When a parent falls behind on child support, a local or state child support agency may initiate court-ordered wage garnishment of the parent's paychecks. The parent should understand how wage garnishment due to overdue support, also known as child support arrears, can affect the parent's credit history. The content of credit reports may affect the parent's efforts to buy property, open bank or credit accounts or even apply for work with a new employer.
Purpose of Garnishment
Wage garnishment, also known as wage deduction or withholding, generally compels an employer to take court-ordered child support from an employee's checks and transfer the funds to a local or state child support agency for payment to the other parent. While federal law requires a version of wage garnishment for all child support cases, states can set their own requirements as well. Not every state requires garnishment for all parents ordered to pay child support --- some states allow parents to opt out of garnishment or only start garnishment after a parent has fallen behind on payments. When garnishment occurs due to overdue support, rather than regularly-scheduled, on-time support, federal and state laws allow the garnished checks to affect a parent's credit history.
The Fair Credit Reporting Act explains many consumer rights under federal law. Section 622 of the act discusses child support obligations. The section requires inclusion of overdue support on an individual's credit report when credit bureaus receive the information from a local or state agency engaged in child support enforcement or from any other local, state or federal government agency. Only overdue child support reported within the preceding seven years may appear on an individual's credit history.
The laws regarding child support and credit history vary according to the state. Each state may set a minimum amount owed by the parent before the state's child support agency reports the arrears to the credit bureaus. Parents should understand the minimum amounts to require reporting in their own states. For example, Idaho sets a minimum of $500 or three months of missed payments before the state reports the arrears. In contrast, Arkansas simply specifies a minimum of $1,000 owed. A state may continue to report arrears owed until the parent pays off the debt in full.
Procedures to Appeal Reporting
Each state sets its own procedures to fight the reporting of child support arrears to credit bureaus. A state may require written notice to the parent before the state conveys information regarding child support debts to credit agencies. The parent should respond to the notice within the specified number of days. The parent's written appeal should explain that the parent does not owe enough child support to require reporting according to state law or that the agency has identified the wrong person, or provide another reason to appeal the reporting. After the parent appeals, the child support agency will review the case and possibly schedule a hearing. A parent worried about the effect of child support on credit history should consult with a family law attorney who has expertise in a particular state's laws.
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