As a family law attorney, having prospective clients contact me regarding back-owed support is common. Trust me when I say that child support impacts everyone, regardless of economic class. You may recall that entertainer Future has his hands full with two child support matters and Siohvaughn Funches-Wade, former spouse of super-athlete Dwayne Wade, recently protested outside my courthouse of choice, the Daley Center, for money she alleges is owed to her by Mr. Wade.
But often times it's not the amount owed, otherwise known as the principal, but the mandated compound interest, that creates untenable issues. Case and point, Illinois automatically applies 9 percent annual interest to any missed support payment. You will not find a savings bond or other traditional investment that will pay you 9 percent year over year; however, most states still mandate ridiculously high interest rates for unpaid support arrears.
I myself have handled cases in excess of $100,000 of arrears, of which three quarters of it was due entirely to compound interest. The stereotypical belief is that the clients are deadbeats or losers. Sometimes that's true, but often times they had been laid off, had their hours reduced, or suffered hospitalization that kept them out of the loop for months. All it takes is couple missed payments to create extraordinary hardship, both for the parent who is owed support and the parent who is mandated to pay said support.
And there's no relief for people who fall behind in most cases. Much like student loans, child support arrears are non-dischargeable in federal bankruptcy court. In many respects it's like leprosy, once you have it, you're stuck with it.
Now bear in mind I'm not arguing against people paying their child support. The issue is whether we should attach substantially high interest rates to missed payments. I am making the argument that we should not.
From my experience, if someone owes tens of thousands of dollars in back-owed support, they often must make monthly payments of several hundred dollars just to keep the total amount owed from increasing any further. For example, in Illinois, if someone owed $30,000 in back owed support, they must pay a minimum of $2,700 a year just to keep pace with the interest.
For most people struggling to get by with low paying jobs, it's nearly impossible. And the end result is very predictable; the debtors vanish. What's the point of making a monthly payment if the amount owed is so much, that you can't keep pace with interest?
Most jurisdictions, including the one I work in, still allow the local prosecutor to go after people for unpaid support, even after the kids have grown up and have kids of their own. Heck I've had cases where the kids were in their 40's and mom is still taking dad to court.
That's because most states do not have a statute of limitations in bringing child support enforcement actions. So it allows people who missed a few payments decades ago to be hauled in and forced to pay several times what they initially owed, once compound interest is attached.
And how is this child support generally enforced once the debtor ceases to pay? By tossing them in jail.
But as Illinois has found out, the irony of incarceration is that it increases the problem instead of solving it. You see, Illinois has locked up over 5,000 residents for failing to pay support. And just now does it appear that the state legislator has realized that it's somewhat problematic to require a person to pay support when they're behind bars with nothing but a shiv in their wallet.
It's understandable to have zero sympathy for people who refuse to support their children. And trust me, there are parents out there who simply don't care. It's tragic for the kids, and more so for the single parents that are left with no recourse and limited government assistance. Just in my state, it's believed that the statewide arrears have surpassed 3 billion dollars.
However, the solution for Illinois, and other states with similar provisions, should involve mutual sacrifice on both sides. The fastest way is to allow some degree of relief through the Federal Bankruptcy Courts. I do not believe that the principal of any back-owed support should ever be discharged; what's owed is owed. However, I do believe it will be better if we grant the trustees under Chapter 7, or the Federal Judge's under Chapter 13, the power to discharge or reduce the interest that's accumulated.
This will encourage many people who owe large arrears to step out of the shadows and begin to pay off their principal, knowing that their small payment is making the debt pile decrease, however minimal it is. It will also allow single parents some relief from what is otherwise a very difficult process.
We must acknowledge the limits of what society and government can accomplish. Instead, looking solely toward increasing punitive measures as a solution for society's ills, we should also consider practical solutions.
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