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Slashing child support interest rates leads to higher payments

| Mar 21, 2014 | Child Support

Many parents with overdue child support bills are making the effort to catch up. The problem: Interest rates can make it difficult. Parents in Minnesota are often negatively affected by the large penalties associated with late child support, which may make them less likely to even attempt to pay.

That is why officials in neighboring Wisconsin have decided to slash interest rates on overdue child support payments. Instead of paying 12 percent for accounts that are in arrears, parents will only be subject to an annual 6 percent interest rate. The changes will officially go into effect on April 1.

Statistics show that a reduced interest rate will actually make it more likely that noncustodial parents will pay some of their child support debt. That means that families who are slated to receive the money will at least get a portion of what is owed. In turn, taxpayer money is saved because fewer single parents rely on government assistance programs to purchase groceries and meet other bills.

One 60-year-old man who owes about $6,000 in child support calls the current process “an ice mountain” that he continues to slide down. That man has difficulty paying his child support because he has health issues and is currently unemployed. The lower interest rates may benefit such parents, who find themselves struggling to make ends meet because of financial situations that are out of their control.

Parents who are worried about their child support requirements may benefit from consulting a Minnesota attorney. These family law professionals may be able to pursue an agreement modification that could benefit the noncustodial parent. Even those parents with overdue child support have legal rights; a Minnesota attorney may help parents learn more about their family law options.

Source: The Journal Times, “A break on child support: Interest rates on late payments to be cut in half starting April 1” Stephanie Jones, Mar. 17, 2014

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