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Child Support and Section 7 expenses

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  • Child Support and Section 7 expenses

    Hi everyone,

    I am asking for a close friend who is going through mediation in her separation / divorce.

    Some details about her ex:
    - been separated 2 years now living in different houses
    - he is self employed as a business consultant
    - in the 5 years prior to separation he deposited an average of 155k into their joint bank account. (She earned about 85k working ft at her job).
    - As part of financial disclosure he provided his personal and corporate taxes for the past 3 years. As for business revenue he has declared 55k, 60k and 50k. He declares everything he earned is spent as expenses. His "advertising" expenses are nearly 80% of his revenue and the rest is a variety of other smaller expenses. His personal income he declared as only $5k per year.

    - he was paying $750 a month in CS in the 24 months he only paid her this amount 6 times. Other months he says he didn't earn anything and can't afford to pay any support.
    - he hasn't paid anything in Section 7 expenses since they started living separately. Every request for an expense is completely ignored.

    They do not have lawyers; instead they are dealing with a mediation service who is trying to help them settle their case.


    They sold their marital home upon separating and all the funds (after debt paid) is being held in trust. He says that she will get paid for all the past due CS and Section 7 once this trust is split between them.

    For the purpose of CS and Section 7 he wants to pay only based on what he declares as his personal income (so based on 5k per year). He doesn't want to pay based on Revenue (minus appropriate expenses).

    Any advise on what she should do? Since the kids live w her 100% of the time she can't afford a lawyer. All their expenses; rent, car, braces, tutoring, activities, commuting to school, etc are all on her right now so she doesn't have much left over to be able to hire her own lawyer.


    She's tried to negotiate an average of 3 years; 5 years etc., he just refuses and says no; it will be based on personal income and nothing else.

  • #2
    Do a search on canlii for self employed income and child support. He canít claim a lot of the expenses for child support calculation. If he files a return and filed an attachment showing income (I canít remember the name of the form) then she can use that. Or she can request an income be imputed to him. She may want to speak to an accountant.

    He will have to pay child support and he canít claim no income. She should also look up cases with imputed income too.

    Once she has an idea of his income, she should go back and calculate how much he owed and how much he paid. This includes the medical expenses too.

    Comment


    • #3
      Mediation works for reasonable people who just have different priorities. It is a great tool for an unreasonable person to wear down the other party so they will agree to a terrible deal. How long has mediation been going on for? Two months without significant progress is my line in the sand; at that point it is faster and cheaper to use the Courts. She can self-rep and get pretty far before involving a lawyer. She may as well start the Applicantion now since I have no doubt he will try everything to delay in the Courts as well.

      Comment


      • #4
        I also say file a motion for support and request full disclosure of his personal corporate bank accounts as well as copies of any applications for credit including a mortgage.

        The reason why is because a) his bank accounts will show what he deposits and b) his applications for credit will show what he claims as his income.

        Mediation wonít work because he refuses to admit what his income is. His disclosure will show it and he wonít hand that info over reasonably.

        Comment

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