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Tuesday, August 27, 2013

Modern Debtors' Prison

Bloomberg reports on a man that essentially has lifetime jail for not being able to afford to pay child support payments and alimony. From the story:

Schochet, who said he worked as a portfolio manager at Citadel Investment Group Inc. and Fortress Investment Group LLC (FIG) and once earned $1 million a year, has been jailed for missing court-ordered payments at least eight times in the past two years as he coped with the end of his 17-year marriage. 
The reason he ran afoul of the law was simple. He was out of work for most of that time, a victim of a weak economy, and he ran through his savings trying to pay his wife alimony and child support that totaled almost $100,000 a year. 
“It’s a circle of hell there’s just no way out of,” Schochet said. “I paid it as long as I could.” 
Schochet and ex-spouses in similar changed circumstances say New Jersey’s law unfairly imposes lifetime alimony on them. If they fail to make payments, like the $78,000 a year Schochet owes his ex-wife in alimony, they can be jailed for contempt of court regardless of whether they have a job or resources.
 One of the problems is that many jurisdictions will not allow you to amend your alimony/support order once you get behind in payments. You have to move to amend the order before you get behind. So here is a guy unable to pay $100,000 per year who can never get the amount he owes changed, notwithstanding the change in his circumstances.

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