Managing Child Support Debt

What Can Noncustodial Parents do if the Amount of Their Child Support Order is too High and They Fall Behind with Payments?

Noncustodial parents (NCPs) can do three things if their child support order is too high. They can request a modification of the order if it no longer reflects their income and resources. They can negotiate a repayment plan of debt with Child Support (CS) agencies that more accurately reflects their current economic situation. Last, they can contact the CS agency to see if their State has a debt forgiveness or an interest reduction program, and whether they might be able to participate.

Order Modification

Requesting that a CS agency modify a child support order if the amount owed each month is excessive relative to a NCP’s current income is the first step toward managing debt. Getting the order set right based on state guidelines will help prevent debt from continuing to accumulate. (See AFI Resource Center Fact Sheet “Child Support Modification” for more information.)

Developing a Repayment Plan

When NCPs accumulate child support debt, there are many actions that child support agencies can take to secure payment of the debt. These actions include:

• Suspending driver’s, business, or occupational license
• Reporting child support debt to credit bureaus
• Placing liens or levies on bank accounts
• Seizing Federal income tax refunds
• Placing liens on personal or real property

Working with the child support agency to develop a repayment plan appropriate to an NCP’s financial situation can often put some of these enforcement actions on hold and help remediate others. For example, if parents make stable and prompt payments for a certain amount of time, many CS agencies will provide letters indicating a record of timely payment to help repair credit ratings. Agencies may also restore licenses when essential for employment, or remove a NCP from the list of debtors whose bank accounts can be seized.

Debt (Arrears) Forgiveness

Some state child support agencies have programs that allow the agency to work with noncustodial parents to reduce or forgive child support arrears owed to the State. Child support payments owed to the State consists of arrearages that accumulated during periods the child was receiving public assistance. Some CS state programs also work with custodial parents to determine if any arrears owed to the family could be reduced.

Arrears forgiveness programs may include:

• Suspension of interest on child support debt in exchange for regular payments.
• Reduction or elimination of arrears owed to the State in exchange for a lump sum settlement, or regular payments.
• Reduction of arrears owed to the State if parents can show they fell behind on the payments due to loss of job, incarceration of other circumstance that rendered them unable to meet their child support responsibilities.

How Will Working with CS Agencies Help AFI Project Participants?

Noncustodial parents who are able to reduce their ongoing child support obligation through a modification, if appropriate, and/or reduce child support debt will be better situated to manage their finances.

If an AFI project participant is a NCP who is behind in making child support payments, you can work with them to reduce or eliminate past due amounts. By doing so, AFI grantees can help ensure that NCPs will be able to succeed with their savings goals. Noncustodial parents who do not attempt to pay child support debt will face many barriers to work and saving, such as license suspension or bad credit.

AFI grantees can also help NCP clients increase their willingness to open bank accounts, file taxes, and apply for benefits for which they are eligible.

More Information

Information on child support and CS agencies:

https://ocse.acf.hhs.gov/int/directories/index.cfm?fuseaction=main.extivdlist

This is one in a series of factsheets on asset-building, fatherhood, and child support services produced by the Assets for Independence Resource Center. For more information, visit the resource center website at www.IDAresources.org or contact the center on 1-866-778-6037 or via email at info@IDAresources.org.