Is Child Support Debt Consolidation Possible?

child support debt consolidationFalling behind on child support payments is one of the quickest ways fathers can cripple their finances, especially in states that apply interest charges.

Child support debt can quickly snowball and lead to wage garnishment and in some cases even prison. Inherently, the child support system is especially harsh on low-income parents, so it is easy to fall behind.

When your bills start to add up and your child support debt grows, you might wonder if child support debt consolidation is possible.

If you find yourself falling into child support debt, it is critical that you act quickly to remedy to situation. A lot of divorced fathers are unsure what action to take. If that is the situation you find yourself in, you should get in touch with your divorce attorney so they can assess your options and help you decide on the best course of action.

Cordell & Cordell understands the concerns men face during divorce.

What are child support arrears?

Child support arrears is a term referring to past due child support owed to a custodial parent. Federal law allows states to apply interest charges if you owe child support arrears. Currently, 35 states apply interest charges. The interest rate varies by state, but can go as high as 12 percent.

Failing to make your court-assigned child support payments can lead to a range of consequences. Some common penalties for nonpayment include:

  • Warrant issued for arrest
  • Fines
  • Jail time
  • Garnishment of wages
  • Denial of tax refunds
  • Suspension of driver’s license
  • Exclusion from certain government benefits
  • Revocation of passport

Child support debt consolidation

If you find yourself stuck paying back child support, it might be worth considering consolidating your child support debt. If you are in a state like Colorado or Vermont, which charge 12 percent interest on child support arrears, your debt can quickly snowball, so it is a wise financial choice to utilize a low-interest-rate loan.

This is a fairly straightforward process. You take out a loan at an interest rate that is determined by your credit score and you adjust the term loan to get monthly payments you can afford. A longer-term loan will have lower monthly payments, but higher interest charges, while a shorter-term loan has more expensive payments but decreases the overall cost since interest is not as high.

After you are approved for a loan, you use those funds to pay off your child support arrears and avoid the penalties listed above. Then you pay off the loan and stay up-to-date on your child support payments to avoid new interest charges.

Personal consolidation loan

The best way to consolidate child support debt is with an unsecured personal debt consolidation loan. The reason an unsecured loan is such a good option is because it does not trade one risk for another.

Since it is unsecured, there is no collateral. If you fall behind on your loan payments, the debt goes to a collector who can take you to civil court, where you could be ordered to pay. However, the worst that can happen is wage or tax refund garnishment, so you are not facing potential jail time as you did while owing child support arrears.

Of course, as long as you keep up with the payments, it does not matter whether your loan is secured or unsecured. But if you have fallen behind on child support, money is likely tight, so that risk probably exists.

Qualifying for a loan to pay off child support

Qualifying for a personal loan to pay off child support all depends on your credit score. As long as you have decent credit, you should not have trouble getting approval. However, your credit score determines the amount you can receive and the interest rate.

Even if you qualify, that does not necessarily mean this is the best way to pay off your child support debt. First, you need to do some calculating:

  1. Figure the total amount of back child support you owe.
  2. Find out what the interest rate applied to child support arrears in your state. This will tell you how much money you need to apply for with the loan.
  3. After you apply, the lender will tell you the rate you qualify for during the underwriting process.

If you are unable to qualify for a loan large enough to cover your owed child support, this might not be the best option. If you can’t get a rate lower than the interest rate applied to your arrears, then there is even less benefit in consolidating. However, consolidation could be used to avoid jail time, and that might be enough incentive depending on your situation.

While it is important to act quickly when it comes to paying child support arrears, it is also critical that you know what you are getting yourself into before you take out a loan. This is a topic you should discuss with your divorce lawyer to determine whether child support debt consolidation is the most effective way for you to pay off your child support debt.

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Philadelphia Inquirer Critiques Child Support System’s Flaws

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The Philadelphia Inquirer recently published a story detailing the ruthless and counterproductive way in which the Montgomery County sheriff’s department utilizes midnight raids and debtor’s prisons to target fathers with outstanding child support debt.

The article details how in Montgomery and other Pennsylvania and New Jersey counties, deputies conduct monthly overnight sweeps to capture parents who failed to pay child support, appear for court hearings, or both. Their names are then published in local newspapers and their arrests often aired on local newscasts. Although some are released the next day, others are held in jail for weeks or months at a time.

The purpose of the raids, which often are publicized on Father’s Day, Valentine’s Day, or back-to-school time, is to coerce payments. Nationwide, overdue child support debt has swelled by 1,000 percent since 1986 to a collective $114 billion, according to the U.S. Office of Child Support Enforcement. Officials insist that collecting payments is imperative so supporting the healthy upbringing of children.

Criminalizing Child Support

With that motive in mind, there has been a trend toward the criminalization of parents who fail to make their payments. A recent analysis published by the sociology journal Socius, found 14 percent of parents who owe child support end up in jail by the time their kids turn 9.

Everyone agrees that providing financial support for the upbringing of healthy children is critically important, but data suggests enforcement methods, such as these late-night raids, are entirely ineffective at reducing the amount of child support debt owed.

According to the article, five large sweeps of 1,567 people across New Jersey who owed $35 million in 2016 and 2017 brought in just $218 per person – just 1 percent of what is owed.

These methods fail because the reason many of these parents fail to make their child support payments is because they simply cannot afford them. The article cites a 2007 Urban Institute study of child support debt in Pennsylvania and eight other states that found 70 percent of all arrears were owed by people who reported an income of $10,000 or less annually.

Furthermore, a study published in the Journal of Marriage and Family found some of the most economically disadvantaged fathers still did what they could to provide in-kind support, such as baby products, clothing, and food.

System Of Debtors’ Prisons

The problem with targeting parents for child support payments they cannot afford, is that it creates a system of debtors’ prisons. Getting arrested can cause some men to lose their jobs, and since the process for modifying child support is complicated, that can lead to more debt. The situation can quickly snowball, and suddenly there is seemingly no way out. Research shows that fathers see their kids less often if they owe child support, so rather than keeping the best interests of children in mind, the system is splitting them apart.

The assumption that men are primarily the ones skimping on child support is indicative of the pervasive gender stereotypes that are so ingrained in family law matter. While much ground has been made the past several decades in terms of gender equality, fathers’ rights have become an often overlooked issue.

“This is a civil rights issue,” said Cordell & Cordell Co-Founder and Principal Partner Joe Cordell in the recently-released book by Andrew L. Yarrow, “Man Out: Men on the Sidelines of American Life.” “What civil right is more important than the role that a parent plays in a child’s life? But this civil right is the dark corner of the room. It’s an orphan. Most people are not particularly disturbed by it. There are no powerful voices.”

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3 Misconceptions About The Child Support System

child supportCordell & Cordell Co-Founder Joe Cordell has talked extensively about the many flaws of the modern child support system. In theory, the system should ensure that all necessary expenses needed to raise a child are covered, but in reality it often drives a wedge between families and creates excessive financial hardship for many well-intentioned fathers.

If you are a father going through divorce who is going to receive a child support order, it is best to educate yourself about how the system works. By learning about the common pitfalls that trip up many dads, you hopefully will maintain financial stability and avoid accumulating child support arrears for unpaid payments.

Here are three common misconceptions about the child support system.

Myth 1 Child support payments can only be spent on the child

This is one of the biggest gray areas when it comes to child support. Child support is supposed to provide for a child’s overall care and wellbeing, but what contributes to their “care and wellbeing” often is a point of contention.

Generally, extracurricular activities, uninsured medical expenses, and educational costs are not included in the basic child support amount unless specifically noted in the settlement agreement. Typically, child support is meant to cover food, clothing and shelter.

However, courts usually trust that parents receiving child support will use that money on items contributing to their children’s well-being and rarely get involved in how the support money is spent. Unless there is evidence that the child’s needs are being neglected, most parents paying child support have little control over how the payments are spent.

If you constantly find yourself spending money on basic items, such as clothes or toiletries, when your children stay with you then this could be a red flag that your ex is misusing your support on unnecessary items. This might be grounds for filing a motion for contempt, and it is a good idea to get in touch with your divorce attorney as soon as possible to review your legal options.

Fortunately, there are family law attorneys who focus on issues that impact men and fathers. The divorce lawyers of Cordell & Cordell have been fighting for fathers’ rights since the firm was founded in 1990. Cordell & Cordell divorce attorneys understand the concerns fathers have about paying child support and can explain what legal remedies are available if their child support payments are being misused.

Cordell & Cordell understands the concerns men face during divorce.

Myth 2 Modifying child support is easy

There is a good chance that at some point it will be necessary to modify your child support order. This could be because your ex-spouse cohabits with another individual, or maybe your employment status changes and you can no longer afford the payments.

Regardless of the reason, modifying a child support order is no easy process. It typically involves going back to court and providing detailed information on past child support payments, and filling out dozens of documents.

Some fathers make the mistake of assuming that child support modifications happen automatically. Just because the factors that went into calculating your child support order change does not mean your payments change automatically.

A good example of this is what happens when a child reaches the age of emancipation. Common sense would dictate that once a child reaches the age of emancipation – age 18 in most states – the child support order terminates. However, depending on your state’s child support laws, you might need to file a supplemental petition to modify or terminate the child support obligation prior to the child turning 18 or graduating from high school.

The same is true if your or the other parent’s income changes. If there is a significant change in either you or your ex-spouse’s financial circumstances, it is important to be proactive.

The other thing to keep in mind is that child support modifications typically are not retroactive. Changes to child support orders usually only go back to the date the request for the change was filed. So if you are laid off on January 1 but do not file a motion to modify your child support order until February 1, then the court will most likely only consider changing the child support order back to the date you filed the motion.

One of the most important things fathers can do throughout the entire time they are paying child support is to keep accurate records of child support payments, medical reimbursements, daycare expenses, etc. Failing to do so can come back to haunt you if your ex ever denies receiving the child support payments you have made.

A good way to ensure you have accurate records is by taking advantage of state agency income withholding. This is probably the easiest and most reliable way to keep consistent records of your child support payments. You also can try setting up an automatic payment through your bank that provides an automatic memo field showing the payment was for child support.

It also is extremely important to get signed receipts from the other parent for your child support payments and other payments like daycare or medical reimbursements. Make sure to keep those records organized and accessible so you can easily find them when you need them.

The more accurate and thorough your recordkeeping, the more likely they will be able to be admitted as evidence. The rules of evidence can be complicated so it is important to consult with an attorney to help you prepare your case.

If you are a father going through divorce who is going to receive a child support order, it is best to educate yourself about how the system works.
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Myth 3 The child support system keeps the best interests of families in mind

Theoretically, the child support system is designed to financially support families who have gone through divorce. Ideally, such a system would be set up to put a child’s best interests above everything else. Unfortunately, that is just not the case.

The modern child support system was established by a bipartisan policy reform 40 years ago based on outdated stereotypes in which the father was the household’s sole breadwinner. Although more women are in the workforce than ever before, the child support system has been slow to catch up. Many dads still feel a stigma about asking for child support even when their spouse makes significantly more than them.

Perhaps the most problematic aspect of the system is the manner in which it is unduly harsh on low-income fathers. With 29 percent of families in the child support system living below the federal poverty line, many fathers just do not have the financial means to make their payments. If a dad goes through a rough patch and misses a couple payments, things can get real messy.

If too many child support arrears accumulate, the father can be sent to prison. While in prison, his child support payments do not necessarily stop automatically, and some states even consider incarceration voluntary unemployment so the debt continues to snowball.

This child support debt has the two-pronged effect of ruining the dad’s finances and driving him out of his child’s life. Research shows that men with outstanding child support debt are less involved in their children’s lives.

The system’s punitive nature is driven by the age-old “deadbeat dad” myth that really dates back to a 1986 CBS report titled “The Vanishing Family: Crisis in Black America.” The report featured a New Jersey father of six who bragged about skipping out on child support payments.

Not long after the report aired, Congress passed stricter child support enforcement practices, and that trend continued in the ’90s with President Bill Clinton’s Welfare Reform Act, which gave the government even more power to collect child support payments.

Although there certainly are irresponsible fathers out there, research indicates there are far more who want to do whatever they can to support their children. According to a U.S. General Accounting Office Report, 66 percent of all child support not paid by fathers is due to an inability to afford the payments.

Many of those dads who miss payments still try to find ways to do what they can to support their children. A study published in the Journal of Marriage and Family found that many of the most economically disadvantaged fathers still tried to provide in-kind support such as baby products, clothing, food, and other non-monetary contributions.

“I know most of these men are not bad people; they love their kids, they want what is best for their kids, they want to be there for their kids,” Mr. Cordell said.

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