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Michigan Family Law Blog

Friday, October 14, 2016

Purposefully Reducing Income to Avoid Alimony in Michigan

I am a divorce lawyer in the Rochester area of Oakland County, Michigan.  Some people I speak with seem to think that alimony is no longer awarded in Michigan.  Nothing could be further from the truth, alimony or spousal support as it is called in our state, is alive and well and can be awarded to men or women after a divorce.  In addition, some people insist that if he or she was faced with paying alimony that he or she would quit working.

This is probably a bad idea.  The court has the ability to impute income to a party if it believes that the party is intentionally not earning income or earning a reduced income in order to reduce alimony liability.  That means that regardless of one's actual income, the court may look at the whole situation and decide that a person should be making more money and calculate the support payments based upon that higher hypothetical income.

The court recently did this in Perna v Perna, COA 326256, August 9, 2016 (Unpublished).  In that case the husband claimed that he was poverty stricken and had filed for bankruptcy so he could not afford to pay anything to his wife.  The court found that he had actual wages of $68,000 annually, plus rental income as well as "likely undisclosed income from Nick & Nino, LLC, Mulvaney's Bunker and Detroit Dogs."  It concluded that if anything, the husband was purposefully reducing his income  The court used the assumed undisclosed income when it decided to award the wife $2,000 in monthly spousal support.

The court's finding that the husband did not disclose his income likely affected the way the court handled the rest of the trial.  One may assume that the court did not find the rest of his testimony very credible either, so that even when he was telling the truth about something, the court did not believe him.  Further, this judge will be assigned to his case for future proceedings and enforcement actions and the court will remember his previous behavior.


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