Missouri Divorce and Family Law Blog : Kansas City Divorce Lawyer & Attorney : Wortman Law Firm

With so many people facing bankruptcy in the current climate, it may be good news to know (depending on which side you are on, of course) that the bankruptcy does not allow a person owing a domestic support obligation to use bankruptcy as a way to avoid payment of the debt. In fact, virtually any obligation that is domestic in nature cannot be discharged in bankruptcy. Here are a few facts:

• A domestic support obligation is not dischargeable in a Chapter 7 or Chapter 13 consumer bankruptcy proceeding. 
• “Domestic Support Obligation” is a debt that is owed to or recoverable by a spouse, ex-spouse, or child of the debtor or their guardian or representative, or a governmental unit (such as the Children’s division or the Court). This includes alimony, maintenance, child support, state assistance, even if the debt is not titled exactly in that manner. Also included is a debt arising out of a separation agreement, divorce decree, or property settlement agreement.
• Also non-dischargeable in a Chapter 7 is any debt to a spouse, former spouse, or child not described above 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. Any debt that falling under this section may be dischargeable in a Chapter 13 debt adjustment, however.
• Domestic Support Obligations receive the number 1 priority for repayment in a Chapter 13 plan or when funds are available in a Chapter 7 bankruptcy estate.
• To summarize, if it is domestic in nature, it is going to have to be paid. This includes not only child support or maintenance, but also property and debt divisions, such as: marital estate equalization payments, payments in settlement, qualified domestic relations orders, contempt payments, divisions of debts, vehicle debts, mortgages, credit cards, lines of credit, personal loans, medical insurance, costs for non-covered medical care, retirement plan divisions, military retirement divisions, attorney fee awards, and the kitchen sink.
• No special language is necessary in the divorce settlement or decree to make these provisions apply, although it may be a good idea just to drive the point home.

• Email This
• Print
• Comments
• Trackbacks

For the purposes of calculating child support in Missouri, the Form 14 calculation is used.  The starting point is the Gross Income of the parties.  So, what does that include and what exactly does it mean?  The following is a summary of the official comments and relatively recent court rulings on the definition.

“Gross income" includes, but is not limited to, salaries, wages, commissions, dividends, severance pay, pensions, interest, trust income, annuities, partnership distributions, social security benefits, retirement benefits, workers' compensation benefits, unemployment compensation benefits, disability insurance benefits, veterans' disability benefits, and military allowances for subsistence and quarters.

Overtime compensation, bonuses, earnings from secondary employment, recurring capital gains, prizes, retained earnings and significant employment-related benefits maybe included, in whole or in part, in "gross income" in appropriate circumstances.

Excluded from "gross income" is temporary assistance for needy families (TANF) payments, Medicaid benefits, supplemental security income (SSI) benefits, food stamps, general assistance benefits, other public assistance benefits having eligibility based on income, and child support received for children not the subject of this proceeding.

If a parent receives rents or royalties or is self-employed, in a sole proprietorship, or business with joint ownership, "gross income" is gross receipts minus the ordinary and necessary expenses incurred to produce such receipts.  

"Income" for purposes of computing the presumed child support amount consists of a financial benefit or money received by a parent that could have a positive impact on the parent's ability to support the parent's children.

Overtime Compensation

When determining whether to include overtime compensation, the Court must consider (1) Periods of temporary child custody, (2) The motivation of the parent working the overtime over the last three years. (3) The amount of the overtime. (4) The expectation that the overtime will continue, (5) additional dependents.

Overtime may be included in a parent’s yearly gross income in appropriate circumstances.  The Court must consider all relevant factors, including the realistic expectation that a parent who receives a bonus or overtime will continue to do so.  The court can ignore income history and look at a single year's income figure if it finds that figure to be the most accurate predictor of a parent’s income

Bonus and Significant Employment Related Benefits:

The same 5 factors listed above apply to bonus income. Additionally:

Bonuses are discretionary, and the court may accept or reject the reliability and pattern of bonus income. 

Expense reimbursements should not be included in monthly gross income on Form 14 because such reimbursements are a repayment or indemnification, which is compensation for loss or damage, as opposed to a benefit, which is profit or gain.

Next Installment:  Imputed income

• Email This
• Print
• Comments
• Trackbacks

On October 8, 2009 the Supreme Court of Missouri issued an order repealing the current child support guidelines and the formula for calculating the child support amount (Civil Procedure Form 14); and ordered new child support guidelines to take effect as of January 1, 2009. 

The changes to the child support guidelines include the following:

• Credit to paying parent for other children in their custody means other children primarily residing with that parent.
• Increase in the amount of income for the custodial parent in order for the non-custodial parent to claim a credit for nights of overnight parenting time
• Definition of split custody means when one or more, but not all, of the children primarily reside with each of the parents
• One factor for consideration to deviate from the presumed amount of support based on income increases from $20,000 to $30,000
• Assumption that non-duplicated fixed expenditures percentage of the basic child support amount does not vary even with split custody
• Maximum credit for overnights on line 11 is 34%
• 2007 Child Care Tax Credit Table Incorporated
• Increase in Basic Support Amount schedule
• New Form 14

To see a complete copy of the new guidelines, click here. For the new Basic Support Amount Schedule, click here

• Email This
• Print
• Comments
• Trackbacks