Will a Virginia court reduce spousal support payments due to a downturn in the real estate business?

Will a Virginia court reduce spousal support payments due to a downturn in the real estate business?

It depends upon the circumstances and the factual findings regarding the reductions. In Hardy v. Hardy, File No. 02-83, the Circuit Court for the City of Charlottesville determined the husband had sustained losses of income constituting a material change in circumstances justifying a reduction in spousal support payments.

At the time of the final divorce and spousal support order, the Court found that the husband’s before-tax monthly income was substantial, around $33,000 a month, and set the spousal support payments accordingly at $18,000 a month. In his motion to modify spousal support, the husband alleged that his monthly before-tax income in the previous three years had significantly decreased. Although he had pursued the same occupation in the same field, he asserted that because of events outside of his control, namely the collapse of the “high-end” real estate market, he could not continue to make the same support payments in light of his income.

This case resembles the factual situation in Trump v. Trump, Record No. 2475-09-4 (Va. App. 2010), where the Court of Appeals of Virginia found that despite husband’s ability to save money consistently, the husband’s income losses represented a material change in circumstances warranting a reduction in spousal support. Similarly, in Hardy, the totality of the facts and the income losses led to the Circuit Court’s conclusion that it should reduce the husband’s spousal support payments.

Although the Circuit Court in Hardy did not elaborate on the legal precedent for modifying spousal support, that further discussion can be found in Wright v. Wright, CL-4587-01, previously discussed in this blawg. Under Va. Code. Ann. §20-109(A), the Court may increase, decrease, or terminate the amount or duration of support obligations it has set upon motion by either spouse. The decision to modify support rests solely in the discretion of the court upon a finding of a material change of circumstances. Barrs v. Barrs, 45 Va. App. 500, 612 S.E.2d 227(2005).  Using the factors provided in Va. Code. Ann. §20-107.1, the Court will determine whether a modification is warranted based upon the facts presented by the moving party.

In Hardy, the Circuit Court examined the decreased income of the husband as well as noting the decreased financial needs of the wife. Moreover, the Court determined that the wife had the ability to increase her own income by renting out two properties and reduce her personal expenditures. Furthermore, despite the husband’s ability to continue to reduce his business and personal expenses in light of his decreased income, the Circuit Court held that the economic downtown and its effect on the husband’s income substantiated a material change of circumstances and subsequently reduced his spousal support obligations from $18,000 a month to $12,500 a month.

You should consult your Virginia divorce lawyer or Richmond divorce lawyer James H. Wilson, Jr., to discuss whether a change in your financial situation might result in a modification of spousal support.

Leave a Reply