Texas Alimony – Texas Spousal Support Law

Alimony is the common term used in reference to post-divorce payments from one former spouse to the other. In some states there are several forms of alimony; i.e., temporary alimony, rehabilitative alimony, permanent alimony, etc.

In Texas, there is only one possible form of post-divorce payment obligation – “spousal maintenance”. If a party to a divorce meets the qualifications set forth in the Texas Family Code, the judge can enter orders for spousal maintenance.

“Contractual alimony” is entirely different from spousal maintenance. The Internal Revenue Code outlines the requirements for contractual alimony payments. As evidenced by the label, contractual alimony must come about through an agreement of the divorcing parties – it cannot be ordered by a Texas court.
Spousal Maintenance

Until recently, Texas was the only state without some form of post-divorce spousal support statute. The term commonly used to refer to post-divorce payments is “alimony” but the Family Code refers to those payments as “spousal maintenance.”

The spousal maintenance is similar to what other states refer to as “rehabilitative alimony”. It is limited in duration and amount with the intention being for the support to continue only for the period necessary for the former spouse to acquire education and employment that will allow him/her to become financially self-sufficient. Since that is the underlying purpose for the payments, there are rather narrow parameters for eligibility.
Eligibility Standards

The eligibility requirements for spousal maintenance are:

A marriage of 10 years or more that ends in divorce with one party lacking sufficient property to provide for that person’s minimum reasonable need and
The person is unable to support himself/herself due to a physical or mental incapacity
Is unable to be employed outside the home due to caring for a child with a mental or physical incapacity or
Lacks the earning capacity to support himself/herself.
Family violence was committed by the other spouse.

As a practical matter, the persons most often qualifying for spousal maintenance are the “stay at home mothers” who have been out of the workforce for a considerable period of time in order to raise children. Changes in business structures and advances in technology (particularly in the field of computer software) can present huge obstacles for the spouse who has been away from the business world.

A person may forfeit the right to seek spousal maintenance unless he/she is diligent in pursuing education, training and employment during the time the divorce is pending. That means following the “I won’t go to work so my spouse will have to pay more alimony” avenue is disastrous.

In disability cases, the payments can be ordered to continue for as long as the disability continues. In those situations, the judge will probably order that there be periodic reviews of the facts to determine whether the disabling condition is still in existence.

Under the latest Texas statute, the amount and duration of payments that the judge may order have been significantly changed. If the parties were married between ten and twenty years, the spousal maintenance payments could run for up to five years. If the marriage lasted between twenty and thirty years, the payments could be extended for up to seven years. If the divorce took place after more than thirty years, the payments could span up to ten years. Further, the potential amount of the payments was increased from $2,500 per month to $5,000 per month.

Although the Texas spousal maintenance law remains very conservative when compared to the laws of other states, the revised law gives the judge more latitude to assist a former spouse who would otherwise be in dire financial straits after the divorce. (see Spousal Maintenance – Recent Changes in Texas Divorce Law)
Contractual Alimony

The structure of contractual alimony is defined within the Internal Revenue Code. Contractual alimony, as the name implies, can be placed into effect only if the parties agree to its terms. The courts in Texas can and will approve divorce settlement terms that include contractual alimony provisions, but the only form of post-divorce payments by a former spouse the court can order without an agreement of the parties is spousal maintenance.

Contractual alimony payments must cease upon the death of the receiving party. There are some rules concerning disqualification if payments are heavily weighted on the front end of the time period or are clearly used as a substitute for child support; however, aside from those limitations, the parties are free to fashion the terms of the agreement.
What Is The Advantage Of Alimony?

In many situations, one spouse has a considerably greater earning capacity that does the other spouse and that disparity will continue after the divorce. Under the U.S. graduated income tax system, the higher wage earner is taxed at a higher percentage rate than is the lower wage earner. Contractual alimony is tax deductible for the paying party and is to be included as income for the receiving party. That means the cash along with the income tax liability associated with the payment is shifted from the person with higher earnings to the one with lower earnings.

Contractual alimony is a very helpful settlement tool in cases of this nature because the net effect of the transfer of income and taxes creates a benefit for both parties at the expense of the IRS.

For example, if the alimony payment is made by a person in the 35% tax bracket to a person in the 20% tax bracket, the IRS loses the 15% differential in tax liability. Through the deduction of the alimony by the paying party, the net cost of $1.00 paid is actually $.65 whereas the inclusion of the same $1.00 as taxable income on the receiving party’s tax return costs that person $.20 while benefitting that person with spendable income of $.80. Both parties benefit at the expense of the IRS – no one ever complains about the loss to the IRS.
Defining The Terms Of Alimony Payments

Contractual alimony is not limited by the kind of restrictions that are applicable to spousal maintenance. The period of time during which the payments are made, the amount of the payments, terms by which the payments will increase or decrease, the procedures for making the payments and all other provisions of the agreement related to alimony are devised by the parties and their attorneys. In other words, the entire structure of the alimony agreement is built from the ground up to suit the particular needs of the parties involved in the divorce.
Situations In Which Alimony May Be A Useful Tool

As stated above, the “stay at home mom” situation frequently arises in divorce cases. Quite often the father/husband earns a significant income and mother/wife will reenter the workforce at a significantly lower wage level. In some cases, the mortgage payments on the house are relatively large or the children are enrolled in private schools or an automobile needs to be purchased for a child or some other expenditure is necessary for the former spouse and children to maintain a reasonable life style after the divorce. Contractual alimony is a very helpful tool in resolving cash flow dilemmas of that nature.

Under the spousal maintenance statute, the potential relief for the newly employed mother/wife are very limited – perhaps, to the point of being virtually no assistance at all. That is not the case with contractual alimony. For example, an alimony figure can be set to assist mother/wife in paying the mortgage or cover expenses related to the children. If the alimony is intended to cover private school tuition, the payments can be made directly to the educational institution.

Obviously, father/husband needs some incentive to make contractual alimony payments and will expect something in return for the cash. By including provisions in the agreement that the alimony payments will be discontinued if wife/mother and the children move out of the house, husband/father can be assured of where his children will reside. If the agreement states that the alimony is to be paid directly to the private school, father/husband knows that the child will continue to be enrolled in a particular institution.

Provisions can be incorporated to lower the alimony payments if the income of the paying party decreases or vice versa. Termination provisions can be included to halt payments upon the remarriage of the receiving party.

Bottom line – the terms of contractual alimony payments can be tailored to fit the circumstances of the parties.

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Chapter 13 While Going Through Divorce or Separation

If you consider you’re headed for separation as well as have lots of debt between the both of you, it could make sense to file for individual bankruptcy before beginning a lawful divorce proceeding. Filing bankruptcy first might simplify the separation by clearing out some of your financial debt. This can make it easier to negotiate how the remaining debts should be distributed, and guard you from your soon-to-be-ex’s chapter 13 filing later on in life.

Additionally, both you and your partner might want to consider submitting a joint individual bankruptcy just before the divorce. Not merely will this make the ultimate splitting of any outstanding bills even easier, nonetheless filing a joint chapter 13 is cheaper when compared with submitting two individual ones.

In either event, bankruptcies plus separations have significant impacts on each other, particularly with respect to your home and private funds.

Effect of Bankruptcy on Breakup

When one or both spouses file individual bankruptcy, all the community property, that’s, residence that was bought or obtained throughout the course of the marriage, turns into a piece of the bankruptcy real estate and is obtainable to pay for financial obligations. The chapter 13 real estate is simply all of your home that you own the moment the chapter 13 is actually filed.

If you or your husband or wife submit a chapter 13, an automatic stay instantaneously inhibits loan providers from receiving on most liabilities. Nevertheless the instant stay does not prevent you from requesting a divorce court to order your husband or wife to pay child assistance or alimony.

The moment a bankruptcy court decides asset is “exempt,” that’s, it’s not part of the chapter 13 estate and so it’s not obtainable to be sold to pay for financial obligations, a separation court can then split that home. Asset exemptions are identified not simply by federal law (the “Bankruptcy Code”), but also by the laws of the state in which the bankruptcy is submitted.

A few examples of national exemptions include:

  • A specific buck sum for real house which is for his or her residence, and
  • A particular buck amount for one car, for instance your main vehicle

Home Pay outs as well as Chapter 13

Negotiating a asset agreement in the midst of chapter 13 is complicated. Financial obligations associated with a home pay out are presumed to be “nondischargeable” in individual bankruptcy, and therefore the person who registers individual bankruptcy can’t have those loans wiped away plus should still be accountable for them. But the bankruptcy court will wipe away those financial obligations in case the individual submitting chapter 13 can display:

That she or he cannot pay the liability as well as even now take care of him or herself and any loved ones, or
That wiping out the debt would lead to a benefit to the individual submitting the chapter 13 which outweighs any damage done to his or her former husband or wife or youngster by nonpayment

So should you consider your spouse is thinking about bankruptcy after your breakup is finalized, you will want to phrase your house agreement in a way that your soon-to-be-ex’s obligation looks and works as much as probable just like a support responsibility rather than a house settlement. That is so easy as support responsibilities are much more difficult to have discharged.

How do individual bankruptcy legal courts determine what is support and what is house decision? It differs greatly by state; but courts have based their decisions on this sort of questions as:

  • Does the responsibility terminate or decrease with the occurrence of specific events, such as remarriage or a child turning eighteen?
  • Is the debt in installments or a lump sum payment?
  • Are there minor kids?
  • What is the comparative health and education of the parties?
  • Was there a requirement for support at the instant of the separation?

In case your bankruptcy hasn’t been registered but, these disparities as well as issues probably won’t affect you. For several bankruptcies filed on or after October seventeen, 2005, any obligation among past husbands and wives cannot be discharged in chapter 13. Therefore, a spouse with an alimony and/or baby help obligation cannot have that responsibility discharged in individual bankruptcy if the chapter 13 petition was submitted on or after October 17, 2005.

Real estate Liens

One strategy to defend yourself in a divorce discussion in case you think your partner might be thinking of bankruptcy in the future is to have a security lien like a backup to obligations your partner is to pay you after the divorce. The lien must be on real estate your husband or wife is to be granted in the separation, ideally property which means a lot to your spouse. Like that, in case your husband or wife later requests the individual bankruptcy court to discharge the financial debt she or he is required to pay for, you can grab the house to pay out the financial debt.

Indemnity Clauses

Another safety measure in the face of a soon-to-be-ex-spouse talking about chapter 13 is to have a “hold harmless” or “indemnity” clause written into the divorce decree, needing your husband or wife to pay particular bills or pay back you if a creditor makes you pay the credit card debt. In case your ex-spouse later files individual bankruptcy, you can proceed to bankruptcy court and request the judge to enforce the indemnity contract. Whilst an indemnity agreement will not assure you will get paid, it’s one more factor for the chapter 13 judge to consider.

As you can see, the troubles of going through separation and individual bankruptcy concurrently are confusing at best, and highly damaging at worst. In case you find yourself in this situation, it makes sense to locate a chapter 13 attorney who can assist you with all the difficulties.

For help with Athens GA family law, find a family lawyer Athens GA.

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Save Marriage from Divorce: Some obstacles to Progress

Save Marriage from Divorce: Four Important Problems
The recession has been cited as 1 of the major reasons why couples contemplate divorce. Recognising what has caused the difficulties inside the 1st place can smooth teh path to a far better resolution. Also, while there is no dearth of guidance which will be used throughout marital discord, there seriously isn’t any ‘one size fits all’ kind of answer when marriage problems are concerned. If you feel that you ought to save your marriage from divorce, it is critical that you 1st identify what the problem is, and then see if it can be fixed. Given below are three of the most typical trouble that will cause unions to break apart.  

The folk singer Richard Thompson wrote these lyrics for his song ‘Misunderstood’ which most of us can identify with in past relationships “But I misunderstood, but I misunderstood, but I misunderstood. I thought she was saying good luck, she was saying good bye.” Miscommunication between couples can be solved fairly easily.  Usually it’s the composite effect of a series of misunderstandings that cause unnecessary tension. Although this may possibly be true in some cases, in a whole lot more cases it’s a case of being misunderstood. A communication breakdown in a marriage could also occur merely because either partner does not like what the other partner has to say. Also realize that although married persons are quite prone to fights, arguing all the time is definitely unhealthy. Communication in a marriage need to have both partners respecting every other’s point of view, and listening should play an necessary role in all discussions.

Unfaithfulness:If either partner has cheated in a marriage, and if the other partner is willing to forgive the partner that has erred, then the cheating partner wants to take appropriate measures to make amends. It’s also incredibly essential that the cheating partner willingly cuts ties with the individual in question with immediate effect. The next step inside the damage-control measures would contain being entirely transparent in your day-to-day planning/activities. If you wish to save your marriage from divorce after an incident of infidelity, do understand that rebuilding the lost trust won’t occur overnight.

Mental or Physical Abuse:An harassing partner could possibly be rather difficult to deal with, and this holds true for both, physical and mental abuse; and extra generally than not, women tend to stand at the receiving end.   To save a marriage from divorce when abuse is seriously a concern may be quite a challenge. Outside help in the form of marriage counselling can be useful, but it’s seriously crucial that the erring partner be willing to mend his techniques. As someone who is being abused, you’ll want to figure out how much you’re willing to give in order to save that marriage from divorce, and how far you’re willing to go.

Addiction: This may be in the form of alcohol, illicit drugs, gambling, or even pornography. In any case, the addicted partner must be prepared to go clean, also as the other partner ought to be willing to offer the required support and aid.

Maintain in mind, regardless of the actual predicament which your relationship faces, there’s a possibility that it can be fixed.   The most important thing is that you and your partner must still be willing to give your marriage another chance. Save marriage from divorce today.

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