Ask a Divorce Lawyer: Is severance pay considered “employment income” used to pay support and alimony?

Question: I reside in Indiana. I have recently lost my job, but I am receiving 6 months severance pay. I am paying both child support and spousal maintenance. 

My divorce agreement (Property Settlement Agreement) states that spousal maintenance ceases upon loss of employment, but does not specifically mention whether receipt of severance pay is considered “employment income.” 

Under the agreement, do I still pay spousal maintenance from severance pay, or can I suspend payments until I obtain a new job?

 

 

Answer:

You need to contact an attorney immediately.  I do not practice in Indiana.  However, Cordell & Cordell has many attorneys licensed and located in Indiana who would be happy to help.  

Generally, even if you are no longer obligated to pay, you cannot just suspend the payments.  This is especially true when there is an income withholding order.  Someone has to file a motion with the Court to terminate the support payments.

From what you are stating, your divorce decree is not entirely clear as to when the obligation ends. Do the support payments continue if you find a job a month later?  Your attorney should review the provisions of your decree to determine whether another provision of the decree or Indiana law governs the answer to this question.  

You need to talk to the attorney prior to suspending payments.  If suspending payments is viewed as violating the divorce decree, you could face a contempt action.  In addition, interest may accrue during the time you are not paying.

 

Erica Christian is an Associate Attorney in the Milwaukee, Wisconsin, office of Cordell & Cordell, P.C. She is licensed to practice law in the state of Wisconsin. She is a member of the Wisconsin Bar Association, the Family Law Section and the Children’s Law Section.

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