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Coronavirus Aid, Relief and Economic Security Act (CARES Act) in Effect Now

If you have been paying attention to the news lately, you will likely have heard reports that Congress is interested in passing another stimulus bill that will seek to strengthen or at least maintain the current state of the economy until the coronavirus pandemic passes us by. It was about a month ago that an additional unemployment credit of $600 stop 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 the nation will 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 with 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 That was intended to provide relief to individuals and businesses whose economic prospects word damaged as a result of the coronavirus and more specifically because they stay at home and quarantine orders instituted by various governments around the country. This piece of federal legislation Stands to impact different people in different ways. Here are some of the ways that the bill may have impacted you and your family during the past few months.

It is likely that you received direct payment of $1200 as a result of your having paid taxes this past year. If you are married and filed jointly with your spouse, then you all would have received a direct payment of $2400. For each child that 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 was over $75,000 as an individual or $150,000 as a married couple in 2018 then you would not have been eligible for the full 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 as a result of the economic shutdown we saw instituted by the government in March and April. Many industries became obsolete, or at least temporarily obsolete, due to the social distancing guidelines implemented by the government. As a result, unemployment insurance was bolstered under this act of federal legislation. If you are responsible for paying child support, spousal maintenance or anything else as a result of a family court order this could have served as a much-needed lifeline for you and your family. 

Specifically, 250 billion dollars was added onto the existing insurance programs in place for unemployment. The July 25th date which I mentioned earlier in this blog post which dealt with the extension of unemployment benefits after the state of Texas stopped paying them originally has since come and gone. Additionally, at the end of July a $600 per week additional payment that had been 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 of you 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 simply take our retirement for granted. A relatively small percentage of our paychecks go into account that is 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 important retirement savings are to you and your future. 

Under this federal legislation, a 10% penalty on early withdrawals from your 401K or other retirement vehicle have been waived up to $100,000. you would need to be able to show that you are experiencing difficulties that are directly related to the coronavirus pandemic for this penalty to be waived. 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 who has been diagnosed with the virus then you would certainly qualify for a waiver of this penalty. You would also qualify were you 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 reading this blog post, own small businesses. The backbone of our economy is formed in large part by small businesses 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 were 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 largest concern for most businesses during this pandemic is in relation to making payroll each month. From what I have heard in red many businesses used these loans to fund payroll until they could get their feet back 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 actually been hit for years to come. For now, the best we can probably do is take a look at the short-term and immediate implications of the virus and the shutdowns in the economy that resulted as a result of our governmental response to it. Those of you 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 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. In order to start a business, and keep it solvent, you need to figure out where you are going to get your funding from. Many people look to investors and loans as a way to start a business. As long as you are able to repay the investors or repay the loans then 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 in order to start an important 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 are able to work hard for you and your family during this time. 

Once you have figured out how you are going to pay for your family law case the next step you need to consider is what are 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 then your main source of income will at least have been temporarily disrupted. This is not a good thing especially when you need to paying attorney, and then plan for having to pay child support and/or 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 paycheck and the amount of each payment. If there is any disruption to your income or to your ability to receive a paycheck then you will have difficulty in paying your child support on time and in full each month. This can have a negative impact on the budget of your ex-spouse as well as on the daily life of your child. 

If you have lost your job due to the coronavirus pandemic then you probably have begun to be concerned about your ability to pay child support. Keep in mind that the occurrence of a pandemic or any other bad set of circumstances for that matter does not abrogate 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 be monitoring your employment and checking in with you to make sure that you have the funds to pay your child support. Either you have the money to pay or you don't.

In the event that you find yourself not being able to pay child support then You will need to contact your Co parent as well as the office of the attorney general child support division. Over the course of 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.

It may be that you need to file a modification Request with the court to alert them to the fact 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 have it reduced significantly. Again, this cannot happen unless you do something about it in terms of filing a lawsuit or at least notifying the office of the attorney general 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 you are looking for a full-time job or attempting to transition 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 a great opportunity for you to learn about Texas family law as well as the services that our office can provide to you and your family as clients. 

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