What are the Automatic Orders in a New York Divorce?
When a divorce is filed in New York, the court clerk will issue a summons that must be served on the opposing party along with the divorce complaint and automatic orders mandated by state law. Whenever the opposing party is served with the divorce paperwork, he or she will be required to respond within the time specified in the summons, and both parties will be bound by the automatic orders.
What are automatic orders?
Automatic orders are intended to preserve the status quo after a divorce is filed until the parties’ property and debt can be divided by a court. The automatic orders contain provisions prohibiting the parties from cancelling any contracts or policies jointly held by either party, from creating unnecessary debt with the exception of customary spending or spending on household expenses and from destroying or selling any marital property. The automatic orders remain in effect unless they are modified or terminated by a court order and until the divorce is finalized. They can also be modified by consent of the parties.
Once served with the automatic orders, both parties are prohibited from selling or transferring any of the marital property in their possession with the exception of payment of attorney fees and spending they would do customarily such as for payment of household expenses or in the ordinary course of business.
Parties must also not cancel or alter their retirement accounts without consent from the other party or a court order allowing them to do so. Retirement accounts may be divided in a divorce after a party seeking division has obtained a qualified domestic relations order. The automatic orders are intended to prevent either spouse from altering the account or cashing out a retirement plan with the intent of preventing the other spouse from receiving his or her share. If one or both spouses are already receiving payments from a retirement account, he or she can continue receiving these payments.
Parties must also not create unnecessary debt. In a bitter divorce situation, some spouses may feel tempted to run up bills on jointly held credit card accounts. Automatic orders are intended to prevent this situation from occurring and to keep the debt level approximately the same as it was when the divorce was filed until the marital debt can be divided by a settlement agreement or judicial ruling. Spouses may continue to use credit as they did during the marriage for their regular bills.
Automatic orders also require that the parties not cancel any important plans or policies necessary for health or transportation, such as health insurance or car insurance. The beneficiaries and coverage amounts must be kept the same. If the parties did not have car insurance or life insurance prior to the divorce being filed, they will not be required to obtain it by the automatic orders.
What is the penalty for violating automatic orders?
If a party violates an automatic order, he or she may be held in contempt of court. While the automatic orders are signed by an attorney rather than a judge, New York case law has still held that a party can be held liable for civil contempt for a violation. For example, if the parties have acquired vehicles during the marriage and one spouse sells one of the vehicles without permission of the court or the other spouse, the other spouse can file a motion for the spouse who sold the vehicle to be held in contempt of court. The party who moves for contempt of court must prove that the other party was served with notice and that he or she willfully disobeyed the order. Punishments for civil contempt may include a fine or imprisonment until an act has been performed for the party to purge himself or herself of contempt. Any fine imposed by a court for civil contempt must be designed to remediate the sitation rather than punish the party who is being held in contempt.
Termination or modification of automatic orders
In some cases, it will be necessary for a party to request a modification or termination of one or more terms of the automatic orders. For example, if one party needs to sell a vehicle that is no longer operable to purchase a new one in order to have transportation to work, the spouse may petition the court to sell the vehicle and apply for a new vehicle loan. The judge presiding over the divorce case may sign an an order modifying the terms of the automatic order and granting the spouse permission to sell an old car and buy a new one while leaving the rest of the terms of the automatic order in effect until the divorce is finalized.
When a divorce is finalized, spouses are no longer bound by the automatic orders and will instead be bound by whatever division of property or debt is ordered in the divorce decree. One spouse may be ordered to continue to maintain health insurance coverage for the parties’ children after the divorce is finalized. A divorce decree will contain provisions for how the marital property and debt is to be divided, including any retirement accounts. Once the divorce decree has been signed by a judge and filed with a court, both parties are free to incur debt in their own names and sell any property that has been awarded to them in the decree.