Because divorce is a matter of state law, whether interest on past due child support is allowed and how it is calculated depends on the state.
Most states charge interest on past due child support. The amount of interest you can collect varies by state. Most states have a fixed annual interest rate, often 10% or higher. A few states have a monthly interest rate, a few allow the court to determine an interest rate and there are those states which do not allow for interest at all.
States that charge interest typically begin its accrual on the day the relevant child support payment is due and not paid.
Is Interest Mandatory?
In some states, the interest is mandatory and the court automatically imposes it. In many states, it is up to you to decide if you want interest to be imposed on past due child support. Because the interest owed can become very large over time, this can sometimes be used as an enforcement strategy should you ever decide to negotiate a settlement.
Often you can’t collect interest on past due child support payments you have already accepted. For example if a payment is a week late you can’t accept it and then get interest for the time it was late.
Collecting the Interest Due
You must first confirm that the language in your child support order include interest. Whether or not the state in which you reside allows for interest to be collected, your order must state that the obligor will owe you interest (whatever amount your state allows) once the payments become overdue. If your child support order does not include this information you must go back to order and request that it be modified to include such language. Be sure to include that the interest becomes an automatic child support judgment otherwise you will find yourself running back and forth to court in order to collect your dues. Of course it is easier to get this accomplished at first rather than having to go back and clean up your messy work but better late than never.
Once the interest rate clause appears in your order, you can then enforcement it through all of the means available to you under child support enforcement laws, including but not limited to wage garnishments and wage executions.
Waiving Interest Due
You may be allowed to waive any interest due to you on your child support order. This is a state by state issue and depends on where you live. The only reason I can think of to waive interest on past due support is to make it a part of a larger strategy. Sometimes it’s about winning the war and not the battle.
Want to know where your state stands on the interest issue? Check out my blog this Friday when I post a listing of states that routinely charge interest and states that sometimes do. Be in the know.
Copyright, Simone Spence
Simone Spence is an author and renowned expert on child support collection. With the mantra “Knowledge is power,” she authored Deadbeats, What Responsible Parents Need to Know about Collecting Child Support and through her firm Child Support Solutions, has assisted nearly 10,000 custodial parents in collecting more than $11,000,000 in child support arrears. Simone Spence is an author, speaker, and has been a child support consultant and coach for over 10 years. She can be reached at firstname.lastname@example.org