Through A Lens Darkly-the Pervasive Effects Of The Economy On Divorce Are Yet To Be Revealed

By Dorothy K. Phillips And Sydney Coutts Mason
Special to the Law Weekly

The deteriorating economy has become the lens through which we view everything in these difficult days and it has changed our perspective.

There have been many articles in the news recently about the economy’s effect on divorce. Money troubles can place tremendous stress on a relationship, making some people feel it is impossible for them to stay together. But the troubles that many couples are experiencing in today’s financial climate are also making it extremely difficult for them to break apart.

On a very basic level, breaking up is more expensive than staying together because where there was once one household, now there must be two. If there is a shared child-custody arrangement, the expenses for each household are even higher, as each residence must provide enough space and supplies for the children. This may be more difficult for couples to manage in these times, especially if one or both of them is unemployed. Therefore, the media has focused on couples who are putting off divorce because they feel they simply can’t afford to do so. However, deciding not to divorce is not a remedy. The couple needs to find a way to coexist in the same household, without making each other or their children miserable.

Value of the Assets

The couple who decides to go forward with divorce must determine what the economy has done to the value of the marital assets. Historically, the most valuable asset was the marital home. A common method of distribution was to award the home to one spouse who would borrow against the property to compensate the other for his or her share of the property. Often one spouse has a retirement asset that can be awarded to offset the value of the equity in the house. Alternatively, the parties could sell the home and divide the net proceeds. In the past year, values for both of these significant assets have plummeted. The parties may now find they actually owe more on the mortgage than the property could sell for in this current depressed real estate market. These difficult times create a harrowing situation for the court, which bears the responsibility for formula
1000
ting a fair and equitable distribution of the marital assets.

Courts usually rely upon real estate appraisals to set a fair market value for real property in the marital estate. Appraisals generally use recent sales of comparable properties in the area to come up with a value. But with so few sales occurring, the possibility of such appraisals is limited due to a lack of sales and, thus, a lack of “comps.” The court is then forced to place a market value on the property in a market which many economists argue is broken. Therefore, a reasonable fair market value by historical use of comps is not possible. Banks recently succeeded in arguing it was unfair to require them to use current market values in all cases. Similarly, in the context of equitable distribution, it seems clear that courts are going to have to come up with some means of valuing real property which will satisfy the Divorce Code’s policy of accomplishing economic justice between the parties.

Beyond the question of valuing the property for purposes of equitable distribution, the court and the parties will have to deal with the practical implications of this market as well. If a couple owes more on their house than it is currently worth, how to treat that situation to perform economic justice?

The parties may decide that the best course of action is to hold on to the property, hoping that market values will rebound in the future. A common situation is where one spouse wants to keep residing in the home with the children. Assuming the mortgage payment is affordable for the parties, one solution could be to put off the division of the value of the house. It may be possible to hold on to the property for a number of years, usually until the last child completes school, with the expectation that the property will be sold at the end of that time and the proceeds divided in a specified manner. The benefit of this option is that the parties do not have to risk the value of their investment in the property in the current market. On the other hand, one drawback is that they would have to wait to realize the proceeds. They would have to continue to work together to ensure that the mortgage and property taxes were paid. Also, the party not residing in the property would have to trust that the party in the home would continue to maintain it appropriately.

Once a divorce decree is granted, the fiction of the marital “tenants-by-the-entireties” ends and the parties become tenants-in-common by operation of law. Creditors of either party of a married couple cannot reach tenancy-by-the-entireties property. As to property owned as tenants-in-common, judgment creditors of one party could encumber that party’s ownership interest in the property. A judgment creditor could also file for partition and force the sale of the property. Therefore, exercising this option is not always a safe or wise choice.

Further, holding on to a home until the real estate market “comes back” is not a realistic option for parties who are already experiencing financial difficulties. If one spouse is unemployed or has experienced a reduction of income, the parties may not be able to afford to continue to make mortgage payments. One can envision a situation where a house has become a money pit, requiring exorbitant maintenance expenditures.

What was once their showplace of a home, something that felt totally appropriate when the family unit was intact, may now seem an unsupportable extravagance. An intact family may be willing to be house poor — to pay too large a proportion of their income on house payments and maintenance expenses — for a variety of reasons. However it makes little sense for a couple getting divorced to do so.

In this situation, the parties could try to sell the home in the current market, understanding that they may end up owing money rather than realizing any proceeds from the sale. They are far better advised to negotiate a short-sale for the property, in which case they would make a dea
1000
l with their mortgage lender to sell the property for less than the property is worth. The lender would then take all the proceeds and mark the loan paid. Another option would be to allow the bank to foreclose on the property. Alternatively, the parties could declare bankruptcy. All of these options would have adverse effects on the parties’ credit ratings. A short-sale might even result in a tax bill from the IRS, as forgiveness of debt may be considered taxable income.

It is therefore conceivable that some parties could become divorced and receive little more than a share of the furnishings from the house, reduced retirement accounts and the family dog, yet still satisfied that they did not get saddled with further debt.

After the Smoke Clears

So you thought your divorce settlement was safe because you finalized it last year, before the economy really went sour. Think again. Sure, you may have dealt with the issue of distributing the marital home, but what about continuing obligations, such as alimony, child support and pay-outs of equitable distribution amounts?

Many have lost jobs, or are earning less, thereby affecting their ability to pay support and/or alimony. Pay-outs for equitable distribution may not be posssible. The poor economy has affected the ability to pay for extras for children, such as private school and camp. A party who has been ordered to pay for support cannot discharge the obligation by filing for bankruptcy: in general, domestic support obligations are excepted from discharge in bankruptcy. The current language of 11 U.S.C. § 523(a) provides, in pertinent part:

“(a) A discharge under … this title does not discharge an individual debtor from any debt … (5) for a domestic support obligation; … (15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit.”

In Pennsylvania, a party may seek modification of a court-ordered amount of alimony “upon changed circumstances of either party of a substantial and continuing nature.” In addition, a
parent may seek a change in a child support order upon a showing of a substantial change in circumstances.

Significant changes in income may qualify as a material change in circumstances thereby warranting a reduction of child or spousal support. Pursuant to Pa. R. C. P. 1910.16-2(d), a voluntary reduction of income generally will have no effect on a support obligation. But the rule does allow for a support reduction when the income reduction is not voluntary: “[A]ppropriate adjustments will be made for substantial continuing involuntary decreases in income, including but not limited to the result of illness, lay-off, termination, job elimination or some other employment situation over which the party has no control.” Pa. R. C. P. 1910.16-2(d)(2).

Even when a parent has lost his or her job involuntarily, he or she cannot go without income indefinitely. Domestic Relations Offices will attach unemployment payments to pay support orders. It is expected that the unemployed party will seek a new job that would pay an appropriate income based on his or her situation, or risk being assigned an earning capacity:

“Ordinarily, either party to a support action who willfully fails to obtain appropriate employment will be considered to have an income equal to the party’s earning capacity. Age, education, training, health, work experience, earnings history and child care responsibilities are factors which shall be considered in determining earning capacity.”

Of course, when the Pennsylvania Support statute and Rules of Civil Procedure became law, this downtrodden economy could not have even been imagined. People today have never expe
1000
rienced such a “recession” as is happening now. Courts will continue to face an increase in the number of petitions for modification as the unemployment rate continues to rise. In evaluating these petitions, courts will need to determine whether that party made realistic efforts to find reasonable substitute employment. In an economy where one sees news stories of former CEO’s who are delivering pizzas and of attorneys who have been laid off tending bar, the question of what is “reasonable” is going to have to change. Expenses for which parents were ordered to pay because they were a customary part of the family’s lifestyle — such as summer camps and private schools — may need to be eliminated to formulate an order that is more appropriate to the parents’ present income.

Beyond the question of ongoing support obligations, it is conceivable that we may see some parties attempt to challenge the finality of property settlement agreements. In a case out of New York, a partner in a law firm is seeking to reopen his 2006 property settlement agreement, under which he paid $2.7 million in cash to his spouse to so that he could keep the parties’ investments ($5.4 million) with Bernard L. Madoff Investment Securities. The husband had so much confidence in the Madoff fund at the time of the parties’ divorce that he was willing to buy out his spouse’s share of the investments.

If the New York court allows this case to proceed, it will open the door for many similar suits, truly muddying the waters for many former spouses who thought their divorces were a “done deal” and that their lives were financially secure. Perhaps Lasik is necessary to correct the economic ills of divorce court. •

Dorothy K. Phillips is the founder and managing partner of DorothyK.Phillips & Associates in Philadelphia. She focuses her practice on domestic relations law. A former family therapist, she is a frequent author and lecturer on a variety of family law issues.

Sydney Coutts Mason, a 1991 graduate of the University of Pennsylvania Law School and former law clerk to the Honorable Stephen E. Levin of the Philadelphia Court of Common
Pleas, is a member of DorothyK.Phillips & Associates. She is admitted in both Pennsylvania and New Jersey.

By: Dorothy Phillips

Article Directory: http://www.articledashboard.com

For more information about Dorothy K. Phillips, visit www.mydivorceattorney.com

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Through A Lens Darkly-the Pervasive Effects Of The Economy On Divorce Are Yet To Be Revealed

By Dorothy K. Phillips And Sydney Coutts Mason
Special to the Law Weekly

The deteriorating economy has become the lens through which we view everything in these difficult days and it has changed our perspective.

There have been many articles in the news recently about the economy’s effect on divorce. Money troubles can place tremendous stress on a relationship, making some people feel it is impossible for them to stay together. But the troubles that many couples are experiencing in today’s financial climate are also making it extremely difficult for them to break apart.

On a very basic level, breaking up is more expensive than staying together because where there was once one household, now there must be two. If there is a shared child-custody arrangement, the expenses for each household are even higher, as each residence must provide enough space and supplies for the children. This may be more difficult for couples to manage in these times, especially if one or both of them is unemployed. Therefore, the media has focused on couples who are putting off divorce because they feel they simply can’t afford to do so. However, deciding not to divorce is not a remedy. The couple needs to find a way to coexist in the same household, without making each other or their children miserable.

Value of the Assets

The couple who decides to go forward with divorce must determine what the economy has done to the value of the marital assets. Historically, the most valuable asset was the marital home. A common method of distribution was to award the home to one spouse who would borrow against the property to compensate the other for his or her share of the property. Often one spouse has a retirement asset that can be awarded to offset the value of the equity in the house. Alternatively, the parties could sell the home and divide the net proceeds. In the past year, values for both of these significant assets have plummeted. The parties may now find they actually owe more on the mortgage than the property could sell for in this current depressed real estate market. These difficult times create a harrowing situation for the court, which bears the responsibility for formulating a fair and equitable distribution of the marital assets.

Courts usually rely upon real estate appraisals to set a fair market value for real property in the marital estate. Appraisals generally use recent sales of comparable properties in the area to come up with a value. But with so few sales occurring, the possibility of such appraisals is limited due to a lack of sales and, thus, a lack of “comps.” The court is then forced to place a market value on the property in a market which many economists argue is broken. Therefore, a reasonable fair market value by historical use of comps is not possible. Banks recently succeeded in arguing it was unfair to require them to use current market values in all cases. Similarly, in the context of equitable distribution, it seems clear that courts are going to have to come up with some means of valuing real property which will satisfy the Divorce Code’s policy of accomplishing economic justice between the parties.

Beyond the question of valuing the property for purposes of equitable distribution, the court and the parties will have to deal with the practical implications of this market as well. If a couple owes more on their house than it is currently worth, how to treat that situation to perform economic justice?

The parties may decide that the best course of action is to hold on to the property, hoping that market values will rebound in the future. A common situation is where one spouse wants to keep residing in the home with the children. Assuming the mortgage payment is affordable for the parties, one solution could be to put off the division of the value of the house. It may be possible to hold on to the property for a number of years, usually until the last child completes school, with the expectation that the property will be sold at the end of that time and the proceeds divided in a specified manner. The benefit of this option is that the parties do not have to risk the value of their investment in the property in the current market. On the other hand, one drawback is that they would have to wait to realize the proceeds. They would have to continue to work together to ensure that the mortgage and property taxes were paid. Also, the party not residing in the property would have to trust that the party in the home would continue to maintain it appropriately.

Once a divorce decree is granted, the fiction of the marital “tenants-by-the-entireties” ends and the parties become tenants-in-common by operation of law. Creditors of either party of a married couple cannot reach tenancy-by-the-entireties property. As to property owned as tenants-in-common, judgment creditors of one party could encumber that party’s ownership interest in the property. A judgment creditor could also file for partition and force the sale of the property. Therefore, exercising this option is not always a safe or wise choice.

Further, holding on to a home until the real estate market “comes back” is not a realistic option for parties who are already experiencing financial difficulties. If one spouse is unemployed or has experienced a reduction of income, the parties may not be able to afford to continue to make mortgage payments. One can envision a situation where a house has become a money pit, requiring exorbitant maintenance expenditures.

What was once their showplace of a home, something that felt totally appropriate when the family unit was intact, may now seem an unsupportable extravagance. An intact family may be willing to be house poor — to pay too large a proportion of their income on house payments and maintenance expenses — for a variety of reasons. However it makes little sense for a couple getting divorced to do so.

In this situation, the parties could try to sell the home in the current market, understanding that they may end up owing money rather than realizing any proceeds from the sale. They are far better advised to negotiate a short-sale for the property, in which case they would make a deal with their mortgage lender to sell the property for less than the property is worth. The lender would then take all the proceeds and mark the loan paid. Another option would be to allow the bank to foreclose on the property. Alternatively, the parties could declare bankruptcy. All of these options would have adverse effects on the parties’ credit ratings. A short-sale might even result in a tax bill from the IRS, as forgiveness of debt may be considered taxable income.

It is therefore conceivable that some parties could become divorced and receive little more than a share of the furnishings from the house, reduced retirement accounts and the family dog, yet still satisfied that they did not get saddled with further debt.

After the Smoke Clears

So you thought your divorce settlement was safe because you finalized it last year, before the economy really went sour. Think again. Sure, you may have dealt with the issue of distributing the marital home, but what about continuing obligations, such as alimony, child support and pay-outs of equitable distribution amounts?

Many have lost jobs, or are earning less, thereby affecting their ability to pay support and/or alimony. Pay-outs for equitable distribution may not be posssible. The poor economy has affected the ability to pay for extras for children, such as private school and camp. A party who has been ordered to pay for support cannot discharge the obligation by filing for bankruptcy: in general, domestic support obligations are excepted from discharge in bankruptcy. The current language of 11 U.S.C. § 523(a) provides, in pertinent part:

“(a) A discharge under … this title does not discharge an individual debtor from any debt … (5) for a domestic support obligation; … (15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit.”

In Pennsylvania, a party may seek modification of a court-ordered amount of alimony “upon changed circumstances of either party of a substantial and continuing nature.” In addition, a
parent may seek a change in a child support order upon a showing of a substantial change in circumstances.

Significant changes in income may qualify as a material change in circumstances thereby warranting a reduction of child or spousal support. Pursuant to Pa. R. C. P. 1910.16-2(d), a voluntary reduction of income generally will have no effect on a support obligation. But the rule does allow for a support reduction when the income reduction is not voluntary: “[A]ppropriate adjustments will be made for substantial continuing involuntary decreases in income, including but not limited to the result of illness, lay-off, termination, job elimination or some other employment situation over which the party has no control.” Pa. R. C. P. 1910.16-2(d)(2).

Even when a parent has lost his or her job involuntarily, he or she cannot go without income indefinitely. Domestic Relations Offices will attach unemployment payments to pay support orders. It is expected that the unemployed party will seek a new job that would pay an appropriate income based on his or her situation, or risk being assigned an earning capacity:

“Ordinarily, either party to a support action who willfully fails to obtain appropriate employment will be considered to have an income equal to the party’s earning capacity. Age, education, training, health, work experience, earnings history and child care responsibilities are factors which shall be considered in determining earning capacity.”

Of course, when the Pennsylvania Support statute and Rules of Civil Procedure became law, this downtrodden economy could not have even been imagined. People today have never experienced such a “recession” as is happening now. Courts will continue to face an increase in the number of petitions for modification as the unemployment rate continues to rise. In evaluating these petitions, courts will need to determine whether that party made realistic efforts to find reasonable substitute employment. In an economy where one sees news stories of former CEO’s who are delivering pizzas and of attorneys who have been laid off tending bar, the question of what is “reasonable” is going to have to change. Expenses for which parents were ordered to pay because they were a customary part of the family’s lifestyle — such as summer camps and private schools — may need to be eliminated to formulate an order that is more appropriate to the parents’ present income.

Beyond the question of ongoing support obligations, it is conceivable that we may see some parties attempt to challenge the finality of property settlement agreements. In a case out of New York, a partner in a law firm is seeking to reopen his 2006 property settlement agreement, under which he paid $2.7 million in cash to his spouse to so that he could keep the parties’ investments ($5.4 million) with Bernard L. Madoff Investment Securities. The husband had so much confidence in the Madoff fund at the time of the parties’ divorce that he was willing to buy out his spouse’s share of the investments.

If the New York court allows this case to proceed, it will open the door for many similar suits, truly muddying the waters for many former spouses who thought their divorces were a “done deal” and that their lives were financially secure. Perhaps Lasik is necessary to correct the economic ills of divorce court. •

Dorothy K. Phillips is the founder and managing partner of DorothyK.Phillips & Associates in Philadelphia. She focuses her practice on domestic relations law. A former family therapist, she is a frequent author and lecturer on a variety of family law issues.

Sydney Coutts Mason, a 1991 graduate of the University of Pennsylvania Law School and former law clerk to the Honorable Stephen E. Levin of the Philadelphia Court of Common
Pleas, is a member of DorothyK.Phillips & Associates. She is admitted in both Pennsylvania and New Jersey.

By: Dorothy Phillips

Article Directory: http://www.articledashboard.com

For more information about Dorothy K. Phillips, visit www.mydivorceattorney.com

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“He was born in New York to a Jewish family and is married to Ruth Madoff. He has homes in Roslyn, New York, Montauk, New York, and an apartment on Manhattan's Upper East Side valued at more than $5 million. He also owns homes in Palm Beach, Florida and France and is a member of the Palm Beach Country Club. He owns a 55-foot fishing boat, named “Bull.”

Through A Lens Darkly-the Pervasive Effects Of The Economy On Divorce Are Yet To Be Revealed

By Dorothy K. Phillips And Sydney Coutts Mason
Special to the Law Weekly

The deteriorating economy has become the lens through which we view everything in these difficult days and it has changed our perspective.

There have been many articles in the news recently about the economy’s effect on divorce. Money troubles can place tremendous stress on a relationship, making some people feel it is impossible for them to stay together. But the troubles that many couples are experiencing in today’s financial climate are also making it extremely difficult for them to break apart.

On a very basic level, breaking up is more expensive than staying together because where there was once one household, now there must be two. If there is a shared child-custody arrangement, the expenses for each household are even higher, as each residence must provide enough space and supplies for the children. This may be more difficult for couples to manage in these times, especially if one or both of them is unemployed. Therefore, the media has focused on couples who are putting off divorce because they feel they simply can’t afford to do so. However, deciding not to divorce is not a remedy. The couple needs to find a way to coexist in the same household, without making each other or their children miserable.

Value of the Assets

The couple who decides to go forward with divorce must determine what the economy has done to the value of the marital assets. Historically, the most valuable asset was the marital home. A common method of distribution was to award the home to one spouse who would borrow against the property to compensate the other for his or her share of the property. Often one spouse has a retirement asset that can be awarded to offset the value of the equity in the house. Alternatively, the parties could sell the home and divide the net proceeds. In the past year, values for both of these significant assets have plummeted. The parties may now find they actually owe more on the mortgage than the property could sell for in this current depressed real estate market. These difficult times create a harrowing situation for the court, which bears the responsibility for formula
1000
ting a fair and equitable distribution of the marital assets.

Courts usually rely upon real estate appraisals to set a fair market value for real property in the marital estate. Appraisals generally use recent sales of comparable properties in the area to come up with a value. But with so few sales occurring, the possibility of such appraisals is limited due to a lack of sales and, thus, a lack of “comps.” The court is then forced to place a market value on the property in a market which many economists argue is broken. Therefore, a reasonable fair market value by historical use of comps is not possible. Banks recently succeeded in arguing it was unfair to require them to use current market values in all cases. Similarly, in the context of equitable distribution, it seems clear that courts are going to have to come up with some means of valuing real property which will satisfy the Divorce Code’s policy of accomplishing economic justice between the parties.

Beyond the question of valuing the property for purposes of equitable distribution, the court and the parties will have to deal with the practical implications of this market as well. If a couple owes more on their house than it is currently worth, how to treat that situation to perform economic justice?

The parties may decide that the best course of action is to hold on to the property, hoping that market values will rebound in the future. A common situation is where one spouse wants to keep residing in the home with the children. Assuming the mortgage payment is affordable for the parties, one solution could be to put off the division of the value of the house. It may be possible to hold on to the property for a number of years, usually until the last child completes school, with the expectation that the property will be sold at the end of that time and the proceeds divided in a specified manner. The benefit of this option is that the parties do not have to risk the value of their investment in the property in the current market. On the other hand, one drawback is that they would have to wait to realize the proceeds. They would have to continue to work together to ensure that the mortgage and property taxes were paid. Also, the party not residing in the property would have to trust that the party in the home would continue to maintain it appropriately.

Once a divorce decree is granted, the fiction of the marital “tenants-by-the-entireties” ends and the parties become tenants-in-common by operation of law. Creditors of either party of a married couple cannot reach tenancy-by-the-entireties property. As to property owned as tenants-in-common, judgment creditors of one party could encumber that party’s ownership interest in the property. A judgment creditor could also file for partition and force the sale of the property. Therefore, exercising this option is not always a safe or wise choice.

Further, holding on to a home until the real estate market “comes back” is not a realistic option for parties who are already experiencing financial difficulties. If one spouse is unemployed or has experienced a reduction of income, the parties may not be able to afford to continue to make mortgage payments. One can envision a situation where a house has become a money pit, requiring exorbitant maintenance expenditures.

What was once their showplace of a home, something that felt totally appropriate when the family unit was intact, may now seem an unsupportable extravagance. An intact family may be willing to be house poor — to pay too large a proportion of their income on house payments and maintenance expenses — for a variety of reasons. However it makes little sense for a couple getting divorced to do so.

In this situation, the parties could try to sell the home in the current market, understanding that they may end up owing money rather than realizing any proceeds from the sale. They are far better advised to negotiate a short-sale for the property, in which case they would make a dea
1000
l with their mortgage lender to sell the property for less than the property is worth. The lender would then take all the proceeds and mark the loan paid. Another option would be to allow the bank to foreclose on the property. Alternatively, the parties could declare bankruptcy. All of these options would have adverse effects on the parties’ credit ratings. A short-sale might even result in a tax bill from the IRS, as forgiveness of debt may be considered taxable income.

It is therefore conceivable that some parties could become divorced and receive little more than a share of the furnishings from the house, reduced retirement accounts and the family dog, yet still satisfied that they did not get saddled with further debt.

After the Smoke Clears

So you thought your divorce settlement was safe because you finalized it last year, before the economy really went sour. Think again. Sure, you may have dealt with the issue of distributing the marital home, but what about continuing obligations, such as alimony, child support and pay-outs of equitable distribution amounts?

Many have lost jobs, or are earning less, thereby affecting their ability to pay support and/or alimony. Pay-outs for equitable distribution may not be posssible. The poor economy has affected the ability to pay for extras for children, such as private school and camp. A party who has been ordered to pay for support cannot discharge the obligation by filing for bankruptcy: in general, domestic support obligations are excepted from discharge in bankruptcy. The current language of 11 U.S.C. § 523(a) provides, in pertinent part:

“(a) A discharge under … this title does not discharge an individual debtor from any debt … (5) for a domestic support obligation; … (15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit.”

In Pennsylvania, a party may seek modification of a court-ordered amount of alimony “upon changed circumstances of either party of a substantial and continuing nature.” In addition, a
parent may seek a change in a child support order upon a showing of a substantial change in circumstances.

Significant changes in income may qualify as a material change in circumstances thereby warranting a reduction of child or spousal support. Pursuant to Pa. R. C. P. 1910.16-2(d), a voluntary reduction of income generally will have no effect on a support obligation. But the rule does allow for a support reduction when the income reduction is not voluntary: “[A]ppropriate adjustments will be made for substantial continuing involuntary decreases in income, including but not limited to the result of illness, lay-off, termination, job elimination or some other employment situation over which the party has no control.” Pa. R. C. P. 1910.16-2(d)(2).

Even when a parent has lost his or her job involuntarily, he or she cannot go without income indefinitely. Domestic Relations Offices will attach unemployment payments to pay support orders. It is expected that the unemployed party will seek a new job that would pay an appropriate income based on his or her situation, or risk being assigned an earning capacity:

“Ordinarily, either party to a support action who willfully fails to obtain appropriate employment will be considered to have an income equal to the party’s earning capacity. Age, education, training, health, work experience, earnings history and child care responsibilities are factors which shall be considered in determining earning capacity.”

Of course, when the Pennsylvania Support statute and Rules of Civil Procedure became law, this downtrodden economy could not have even been imagined. People today have never expe
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rienced such a “recession” as is happening now. Courts will continue to face an increase in the number of petitions for modification as the unemployment rate continues to rise. In evaluating these petitions, courts will need to determine whether that party made realistic efforts to find reasonable substitute employment. In an economy where one sees news stories of former CEO’s who are delivering pizzas and of attorneys who have been laid off tending bar, the question of what is “reasonable” is going to have to change. Expenses for which parents were ordered to pay because they were a customary part of the family’s lifestyle — such as summer camps and private schools — may need to be eliminated to formulate an order that is more appropriate to the parents’ present income.

Beyond the question of ongoing support obligations, it is conceivable that we may see some parties attempt to challenge the finality of property settlement agreements. In a case out of New York, a partner in a law firm is seeking to reopen his 2006 property settlement agreement, under which he paid $2.7 million in cash to his spouse to so that he could keep the parties’ investments ($5.4 million) with Bernard L. Madoff Investment Securities. The husband had so much confidence in the Madoff fund at the time of the parties’ divorce that he was willing to buy out his spouse’s share of the investments.

If the New York court allows this case to proceed, it will open the door for many similar suits, truly muddying the waters for many former spouses who thought their divorces were a “done deal” and that their lives were financially secure. Perhaps Lasik is necessary to correct the economic ills of divorce court. •

Dorothy K. Phillips is the founder and managing partner of DorothyK.Phillips & Associates in Philadelphia. She focuses her practice on domestic relations law. A former family therapist, she is a frequent author and lecturer on a variety of family law issues.

Sydney Coutts Mason, a 1991 graduate of the University of Pennsylvania Law School and former law clerk to the Honorable Stephen E. Levin of the Philadelphia Court of Common
Pleas, is a member of DorothyK.Phillips & Associates. She is admitted in both Pennsylvania and New Jersey.

By: Dorothy Phillips

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For more information about Dorothy K. Phillips, visit www.mydivorceattorney.com

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Who is Bernard L.Madoff?

Another Zionists that rubbed the people of my country, 50 billion dollars, where did he hide the money ?

“He was born in New York to a Jewish family and is married to Ruth Madoff. He has homes in Roslyn, New York, Montauk, New York, and an apartment on Manhattan's Upper East Side valued at more than $5 million. He also owns homes in Palm Beach, Florida and France and is a member of the Palm Beach Country Club. He owns a 55-foot fishing boat, named “Bull.”

Speaking Of Hogs

I also read yesterday that one in five Americans aged 18-34 is obese! Yes, I have noticed the spread widening on Americans as we sidle up to yet our next buffet or super-sized fast food meal.

I personally was in the Las Vegas audience last week when Karl Rove could hardly contain his chortling as he belittled the obesity epidemic we have in America. His slick one-liners rolled easily off his tongue mocking the attention and funds that President Obama’s stimulus plan allots to addressing one of America’s costliest and most debilitating ills. It surely didn’t surprise me that Karl apparently doesn’t care that this generation is the first that is scheduled to live less years than their parents, principally because of obesity.

I say arrest this obesity epidemic now, and yes, earmark funds for public awareness programs and treatments. We need to lead by example, as adults and as a nation. We do want our bodies to last as long as our hearts keep pumping, and we do hope to remain vibrant in our golden years. We do want to be able to move with, and play with, our grandchildren or nieces and nephews. There is hope! The TV blockbuster, Biggest Losers is key evidence that with personal will power and the support of others we can win the fight against obesity. We Can Do It Women! and men too, of course.

Apparently the State of New York heard me and others calling for a healthy America, in recently instituting an obesity tax on certain sugared soft drinks.

Even the military is weighted down with ineffectiveness these days, rendering our very national security more vulnerable. The number of service people diagnosed as obese has more than doubled since the 2003 invasion of Baghdad, Iraq.

At the end of the day, we are talking about a slippery slope with regard to so much of America’s and the globe’s appetite, greed, addiction and/or depression.

I listened to a reformed, yet once-convicted securities representative give an ethics lecture last Friday. He carefully explained that he went step-by-step deeper into oblivion believing he would give only this one kickback; and then never again. Further, how he never figured he’d get caught. His was an addictive game of greed and egotism.

He admitted that the beloved women in his life-both his mother and his wife-warned him o
1000
f his errant ways, yet he willfully broke their hearts, as well as that of his young sons, by continuing his slide into the grips of greed, eventually losing his family relationships and his possessions, and being imprisoned.

Time will tell the full story of Bernie Madoff, and the myriad other Ponzi scheme architects, yet I suspect that decisions became more and more laced with optimism about add-water-and-stir wealth.

Little attention was paid to the prospect of getting caught. The aire of being above the law permeates a crook’s decision making, and in Madoff’s case, nary a care about the individual’s and foundation’s throats he stomped on.

For the record, I’ve never been bankrupt, never committed a felony (or even a misdemeanor) never accepted kickbacks, consistently voted in local and national elections, always worked at least one job (often 2-3) have an exceptional FICO score, great employment history, and haven’t cheated employees or family members. Not sure that’ll make headlines, nor could I be a wildly successful public speaker in the opinion of some yet I do know right from wrong, and I attempt to live by the Golden Rule. Boring yet beautiful. Simple and proud of it.

Values still remain, and a majority of American’s still uphold them. The media needs to search out those who would balance out the negative headlines and showcase the many ball players, military, and business people that play by the rules and enjoy a lifestyle befitting them and their labor/contributions.

So, hearty congratulations to all my readers who achieve greatness in their fields, in their families in their communities and in this fragile global network It all starts in our heads, you know. If we believe we can do it, we can. With the continued commitment towards personal excellence, and with the support of our loved ones we can achieve massive victories.

Congratulations to all my mature women readers who are pushing past their personal fears to begin to understand money and the role it plays in their lives. I am eager to throw a life preserver to you in the form of education and cheer leading regarding your money. With over 30 years of experience investing client’s money, I can help you sift through the mountains of financial information to cull what’s important to your financial future. Your past accomplishments are fodder for your money successes. We’ll use a combination of common sense, history, and future thinking to forge ahead and ultimately ensure that your money will last your lifetimes.

No, we will not succumb to paralysis about our money any longer. We’ll say no to our Bag Lady fears that otherwise rob us of rich moments of our lives when we could be creating memories with our loved ones. We will face our challenges head on, step by step with a winning plan. We will resort to our resolve and discipline and reap the rich rewards, all without ever needing to cheat.

Congratulations on reintroducing the word NO back into our language, and meaning it. No to unlimited buffets, no to unlimited profits, no to drugs, no to unfair business practices, no to dog-eat-dog greed, no to becoming addicted, and no to staying addicted.

In essence then, once our NO is taken seriously-principally by us-then our YES begins to have much more meaning. Yes to HOPE, yes to continued hard work, yes to pitching in, yes to opportunity, yes to education, yes to studying something new, yes to mastering our money, yes to health, yes to living our lives fully, yes to giving back. Yes, yes, yes, We Can Do It Women!™

By: Debra L. Morrison

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Debra L. Morrison is a sought after international 1000
nspeaks.com/money/investing/" rel="nofollow" target="_blank">motivational speaker who motivates audiences of mature women to master their finances, through generous helpings of humor and analogy. Debra’s special personal attributes, coupled with her wealth of experience gained from heading her own firm for 14 years.

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Back with more news for you today. It’s amazing how much good information there is on this stuff out there if you know where to look. Three in particular that I found really valuable were…

News Dissector Blog » Blog Archive » Daily FINANCIAL CRISIS …

The stakes are high for the administration, particularly with a weak economy, anger about huge Wall Street bonuses and outrage that securities regulators missed one of the biggest frauds in U.S. history involving Bernard Madoff, …. no signs of slowing down – for a variety of reasons, such as a healthier environment in which to raise children, a warmer climate, inexpensive healthcare, an affordable and relaxing retirement destination and, more than ever before, a job. …

Bernard Madoff: Thuggish with Wall Street Swagger | Education News …

The Anatomy of a $50 Billion Dollar CrookThe recent reports on Bernard Madoff, founder of Bernard L. Madoff Investment Securities, forced me to examine how we. … The hottest impression upon children's radio currently is a Sesame Street Muppet Abby Cadbby. And right away she will be carrying her unequivocally own shred upon a renouned children's radio uncover Sesame Street when a mythological uncover earnings for it's 41st season. In this essay we will assistance you …

Bernie Madoff Eats Pizza Cooked By Child Molester, Spends Time …

NEW YORK — Fallen financier Bernard Madoff has plunged from his Manhattan penthouse to the lower bunk of a cell he shares with a drug offender at a federal prison, where he eats pizza cooked by a child molester and hangs around with a …

Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.

Have a great day!

My question is on the so many mutual funds and so many ETFs in the market.

Q1 Are they safe from fraud like that of Bernard Madoff? I personally don't thing that SIPC covers the situation like Bernard Madoff?

Q2. The mutual fund value- does it truly reflect the underlying assets? Or some companies may be initially pumping them up.

Q3. There are companies they offer 100+ mutual funds, are not they manipulating the price of under performing mutual fund with good performing mutual fund? _ any example from history.

Q4. What will happen to VFINX if Vanguard goes bust?
FSMKX – What if Fidelity goes bust?
DODGX – What if Dodge and Cox goes bust?

This question Q4 can be applied to ETF and ETN like SPY, QQQQ, DIA, EFA, EEM, OIL, GLD, VNQ, MDY, XLF, USO, IWM, IIF, IFN, RWR, PSP,

Thanks

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If you’ve been keeping up with my blog posts lately you’ll know I’ve come to adding a few news posts from around the web on this subject. I’ve got a couple more today that are new and updated, so let me know what you think of em…

News Dissector Blog » Blog Archive » Daily FINANCIAL CRISIS …

A truckload of Americans was caught sneaking into Mexico . Dick Cheney took his stockbroker hunting. Motel Six won't leave the light on anymore. The Mafia is laying off judges. Exxon-Mobil laid off 25 Congressmen. … The stakes are high for the administration, particularly with a weak economy, anger about huge Wall Street bonuses and outrage that securities regulators missed one of the biggest frauds in U.S. history involving Bernard Madoff, who bilked investors of as …

Madoff: "Amazing To Me" I Wasn’t Caught Sooner | NBC New York

Other interviews released include statements from the former SEC head said he was unaware of any past complaints about Madoff. All of the documents released can be found on the SEC Inspector General's Web site. Bernard Madoff & His …

Crazy On Tap – 2 former Madoff programmers arrested

>Bernard Madoff was caught by Federal Correctional Officers removing fruit from the dining hall after the noon meal. >Inmates say that Madoff was caught red handed by a rookie cop on the way out the door, and the cop had a history of …

Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.

Have a great day!

Technorati Tags: Bernard Madoff 2007, Bernard Madoff Caught

Ok so you might find the next few links interesting. These are from around the web, just random snippets that I’ve picked up in my reading, but I found some very cool information in them. You might too. Here goes…

Two Former Computer Programmers for Bernard L. Madoff Charged with …

FBI Assistant Director-in-Charge DEMAREST stated: "O'Hara and Perez are charged with being instrumental in facilitating the Ponzi scheme that was the Bernard Madoff investment advisory business. Their subterfuge was designed to conceal …

Bernard Madoff’s jacket, watch auctioned in NYC – Business …

NEW YORK — It was about fascination with big money — and the life of a couple at the center of the biggest financial fraud case in U.

Bernard Madoff’s jacket, watch auctioned in NYC

Bernard Madoff's jacket, watch auctioned in NYC, NEW YORK – Items once belonging to Wall Street swindler Bernard Madoff (MAY'-dawf) and his wife have fetched as much as 20 times their estimated value at a New York City auction.

Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.

Have a great day!

THAT GUY HAS TAKEN EVERYONE TO THE CLEANERS! GREEDY ISNT THE WORD!

Technorati Tags: Bernard Madoff Business, madoff

Who is Bernard L.Madoff?

Another Zionists that rubbed the people of my country, 50 billion dollars, where did he hide the money ?

“He was born in New York to a Jewish family and is married to Ruth Madoff. He has homes in Roslyn, New York, Montauk, New York, and an apartment on Manhattan's Upper East Side valued at more than $5 million. He also owns homes in Palm Beach, Florida and France and is a member of the Palm Beach Country Club. He owns a 55-foot fishing boat, named “Bull.”

Free Tools Available To Manage The Personal Finances

Many errors in personal finance can be prevented. But first, people need to understand what they ought to do, says the Nobel Prize Winner and economist Robert Shiller. It is true that many people bet in markets and do investments that they do not understand. They follow the advice of friends that boost about their expertise. How could it happen that so many prominent personalities have got trapped in the Madoff case? They just handed him over their assets because they heard from others saying that it must be a safe and profitable investment. Others follow blindly the herd of small investors if a new bubble blows itself up. Everybody fears to miss a unique opportunity to make fast money, but the investment cycle is already in a late status. The crash is near if the herd of small investors start to invest at the all time high prices of assets  and most of them will be the losers. The professional investors already have moved out.

Education and common sense are needed

The People need to be able to make up their mind independently. They should learn about the basics in financial markets, personal finance and investments. Why? Independent and competent advice is rare. The big rating agencies have failed. They have valuated the assets that have turned out to be toxic with a Triple A. They are not independent because they are paid by the borrower of the money, not by the lenders. The clients also may not rely on the advice of their banker, even if they know him for years. The portfolio adviser at the bank is not independent. His target is not to make the bankers client rich. He has at first to achieve the turnover targets of the bank. His bosses tell him which and how much securities he has to sell to his customers.

The people have to help themselves

The people should acquire some basic knowledge to settle their money management. There is a lot of literature about financial market science, portfolio management, real estate investments offline as well as online. There are some rules of thumb that are valid for all situations:

People should learn and understand what they do and how specific securities work.
1. They should abstain from unclear financial instruments that are difficult to explain.
2. They should be aware that
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high yields mean high risks.
3. They should not follow blindly hot tips by their friends.
4. They should question and question their bank adviser. They should not feel ashamed if they do not understand anything. If that is the case, it is time to be alert.
5. They should not follow the herd of small investors, if everybody believes in an endless, money creating boom. The crash of the bubble could be close.

Free Tools to Manage the Personal Finance

Make Money Tip offers a free toolbox with a multitude of useful tools that can assist in the money management. There are tools to calculate and valuate investments in bonds, stocks, options, real estate. Other tools serve to manage the personal finances and help in the field of mortgage calculation, credit card and auto loan calculation. They show what is needed to get debt free. There are forex tools and an introduction to forex trade. And there is background information in the field of ethical and green investments available. A comprehensive glossary helps the visitors to learn about the terms in the financial world. More about how to make money can be read at the Make Money Tip website.

Liliane Waldner

By: Lil Waldner

Article Directory: http://www.articledashboard.com

Liliane Waldner is a business economist. She has attended the board of several public entities companies and pension funds, some of them dealing with the financial markets. Her website is: Make Money Tip

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