Child support is often awarded in divorce cases and typically, payments are made by the non-custodial parent to the parent that won custody. Falling into arrears on a child support order means you have not paid the appropriate amount of support, and it is a very serious matter. Child support orders are court orders and as such, they are legally binding. If you have been ordered to pay child support, it is essential that you do your best to make payments on time so you can avoid the consequences that come with falling into arrears.
Interest on Child Support Arrears
Child support arrears are calculated by subtracting the amount of money you have paid by the total amount of support you were supposed to pay. If you fall into arrears or do not pay the proper amount of support, you still owe the money. However, the total amount of arrears also collects interest at a rate of nine percent, which is more than the vast majority of types of investments.
A parent that is owed child support payments may not take action right away, allowing that interest to continue to build. Once they do take legal action, the interest owed alone can be so great that any payments you are able to make only cover the interest. That essentially means that you do not make any progress in paying the amount originally owed....