The Costs Upon Default provision addresses whether the payor will be responsible for covering the costs incurred by the recipient if they default on spousal support payments. These costs may include legal fees, administrative costs, or enforcement fees incurred by the recipient in pursuing overdue payments.

Options:

1. NA (Default):

   • Definition: Selecting NA means that this provision does not apply because there is no anticipation of default or spousal support obligations have been consistently met without issue.
   • When to Use: This option is selected when both parties believe that the payor will fulfill the support obligations on time and there is no need for a provision to address costs upon default.
   • Example: If there is no history of missed payments or concerns about future defaults, the parties may choose to leave this provision as NA.

2. Yes:

   • Definition: Selecting Yes means that the payor will be responsible for covering any additional costs incurred by the recipient as a result of defaulting on spousal support payments. These costs may include legal fees, court costs, or fees associated with enforcement through government agencies like the Family Responsibility Office (FRO).

   • When to Use: This option should be chosen when there is a history of missed or late payments or if the recipient wants to ensure that they are financially protected in case the payor defaults on their obligations. It is particularly useful in situations where the recipient may need to take legal action to recover overdue payments.

   • Example: If the payor fails to make timely spousal support payments and the recipient incurs legal fees to enforce the support order, the payor would be responsible for reimbursing the recipient for those costs.

   • Benefits: Provides a strong deterrent for the payor to avoid defaulting on payments. It also ensures that the recipient is not financially burdened by the costs of pursuing enforcement if the payor fails to meet their obligations.

3. No:

   • Definition: Selecting No means that the payor will not be responsible for covering any costs incurred by the recipient as a result of defaulting on spousal support payments. The recipient will need to bear the costs of pursuing enforcement on their own.

   • When to Use: This option may be chosen when both parties trust that the payor will meet their support obligations and the recipient is not concerned about covering potential costs associated with enforcement. It may also be used if the recipient is financially capable of handling such costs without reimbursement.

   • Example: If the payor misses a payment and the recipient incurs legal fees to enforce the support order, the recipient would be responsible for covering their own costs, and the payor would not be required to reimburse them.

   • Benefits: Simplifies the arrangement by eliminating the need to calculate or recover additional costs. It may be appropriate when there is a strong level of trust between the parties or when the risk of default is minimal.

When to Choose Each Option:

• When to Choose NA (Default):

  • There are no concerns about default, and both parties trust that the payor will fulfill their spousal support obligations consistently and on time.
  • Spousal support has been consistently paid on time, and there is no history of missed payments.

• When to Choose Yes:

  • There is a history of missed payments or a concern that the payor may default in the future.
  • The recipient wants financial protection in case they need to take legal or administrative action to enforce spousal support payments.
  • The payor agrees to be responsible for any costs associated with default, ensuring that the recipient is not financially burdened by pursuing enforcement.

• When to Choose No:

  • Both parties trust that the payor will meet their spousal support obligations and the recipient is comfortable handling any enforcement costs on their own, should the need arise.
  • There is little to no concern about future defaults, and both parties agree that additional cost recovery provisions are unnecessary.

Why This Matters:

The Costs Upon Default provision provides protection to the recipient in case of missed spousal support payments. Selecting Yes ensures that the payor is held accountable for any costs incurred due to default, while selecting No allows the recipient to take on the responsibility of covering enforcement costs. The default option of NA applies when there are no anticipated concerns regarding defaults, ensuring that the agreement reflects the current payment situation.