Help: Greedy Ex

[Richie]

Hope some people can shed some light on this issue.  I lost my job before I was divorced.  So my divorce papers say that once I have a job, I'm to pay 20% of my net income to my ex for support of our child.   I collected 6 months of unemployment of which she got her 20% of.  When that ran out, I was still having difficulty finding any decent work.  I used to make $26.00 an hour.  Everything I was looking at was paying $10 -$12/hr.  So after looking at my situation and doing some research, I decided to go into business for myself.  I called Child Support Services in my state and they said that I'd be required to pay 20% after I set aside money to pay quartly taxes everytime I take an Owner's Draw from my company.  So everything looked like it was going to work out.  Fast forward a few months, I have ended up playing a waiting game on several of the jobs I submitted bids on, so I was receiving no money.  I decided to take a $10/hr job on weekends and evenings to have some steady income coming in and so that I can pay my ex some steady CS.  So this morning I get an e-mail asking, what about the money you're getting from your business?  I told her that I intended to not take any draws at this time, so that I could invest any money I receive from jobs I do, back into the business.  This would allow me to grow my business to a point where I could quit the $10/hr job and make $30 - $40/hr.  Her reply was my business expenses are not her problem, and apparently her lawyer is telling her that she's entitled to 20% of what I bring in.  I'm a handyman.  I had a job that I bid at $800, after materials I had $500 left over.  My business costs me $150 a month in normal expenses, (credit card processing fees, garbage, cell phone, etc)  Then I have advertising expenses, as I'd like to get in the yellow pages and local directory.  I have internet search engine fees, and all of this will pretty much each up that extra $500 over the next 2-3 months.  The job that I'm starting on now, is for a corperation that will not pay until the job is 100% complete.  It will last about a month, so I won't see anything from that until May.  

So is her lawyer right?  I'm provinding her with support from the job I took, plus I have to pay 1/2 of EVERYTHING she decides to invoice me on. (Medical bills, school supplies, music lessons, recreational activities)  Do I still owe her more?  For the record, the few owners draws I did take, I immediately sent her 20% of the draw after I took out taxes.

Thanks, and sorry for the novel.

[leon clugston]

you owe her whatever was stipulated in the decree, not a dime more, if you cannot figure or determine what this incorporates, then you need to enter in to the court for a explanation, or for a proper determination of the meanings set forth in the decree. You do this though under what we call a limited entrey and special appearence, that way you only go into court for the facts you whant to determine, therfor limiting them from construing it into something else, or modifying it to there wants and desires. The lawyer(hers) might be interpreting the decree for something else then what it was or is, if you cant understand then always get a CLARIFICATION so you dont end up in these messes.
Never agree or sign anything unless you absolutely understand its meaning, this is what screws so many people, that and lawyers only telling you half the facts.

[Richie]

My divorce decree says I owe her 20% of my net income.  I called my state's Child Support Services, and they said I'm doing everything the way I need to be.  I have receipts for money that I have paid her, I send her money every month, even if it's not an amount that she wants, it's 20% of what I earned.  They also said she does not get 20% of what my business brings in, she gets 20% of what I take out, after I set aside 35% for Federal, Sate, Local and Self-Employment taxes.  

[nala_mia8]

Welcome to the wonderful world of the self-employed. There is nothing worse than dealing with CS and being self-employed.

DH is self-employed. He makes a small salary b/c like you, he reinvests a majority of his sales back into the business in the form of paying off his inital start up debt.

Here's the problem with being self-employed and your business expenses... Just b/c the IRS says it's a business expense, or a deduction, or depreciation, etc, doesn't mean it's valid for determining child support. Your ex can take you back to court for a re-calculation of child support and you will be forced to submit very detailed business reports, preferrably done by a CPA, that document any type of expense, deduction, or depreciation you have. Then, the court will decide if it's valid or not valid for the purpose of calculating CS.

What state are you in? It sounds just like TX, where we are. Even though TX normally doesn't care about expenses, in this case, DH was forced to submit his entire business financials and he has to account for every dime that he's spent or deposited. It's been a true nightmare.

The law isn't quite as black and white as the 20% rule. There is a part in the family code (for TX) that CLEARLY says that the court can deviate from the normal calculation if they see fit. Basically, they can make you pay whatever they want, especially if you used to make a certain amount of money and now aren't. They can make you pay CS on your previous earning potential which will basically ruin you financially.

My advice, don't be self-employed. You will cause yourself a ton of headache. What's worse is that many courts look at the self-employed as child support evaders b/c unfortunately, there have been too many cases of people hiding money in their business, paying themselves under the table, etc, just to avoid child support. They've ruined it for the honest people.