Emma Finnerty
Marriage is so common that 90 percent of people living in Western society will experience it before age 50, according to the American Psychological Association. Sadly, 40 to 50 percent of those unions will inevitably end in divorce.
Unfortunately, I fall into that 40 to 50 percent bracket. My name is Paul Smith,* and this is my divorce horror story.
I’ve worked hard, obeyed the law, and paid my taxes. I believed in the twin pillars of truth and justice. But those last two principles were shattered at the unclean hands of the great state of New York and its legal system.
The nightmare started with legal papers requesting a divorce. In disbelief, I learned that my working ex-wife demanded 70 percent of my take-home pay in monthly alimony and child support payments. For anyone looking at a divorce in 2019, the laws have shifted a bit. It’s important to understand that so that this story doesn’t haunt anyone about to go through the motions; there may yet be some good news in store for you, depending on your situation.
Alimony Horror Stories
For those living in the U.S. in 2019, the divorce and alimony processes have been recalibrated on a federal level. As of December 2018, new alimony tax laws, which are much different from what they were when I was suffering through my legal separation from my ex-wife, went into effect.
In any divorce filed after Dec. 31, 2018, the one paying alimony can no longer deduct it, and the one receiving that money no longer has to pay taxes on it. The whole model has been literally inverted.
“The guidelines for alimony are generally set by the state. For alimony agreements before Jan. 1, 2019, alimony is deductible on the payer’s taxes and included as income on the recipient’s,” says Beth Logan of Kozlog Tax Advisers. “For agreements in 2019 and forward, alimony is not deductible nor included as income.”
While this may make the process of divorcing significantly more sensitive and emotional for the couples involved, congressional tax writers believe it’s only fair to married couples.
My Experience
I, however, got divorced prior to this legislation. Even saving a few thousand dollars on taxation may have made it more bearable. However, I couldn't wait for that one time a year when I could file my income tax and pray that the government would give me some money back.
I’d worked hard for my degrees and my career. While I could see the reason behind paying up to 50 percent of my income, I reached a mental block at paying three-quarters of my income.
I tried to negotiate, but the other side wouldn’t budge. Outraged, I believed that the divorce courts couldn’t possibly side with such a demand.
This was the equivalent of a six-figure income. I was determined to fight it.
I was wrong, which is how it came to be that, years later and six figures in legal fees poorer, I was to sit in the courtroom and hear a judge grant my ex-wife a sum that amounted to 75 percent of my take-home pay in alimony and child support. She also received the lion’s share of assets and a large chunk of my pension, and I received all of the debts — credit card debt, IRS debt, mortgage debt. I also had all my rights as a parent systematically stripped away, but that is another story.
Divorce Horror Stories: Untying the Knot in New York
New York had already become a “no-fault” state by the time my divorce process started. Many people incorrectly believe that in a “no-fault” state, assets and debts are simply split down the middle. That isn’t true. Assets and debts are distributed according to the rules of “equitable distribution.” This means that the court takes many factors into account, including the incomes of the parties, their perceived needs, and “any other factor the court deems relevant.”
If there’s a big discrepancy between the parties’ incomes, the higher earner will usually receive more of the debt and the lower earner will receive more of the assets. The rationale is that it’s easier for the high earner to get back on his or her feet again. Likewise, if the lower earner has a child to support, the court will again assume that it takes more money to support both an adult and a child than an adult alone. Therefore, more of the money will be allocated to the parent with the child.
Until you’ve experienced the divorce process, you simply won’t believe how expensive, biased, and corrupt family court is; the willful blindness of the system; or the depths to which your ex-partner can plumb. The process is akin to stepping into the second circle of hell. Exposed to the worst side of human nature, the experience will forever change you.
What Happened to My Finances After Divorce
After the divorce court judgment, I struggled on hopelessly for a while. My employer deducted my payments, and what remained of my salary wasn’t enough. After paying my bills, I had $50 for food and $50 for public transport to work.
On Sunday, I would cook a pot of vegetable stew and eat that with bread every night for the week. I had no other meals.
My apartment was unheated. I stopped buying clothes, skipped dentist visits, and cut unnecessary expenses. I sold my one remaining asset, my car. Yet I still had to borrow money from my brother or from a friend, as I was drowning in debt.
I often had nightmares, and I woke up with a feeling of dread every morning. I wanted to appeal the judgment, but my attorney turned his back because I owed him a hefty sum. Both my parents had already died, and with my wife and child gone, I felt utterly alone. A month late with rent and threatened with eviction, I fell to my lowest weight in 20 years. I still had insomnia and nightmares and was taking tranquilizers. I often went hungry.
Kind friends would sometimes buy me lunch. I felt wretched. I couldn’t believe that I could be an educated professional, working long hours in a well-paid and demanding job, and yet be reduced to wearing socks with holes and eating vegetable stew in an unheated apartment. Meanwhile, my ex-wife bought new cars and a wardrobe of designer gear to wear on vacations with her live-in boyfriend.
Further Financial Hardship
Then I lost my job. The job market was stagnant, and the salary at a new job on offer was lower. I was told that it was unlikely that the court would agree to adjust my payments downward. An attorney told me that the IRS would assume that I was “intentionally underemployed” and so would “impute income” to me.
I realized that I no longer had the right to choose my own employment. I calculated that the best scenario meant that I would be working for the next 15 years just to straighten out my finances after divorce; that I could never again own a home; and that because my ex-wife had been granted a large chunk of my pension, I'd never be able to afford to retire. I felt that I had effectively received a life sentence. It was hopeless. I felt like I was starting over with nothing after the divorce.
The IRS demanded a vast sum of money in joint back taxes from the marriage. It threatened to deduct even more of my income, since the IRS can legally deduct almost all of your income, leaving you with just a few hundred dollars a month. That doesn’t go far in New York City, and I was refused food stamps and welfare. To avoid ending up on the street, I made an arrangement with the IRS to make regular payments, which I still couldn’t afford. I paid the first installment using my food money. But time was clearly running out for me.
Starting Over With Nothing After Divorce
I was in despair that the divorce courts had treated me so badly. But I refused to be a burden to my family or friends. I began to view the homeless on the streets in a new light and wondered how it would feel to join their ranks.
I secretly planned suicide several times and made concrete plans as to how I would do it, but I never actually set the date to kill myself. Now I’m incredibly relieved that I didn’t go through with it. Instead, I try to forget and view every sunset on this distant shore as a blessing.
The only viable option apart from suicide was to leave the country. It became a logical matter of survival and of preserving my right to be free and not a slave.
I determined that I would vanish. That I would stick it to the man and the corrupt legal system and rebuild my life.
That said, you may have more options than you realize if you find yourself buried under debt. For example, American Debt Enders offers a wide variety of services, including free credit counseling.
A Final Thought on Divorce Horror Stories
Sometimes the invisible waves of recollection flow outward from my old life. The shout of color in the fall and the caressing warmth of kitchens. The leaf-dappled sunshine on the brownstones. The face of my child.
The Big Apple tries to pull me back — to pull back one member of its shadowy army of dispossessed and persecuted ex-spouses. It always has, and it always will, until maybe even the last of us comes home.
In my next article, I’ll cover financial tips for surviving the divorce process that your attorney may not tell you.
This is the first installment of a multi-part series by Paul Smith. The next piece is “How to Survive Divorce: Tips Your Lawyer May Not Share.”
*Name has been changed to protect privacy.
Glossary
- Prenuptial Agreement: A prenuptial agreement is a contract drafted by two people before getting married. It lists all of each partner’s assets and debts and specifies what each person will be entitled to should the marriage dissolve. Pre- and post-nuptial agreements are often overlooked by young married couples because they have few or no real assets, or because they feel uncomfortable talking about a prenup. They often view it as unromantic and don't see the point in having a needlessly awkward conversation about finances.
- Alimony: Spousal support is mandated by state with overarching federal laws regarding the enforcement of support orders issued in one state to another state. It's generally seen as rehabilitative income paid to the lesser-earning spouse until the person can transition to a more financially stable and productive life without their partner. Alimony payments cease after a set amount of time or until the receiving spouse remarries.
- Child Support: This differs from alimony in that child support is explicitly for the benefit of the children of the marriage. The amount to be paid is calculated per child and based on the cost of raising the child and factors in the income of both spouses. The legal goal of ordering child support is the “best interests” of the child.
How to Avoid Divorce Horror Stories: Tips From Experts
Protect Your Startup
“One area that is particularly ripe for problems are startup companies. They may not be worth a lot at the time of marriage, but they can grow into a significant asset and the other spouse can have a claim to the value as of the date of divorce (or separation in some states).
“So, in addition to protecting assets that are valuable while married, it may make sense to protect assets that are expected to grow significantly during the marriage. The best way to do this is a prenuptial agreement that makes clear that the other spouse is not entitled to half the value, but to a lesser amount.”
– Thomas Simeone, Simone & Miller, LLP
Get a Prenuptial Agreement
“No legal document seems to trigger as much acrimonious discussion as the prenuptial agreement. The request of a partner to become a signatory to a contractual document, that spells out the terms and obligations of the parties should the marriage dissolve, is often seen as unromantic. Nevertheless, a prenuptial agreement is a great tool for clarifying distribution of assets and expresses the mechanics for how property is to be distributed should a marriage end in divorce.”
– David Reischer, Esq., Attorney, and CEO of Legal Advice
“I think the best thing for couples to do before they get married is to get a prenuptial agreement. They might not have anything to protect, but the process that you go through to get a prenup gets the parties talking about financial issues and goals, and opens up the door to those uncomfortable topics.
“I have known so many young couples who know nothing about the other person’s finances they’re about to marry, and I also know lots of divorcing couples that are equally as oblivious. Considering that our divorce laws mainly care about two things — money and children — it’s extremely important to consider finances when marrying.”
– Gabriel Cheong, Esq., Infinity Law Group
Understand Your Finances
“It’s important for married couples to understand the household finances. How much are they spending each month? What are they saving? Are they working together on the same mission/vision/values? How are they communicating? Are they being honest and treating each other with respect long after the honeymoon phase is over? As problems arise, how are they addressing them? All these things can make or break a marriage.”
– Regina A. DeMeo, Esq., Law Office of Regina A. DeMeo
