A breakdown in a marriage can also be a breakthrough in finding happiness regardless of how the marriage is ending. While you may feel like life is in disorder, the bills still need to be paid which begs the question: Who pays the bills during a divorce? The answer can be found in a Financial Status Quo Order.
A specific Financial Status Quo Order
A specific Financial Status Quo Order may clearly define who pays the bills during a divorce by providing how money is deposited and identifying which bills are paid during the divorce process. For example: “Husband and wife should deposit their paychecks into the Bank of America Account ending in account _____ and pay the following bills . . .”.
A general Financial Status Quo Order
Alternatively, the Order may provide general instructions such as: “Husband and wife shall maintain the financial status quo and continue contributing towards payment of all marital obligations as they have in the past, during the divorce.”
If the lawyer is representing the primary wage earner, it is not uncommon to avoid the filing of a Financial Status Quo Order as the Order does not provide any protections for the primary wage earner, allowing the primary wage earner the flexibility to pay (or not pay) the bills as he/she decides.
“From a divorce lawyer’s perspective, the decision to obtain a Financial Status Quo Order may depend on who you are representing.”
If the lawyer is representing a financially dependent spouse, a Financial Status Quo Order should typically be entered. The Order provides financial stability during the divorce for the maintenance of the financial status quo. A Financial Status Quo Order typically is filed Ex Parte (without a hearing) and submitted for the court’s signature with the Complaint for divorce.
The Michigan Court of Appeals
On April 25, 2017, the Michigan Court of Appeals decided a case involving a general Financial Status Quo Order. The case, Gyorke v. Gyorke, No. 330375. In the Gyorke case, the wife appealed a Judgment of Divorce and claimed she was entitled to ½ of a joint tax refund worth $38,000.00. The parties’ divorce settlement agreement included a general Financial Status Quo Order to pay bills as they have in the past. When the husband received the income tax refund, he applied the refund towards next year’s tax obligation as he had in the past. The Michigan Court of Appeals affirmed the trial court’s decision that doing so was not in violation of the Financial Status Quo Order and the wife lost. Had the parties entered a specific Financial Status Quo Order, the result would have been different.
A Financial Status Quo Order provides enforceable instructions on paying bills during a divorce. While a general Financial Status Quo Order provides flexibility, there is a risk of interpretation. In the Gyorke case, the wife lost ½ of the tax refund because of the court’s interpretation of paying bills as they have in the past. A specific Financial Status Quo Order is inflexible and can interfere with budgeting decisions when cash flow is an issue.
About Findling Law
I have been exclusively practicing divorce and family law in Michigan for over two decades. The attorneys at Findling Law all share the core value of practicing law to help people navigate change in their lives, without compromising principles. We specialize in high socio-economic, high-profile and high-conflict cases, while also working with clients of all backgrounds. We recognize that the most important aspect of the practice of law is the application of the law to your specific circumstances.
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By: Daniel Findling