Are There Limits That Apply to Spousal Support?

Interviewer: Are there limits to spousal support? Can you theoretically bankrupt the other party?

An Example of How Spousal Support Could Contribute But Be the Cause of Bankruptcy

Tanya: Can they bankrupt somebody? Yes, they can. Sometimes the numbers are inaccurate. Or sometimes they’re too extreme one way or the other and they can cause that kind of harm to people. Additionally, sometimes these people are unable to manage their finances properly.

So for example, let’s say, the husband makes $300,000 a year and his wife makes a $100,000 a year. And say the judge awards $60,000 per year of alimony, which is tax deductible to him. Alimony is all tax deductible and it’s taxable to the recipient. Then say he has to pay $25,000 in child support.

So you make $300,000 a year, you’re paying $60,000 in alimony, and then $25,000 in child support. Now, should that bankrupt the person that’s making $300,000 a year?

No, but if he decides he’s going to go and buy a big, expensive house, and then he goes and buys a $100,000 Mercedes, and then makes other extravagant purchases, obviously it’s not the support that bankrupted him. It’s the other choices, but that happens.

Could Spousal Support Exceed Fifty Percent of Someone’s Income?

Interviewer: The reason why I asked is could the alimony and child support ever be 70% of someone’s income? Or will it never go that high?

The Number of Children, Plus a Locale’s High Cost of Living Could Lead to a Large Percentage of Income Being Allotted for Support

Tanya: Well, look, let’s look at the scenario. Let’s say you have a man who earns 70 thousand a year, his wife earns 20 thousand and they have four children.

They divorce, so now they have two households. The wife has custody of the children. The cost of living is expensive in New Jersey, so Dad obviously has to use a large part of his monthly income.

He could end up paying more than 50% of his salary over to her because he has to support his four children and his wife that was making $20,000 a year. So, that could happen. There are five mouths to feed.

It is a bad situation but that could happen and he may have to either get another job or live with his parents or a friend to make ends meet because the courts aren’t going to have the children on welfare. That’s the bottom line.

Is Child Support Factored into Alimony?

Interviewer: Does the child support amount interact with the alimony amount?

Tanya: The way it works is you have the mother’s income and you have the father’s income. Even if the mother isn’t working, you arrive at some agreed upon figure for both incomes.

Then you have the alimony calculation. So then what you do is you subtract that from the father’s income and give it to mother. So say the father earns 100 thousand and the mother earns 30 thousand, then the father gives the mother $20,000 a year of alimony.

So now the mother has $50,000 and the father has $80,000. Child support guidelines do exist, which are pre-calculated figures for what families spend on children. And then you calculate, based on the overnight visits and other factors and then the child support guidelines are calculated and then the percentages.