earning potential... so here's some history: My max was 7 years ago, where I hit $96k. I worked that job for 3 years starting at $32k. I left that job to move to Texas where I earned $70k. After 5 years with that job, I hit $78k. I spent roughly 8 months unemployed, due to trying to get the new business established. In November, I was hired on as a contractor at $8k monthly. The contract ends Jan 31st. I know I can line up another job shortly after that for around $60k, if I decide not to shop around. I would think that $60-70k would be my expected baseline. I personally think I'm being overpaid for this position and would hate for that to affect my baseline.

Not sure if this influences anything or not.

Well, you have shown the potential to earn between 70 and 96K over a lengthy span of years. You should PLAN to pay CS based on the max (96K) and hope for a lower amount.

[qurice]

§ 154.063. PARTY TO FURNISH INFORMATION. The court
shall require a party to:
(1) furnish information sufficient to accurately
identify that party's net resources and ability to pay child
support; and
(2) produce copies of income tax returns for the past
two years, a financial statement, and current pay stubs.

You may be able to request that the average of the last two years income be used in establishing child support. Personally, it doesn't seem fair that a 3 month contracting job be the ONLY income for establishing CS.

[CJane]

I seriously wanna know though... what job, besides selling crack and being a hitman, has the kind of upward mobility to go from 32K to 96K in THREE YEARS? Because I clearly need to change careers.

[Silverplum]

Originally Posted by CJane

I seriously wanna know though... what job, besides selling crack and being a hitman, has the kind of upward mobility to go from 32K to 96K in THREE YEARS? Because I clearly need to change careers.

Attorney, for one.

[aspect]

Originally Posted by CJane

I seriously wanna know though... what job, besides selling crack and being a hitman, has the kind of upward mobility to go from 32K to 96K in THREE YEARS? Because I clearly need to change careers.

I started off with a small startup company during the dot com boom. They were an online investment newsletter. I was their only web developer. As the company grew, my role in the company improved and I ultimately became the CTO. I left the company because I didn't feel comfortable with the business model (post 911 and the effects on the stock market).

The company ended up lasting 2 more years before being bought out. Turned out to be a good decision in the end. Plus, moving to Texas brought me and my wife closer to family (Louisiana).

[CJane]

Originally Posted by aspect

I started off with a small startup company during the dot com boom. They were an online investment newsletter. I was their only web developer. As the company grew, my role in the company improved and I ultimately became the CTO. I left the company because I didn't feel comfortable with the business model (post 911 and the effects on the stock market).

The company ended up lasting 2 more years before being bought out. Turned out to be a good decision in the end. Plus, moving to Texas brought me and my wife closer to family (Louisiana).

Silver, thanks.

I should totally parlay my web dev skillz into a job instead of favors for friends. Man.

Ok, did you notice that post up there w/the new statute? The new limit is now $7500/month, not $6000. So that's $1875.00/month.

[aspect]

Well, its evolved beyond web design.

But, back on topic, I didn't notice the new limit. This just gets more and more expensive.

I've noticed nobody wants the touch the business side of this post. Is there a better forum where I should place this that might get some input? I felt it worked better in this thread simply because it gave all the information.

My wife just informed me that I'm required to pay for health insurance. Is that correct?

What about daycare for the youngest (3)? Since she'll have primary custody, am I required to pay all/half/none? I'd like to think that my $1875 a month goes towards something.

[LdiJ]

Originally Posted by aspect

Well, its evolved beyond web design.

But, back on topic, I didn't notice the new limit. This just gets more and more expensive.

I've noticed nobody wants the touch the business side of this post. Is there a better forum where I should place this that might get some input? I felt it worked better in this thread simply because it gave all the information.

My wife just informed me that I'm required to pay for health insurance. Is that correct?

What about daycare for the youngest (3)? Since she'll have primary custody, am I required to pay all/half/none? I'd like to think that my $1875 a month goes towards something.

I will touch the business side of this post....and tell you that its quite complicated and that you cannot afford to proceed without professional assistance, and I don't mean just an attorney.

The business side of the situation depends on alot of different factors and you are probably going to need professional help to sort that out. That professional assistance IS NOT limited to a family law attorney.

Honestly you couldn't be in a worse position business wise at this point.