Suppose you have been paying attention to the news lately. In that case, you will likely have heard reports that Congress is interested in passing another stimulus bill that will seek to strengthen or maintain the current state of the economy until the coronavirus pandemic passes us by. About a month ago, an additional unemployment credit of $600 stopped being paid, and I imagine that many families are beginning to feel the hurt of this reality. With so much up in the air in terms of the economy Anne how quickly will the nation be able to cover financially after the coronavirus? It is thought that these stimulus bills or what we need at this time.
Although this law was passed in late March or early April, you may still be unclear as to what the main points of the law say and how they would have impacted your family. Let's take some time to discuss the details of the original cares act. Once we have done this, we can talk in greater detail about how financial issues may impact you and your family right now from a family law perspective.
The full name of the CARES act is the Coronavirus Aid, Relief, and Economic Security Act. Around 2 trillion dollars were included in this legislation. It was intended to provide relief to individuals and businesses whose economic prospects were word damaged due to the coronavirus. More specifically, they stayed at home, and various governments around the country instituted quarantine orders. This piece of federal legislation Stands to impact different people in different ways. Here are some of how the bill may have affected you and your family during the past few months.
You likely received a direct payment of $1200 due to your having paid taxes this past year. If you are married and filed jointly with your spouse, you all would have received a direct payment of $2400. For each child you have under the age of 17, the government would have paid you an additional $500. Higher-income earners or not eligible for these payments in full. If your income were over $75,000 as an individual or $150,000 as a married couple in 2018, then you would not have been eligible for the total amounts that I mentioned a moment ago. Once your income reaches approximately $100,000 as an individual or $200,000 as a married couple, you would not be eligible for any stimulus from the government.
Unemployment benefits explained under the stimulus bill
it may be the case that you lost your job due to the economic shutdown we saw instituted by the government in March and April. Many industries became obsolete, or at least temporarily outdated, due to the social distancing guidelines implemented by the government. As a result, unemployment insurance was bolstered under this act of federal legislation. Suppose you are responsible for paying child support, spousal maintenance, or anything else resulting from a family court order. In that case, this could have served as a much-needed lifeline for you and your family.
Specifically, 250 billion dollars was added to the existing insurance programs in place for unemployment. The July 25th date that I mentioned earlier in this blog post dealt with the extension of unemployment benefits after Texas stopped paying them initially has since come and gone. Additionally, at the end of July, a $600 per week additional payment was made to people on unemployment benefits stopped as well. Contractors, self-employed people, and those of us who work in nontraditional fields in our paid nontraditionally were supposed to be helped by this additional measure to bolster the unemployment set up.
How did the CARES act impact retirement savings?
Those who have gone through a divorce in Texas or are going through one now understand the importance that retirement savings can play in a divorce. Many times, we take our retirement for granted. A relatively small percentage of our paychecks go into an account intended to benefit us 30, 40, or even 50 years into the future. It is hard to get excited on a day-to-day basis about money that we will not see for years in years. However, going through tough times should bring to your attention just how vital retirement savings are to you and your future.
Under this federal legislation, a 10% penalty on early withdrawals from your 401Kor other retirement vehicle has been waived up to $100,000. You would need to show that you are experiencing difficulties directly related to the coronavirus pandemic to waive this penalty. For example, if you have been among the unfortunate people to have been diagnosed with the virus, or if you have a spouse or child diagnosed with the virus, you would certainly qualify for a waiver of this penalty. You would also be eligible to lose your job.
Does the CARES act have any impact on small business owners?
Southeast Texans have a long and proud heritage of being independent and small business-minded. Many of our clients, and I'm guessing many of you are reading this blog post, own small businesses. Small businesses primarily form the backbone of our economy, and time will tell the ultimate impact of the coronavirus and the government shutdowns of the economy on small businesses.
With that said, if you own a small business, you are eligible to apply for a paycheck protection loan. This loan comes from a program that would have provided you with two months of money to help you with any problems with deficits in cash flow. The most immediate and most significant concern for most businesses during this pandemic is making payroll each month; from what I have heard in many red, companies used these loans to fund payroll until they could get their feet underneath them.
What does the CARES Act mean to you as a person involved in a Texas family law case?
The financial impacts of the coronavirus are such that we will not even be able to determine how hard we have been hit for years to come. For now, the best we can probably do is look at the short-term and immediate implications of the virus and the shutdowns in the economy that resulted from our governmental response to it. Those who are going through a Texas family law case or are at least considering filing a family lawsuit should pay close attention to these key points that relate to the economic problems created by the virus and your role in a Texas family law case.
Starting a family law case is almost like starting a business. To create a business and keep it solvent, you need to figure out where you will get your funding from. Many people look to investors and loans as a way to start a business. As long as you can repay the investors or repay the loans, there is no problem with this method. Likewise, you may be in a position where you need to rely on loans, your credit card, or other types of financing to start a critical family law case. Our law office is flexible as to how we receive payments so long as your bills are paid. We want to make sure that our attorneys and staff can work hard for you and your family during this time.
Once you have figured out how you will pay for your family law case, the next step you need to consider is the financial aspects of a divorce or child custody case that will be most critical to you and your family right now. This is bearing in mind that if you have lost your job, your primary source of income will have been temporarily disrupted. This is not a good thing, especially when you need to pay an attorney and then plan to pay child support and spousal support of some sort once your divorce is complete.
Child support and income problems caused by the coronavirus pandemic
There is a direct relationship between your income and your ability to pay child support. Child support is typically taken out of your paycheck each month under a wage withholding order. That wage withholding order specifies the frequency with which payments are to be removed from your compensation and the amount of each payment. If there is any disruption to your income or your ability to receive a salary, you will have difficulty paying your child support on time and in full each month. This can hurt the budget of your ex-spouse and the daily life of your child.
If you have lost your job due to the coronavirus pandemic, you probably have become concerned about your ability to pay child support. Keep in mind that the occurrence of a pandemic or any other lousy set of circumstances, for that matter, does not nullify your need to pay child support in the agreed amount and on the agreed dates. The judge from your divorce or child custody case will not monitor your employees and check-in with you to ensure that you have the funds to pay your child support. Either you have the money to pay, or you don't.
If you find yourself unable to pay child support, you will need to contact your Co-parent and the office of the attorney general child support division. Over the past few months, you may have become reliant upon unemployment checks or the initial payments from the government as far as paying your bills, including child support. However, now that many of the extended benefits of the CARES act have expired, you may find yourself with less money in your bank account than you had become accustomed to. If this describes your situation, you cannot rely upon anyone else to be proactive about your inability to pay the child support.
You may need to file a modification request with the court to alert them that you do not have an income right now. Your ability to pay child support is determined by your monthly net income as well as by how many children you are responsible for caring for. If your income drops to zero, you will not have your child support obligation waived, but you can significantly reduce it. Again, this cannot happen unless you do something about it in terms of filing a lawsuit or at least notifying the attorney general's office, who may be able to do the same.
On a practical level, if your income has been cut significantly and you are feeling a pinch financially after your unemployment benefits were cut at the end of July, it would make sense for you to attempt to work out a payment plan directly with your Co-parent. By doing so, you may be able to avoid having to go to court and speak to a judge about formally modifying your child support order. You can attempt to find part-time work while looking for a full-time job or transitioning into a new career. However, the last thing you want to do is nothing at all.
Questions about the material contained in today's blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the material presented in this blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week in our office, over the phone, in via video. These consultations are an excellent opportunity to learn about Texas family law and our office's services to you and your family as clients.