Do you have any unpaid or late-paid child support or alimony? Did you know that in most states late or unpaid support orders (such as child support, alimony or “maintenance”) accumulate interest on the unpaid amount? Or even amounts just paid late?
When a judge issues an order for one party to pay the other party child support (for example), it creates a legally binding obligation (“judgment”) against the parent who is to pay. If that parent does not pay or is late paying then the other parent has the right to collect interest on the late or unpaid obligation. The interest rate varies from state to state. While few states have no interest rate, others change the rate as often as monthly. It is important to note that the interest on these unpaid or late debts is seldom calculated automatically by the state. Usually the party who is owed the payment must calculate the interest and file a request for enforcement of the judgment (and interest) against the obligated party.
The amount that is unpaid can be thought of as a loan; one party owes the other an amount of money. If the amount is not paid, the receiving party still needs money (to raise the children), so they have to come up with the support amount from a different source, just as if they had to borrow the money from a bank in a loan.
But is the amount of interest significant?
Take a simple example; say that one Kansas parent owes the other $100 per month in child support starting July 1, 2012 and has never paid it in 5 years. At the end of the 5-year period the total principal owed is $6,000 and the interest owed is an additional $715.80. Can you imagine if the amount per month was more? or the time-frame longer?
Now you can see why we created the unique tool we call ArrearsMaster® You can enter the orders for the support obligation (just the beginning date and amount); and enter the payments made (date and amount). Then ArrearsMaster® does the rest; sorting the obligations and the payments by date and calculating the interest based on the interest rate in the state where the court order was issued (all 50 states are automatically covered). A complete line-by-line calculation report gives you (and the judge) confidence that the numbers are spot-on when you go to court. It also creates an “exhibit” that can be offered in court to prove the amount of principal and interest owed.
If you live in Kansas, ArrearsMaster® can also import payment records from the KPC (Kansas Payment Center) to make the process even easier and faster. In other states (Texas, for example) any payment records available on the Internet can similarly be imported into ArrearsMaster® to avoid a lot of typing.
Many lawyers will take unpaid support collection cases on a “contingent fee” basis − payment for their services is made only out of what they collect. If they don’t collect then there is no fee assessed.
Bottom-line − if you are owed any unpaid child support or alimony we urge you to check out ArrearsMaster®, it is a small investment to see if your situation is worth looking at further. Even if the support was paid, but was chronically late, you may be entitled to substantial interest.
As always we recommend speaking with a lawyer about any of this if you need assistance.