"You can’t get blood from a stone”, is the old adage which often gives people comfort when they owe money to a creditor whom they cannot afford to repay.
Well, as all of my clients can confirm, I speak the truth even when you don’t want to hear it, so here goes: the court has a nifty power called “imputation”. When the court imputes income to you or your spouse it acts as though you earn money you don’t actually earn when it sets your support obligation to your spouse of your children.
What in the WORLD, you say? How can a court do that when I don’t earn the money to pay the support?
I know it is hard to fathom the act of basing a support obligation upon income you don’t have, but here is how it works. You see, this power all starts with the fact that the Court need not take your word for what your income is during any given year. This is especially so if your income is not W-2 based, or if you have overtime income.
Another instance where the court can impute income to a payor or payee is when the court believes that you are underemployed and/or voluntarily unemployed.
So, if you earned $79,000 in 2014 and you left your job voluntarily in 2015 ( either because you wilfully left the job or you did something to cause yourself to be fired, etc.), causing a $49,000 reduction in income, the Court can base your income upon the $79,000 income you earned in the year 2014.
For parties who are self-employed or independent contractors (paid on a 1099 basis or in cash), the court can completely disregard the number set forth within your income tax returns. In so doing, the court can determine what the average salary would be for a person in the litigant’s job or profession and with that person’s experience and use that figure obtained from the State Department of Labor and impute that sum to you.
There are many other ways to have an income imputed to you in your New York and New Jersey child support or spousal support (alimony) proceeding. I’ll be sure to address those additional ways in another blog entry.
If you or someone you know needs help understanding the concept of imputation or how it may apply to them, call my offices for a personal confidential consultation.