Can Section 71 payments be reduced if I lost my job?

Question:

In lieu of my ex-wife taking part of my retirement pay and not having to pay her maintenance, I agreed to pay her Section 71 payments for a set amount of years.

However, I have since changed jobs to a lower-paying position, and I can no longer afford the ordered payments.

Does the usual standard for modification of maintenance apply to Section 71 payments?

Answer:

Unfortunately with Section 71 payments in Wisconsin, there is very little that you can do. It seems as though Section 71 payments were made in lieu of maintenance and to equalize the property division. The usual standard for modification of maintenance does not apply.

Section 71 payments are attractive at the time of divorce for several reasons; there are usually tax benefits, and there is an insurance that she will not come back to court and seek higher payments – you know what the amount is and it is set.

However, that is also the risk. Just as she cannot come back and ask the court for more money from you, you also cannot seek a decrease in the payments. The usual standard of a substantial change in circumstances does not apply.

It is likely your best option to consider making an offer to her of one of the assets required the payments in the first place. You could essentially buy out the remaining payments. It may be attractive to her because she would get the money up front, and it would work for you because it would relieve the monthly payment amount.

Essentially, you would be figuring out how much you still need to pay her and discounting it an agreeable amount because she would be getting it up front instead of over time. This is only an option if she is willing to work with you.

The court would not likely order this unless she requested it. This is because the court has to enforce the order.

If you have fallen behind on the payments, you are in contempt. The court then has to look at whether you have the ability to pay.

Because the payments are Section 71 payments, the court does not have the authority to modify; it only has the authority to accept an agreement that the two of you make to modify the prior agreement.

You should contact a domestic litigation attorney in your area to discuss your case and your options.

Cordell & Cordell had attorneys licensed and located in Wisconsin, and they would be happy to discuss your case with you.

 

Angela Foy is an Associate Attorney in the Milwaukee, Wisc., office of Cordell & Cordell where her primary practice is exclusively in the area of domestic relations. Ms. Foy is licensed to practice in the state of Wisconsin, the U.S. District Court, and the Eastern District of Wisconsin. 

 Ms. Foy received her Bachelor’s and Master’s Degrees from the University of Notre Dame. She then continued on to receive her Juris Doctor from Marquette University.