Calculating Alimony in New Jersey

Calculating alimony in New Jersey is not a simple as one would like to think.  By the very nature of the word “calculate” that would seem to indicate (a) there is some sort of formula, (b) we plug in some data and (c) voila! out comes a number.  But unlike the NJ Child Support Guidelines, alimony in New Jersey isn’t based on a formula at all but rather a series of 13 “statutory factors” that one can interpret to mean a number of different things.

Take for example this factor:  The actual need and ability of the parties to pay.

How do we determine the need for alimony in New Jersey?  How do we know someone is able to pay?  What happens if they can’t pay?  What happens if in the future they make more money than they’re making now and their ability to pay is increased?  Then what?  How do we account for the ever increasing cost of living?  Have you seen food prices lately?  How do I know my needs today are going to be the same as my needs tomorrow?

Or how about this one:  The earning capacities, educational levels, vocational skills, and employability of the parties.

In today’s economy, this is a much different statement than it might have been 5 to 10 years ago.  Take for example the client who was a Wall Street trader.  In 2001, their income was $1.2 million, today $100,000.  OK, so maybe hard to feel bad for the person who used to make $1.2 million but based on past earnings history, it would seem their ability to pay would be rather high, but today they aren’t even close to making what they used to and so, how about now?   What is their ability to alimony in New Jersey?  On the other hand, what about the party who is returning (or attempting to return) to work in this economy after having been home with the children for the past 10 years.  They used to be a VP of Marketing but try finding a job like that now and even if you did it’s my guess that you’d make less in 2011 than you did in 2001.  So in this case while it seems they wouldn’t have a need based on past earnings history, they may have a need now.  The point is alimony in New Jersey is a difficult thing to determine as many (if not all) of the factors that serve as the guidelines are vague at best.  So where does that leave us?

In mediation we used a budget based process that helps us determine the marital lifestyle, post-marital needs for each of the parties and a fair and equitable distribution of both marital assets and liabilities as well as incomes to do our best to make sure each party will have access to the financial resources they need in order to move forward with their lives.  Alimony in New Jersey is a complex matter best left to an Accredited Professional Mediator like myself and I would encourage you to give our offices a call at (908) 864-2177 if you have a question or would like to schedule an appointment to discuss your situation in more detail as the decisions you make now are going to impact you and your family for the rest of your lives.

NJ Divorce Mediators Move at Your Pace

A common question people ask me is “how long does NJ divorce mediation take” to which I answer: as long as you would like it to.  And while that may seem like a rather odd answer, the truth of the matter is because NJ divorce mediators work for on behalf of each of you and therefore, we have no hidden agenda to rush you through the process or to slow things down.   The reality is, divorce mediation takes between two and six sessions depending on how complex a financial picture a client couple has and if there are children involved.  Naturally when it comes to children, NJ divorce mediators need to take extra time to develop a detailed parenting plan as well as calculate the NJ Child Support Guidelines so that does take extra time but on average, I would say four sessions is a safe bet.

Most NJ divorce mediators I know including myself would normally schedule a session every other week so if you take four sessions and meet every other week, figure on about two months.  But if you wanted to move faster, we certainly could compress that and similarly, we could extend the time between sessions which is what I recommend for couples with particularly complex financial situations in which they may need to re-finance a house, sell an asset, face foreclosure or have assets that require valuation from an outside expert such as art, stock options or a business.  The good news is, 95% of the people I see do not fall into the complex category so it’s a fairly safe bet you will fall in the range of the average client.

Some reasons you may wish to move faster are:

1. Changing jobs and / or planning on moving out of state
2. You’re an hourly employee and days off are at a premium
3. You’d like to be divorced by the end of the year (although the courts have more to do with this than mediation does)
4. You just want to move forward with your life and prolonging the divorce mediation won’t allow you to do that

Some reasons you may wish to move slower are:

1. Your financial situation is in flux: bankruptcy, foreclosure, loss of job, etc.
2. Emotionally you’re having difficulty accepting this is happening and need some time to seek counseling or coaching
3. It’s near the end of a school year and you want to tell the children over the summer
4. You want time to consider the decisions you made in the last divorce mediation session before scheduling the next one

No matter which speed you choose, the key thing to remember is the choice is up to you.  NJ divorce mediators are all about putting you in control of your divorce and helping you both design an agreement that works in your particular situation and on your timetable, not mine, not the courts, not a judge and certainly not a lawyer.

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Joseph Dillon is one of less than 100 Accredited Professional NJ divorce mediators in New Jersey and a Managing Partner of Equitable Mediation Services a New Jersey divorce mediation practice with offices in: Morristown, Roseland (Livingston), Short Hills, Iselin (Metropark), Bedminster, Bridgewater, East Brunswick, Red Bank and Princeton.  Mr. Dillon may be reached by calling (908) 864-2177.

Dividing Up Debt in Divorce Mediation

Unfortunately the days of selling the marital home as the result of a divorce and getting a lump sum of cash to start over with are long gone.  These days it’s more likely that couples who engage in New Jersey divorce mediation are discussing how to manage their marital debts instead of their marital assets but what do you really need to know before you come to any agreements?

As a New Jersey divorce mediator it’s my job to help couples resolve all the issues surrounding their divorce and the equitable distribution of marital assets and liabilities is one of those responsibilities.   I do get clients who think that divorce mediation is a gateway that they can pass through and all of their debts will be forgiven but that’s not how it works.  Even after your divorce mediation your creditors will still want their money.  So what can you do?

1. Liquidate other assets to pay off your debt – while not ideal, you can pay the taxes and penalties on your 401k and take that money to pay off your credit cards or mortgage.  A better option is to see if you can take a loan from your 401k as in that case, you’ll be paying yourself back with interest.   You might also have to make some tough decisions on items of personal property you may wish or need to sell such as that motorboat and trailer you bought a few years back or that recreational vehicle.
2. Transfer your share of the debt to a credit card in just your name only – again, not perfect but at least in this case you’re taking your share of the debt and making a clean break once you are divorced.  You’ll be in control of how it gets paid and when you pay it off.
3. Agree to pay debts off jointly after you’re divorced – probably the least preferable option as it’s been my experience that the banks don’t care if you were each supposed to pay half.  If your name is on that credit card and the ex doesn’t pay their share, guess who the banks are going to be looking at?  You.

Ideally you should try to clear the slate once you’re divorced even if it means taking personal loans or getting loans from friends and family members as I’m figuring the reason you got divorced in the first place was to sever ties with your now ex-spouse, not to be indebted with them for the next 10 years.  No matter which route you go, it’s best to work with a New Jersey divorce mediator with a thorough understanding of financial matters like myself who can help guide you and your spouse to a fair and equitable distribution of your marital assets and liabilities.

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Joseph Dillon is an Accredited Professional Divorce Mediator in NJ and Managing Partner of Equitable Mediation Services a New Jersey divorce mediation practice with offices in: Morristown, Roseland (Livingston), Short Hills, Iselin (Metropark), Bedminster, Bridgewater, East Brunswick, Red Bank and Princeton.  Mr. Dillon may be reached by calling (908) 864-2177.

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