Recent news

How has the mortgage and finance industry bust affected child support payments.

New Lubbock Numbers

I'll share Lubbock, Texas child support numbers soon.

Unemployment Impacts Child Support

Obligors may be unable to pay child support if they've been laid off due to poor economic conditions. There is no financial product to help them. This blog is an attempt to raise awareness of the need for such a product.

Data Set Ordered

The Texas Attorney General collects an enormous amount of data on child support in Texas. I've just ordered a data set for Lubbock, Texas to determine the magnitude of the problem of non-payment of child support there. I'll share my results with the readers to get their input on the best way to provide a reliable source of child support, even when the obligor cannot work.

Is this just a different way to collect child support?

There is over $100 billion in unpaid child support waiting to be collected. Much of that will never be paid no matter how much effort is put into the problem. State government and commercial child support collection agencies work hard to collect delinquent child support.

State governments collect child support for those who receive welfare benefits. That is because regular child support prevents child poverty and reduces government costs for poverty programs.

Commercial child support collection agencies collect child support to make money. They typically charge a 33 percent fee of child support collected for their services. That means for every $300 in child support collected, the agency earn $100, leaving the balance for the child.

Child support insurance is a way to prevent the need for collection efforts. Unemployment is the biggest source of unpaid child support. With this product, those who buy the insurance will never get behind in their child support, even though they’ve lost their jobs. Total cost of the program is the premium paid. Unlike collection services that charge a fee for child support collected, this program pays all due child support to the parent.

Does the obligor have to repay child support paid by the insurance?

The beauty of this program is that the obligor is not required to repay any child support paid on his behalf. The purpose of insurance is to pay a claim for someone when they cannot pay. The claim paid is not a loan, it is a benefit of the policy. There would be no requirement to repay the child support paid under the child support insurance product.

How does the claims process work?

The insurance program would be governed by the contract. One possible contract would provide payment of child support whenever child support stopped for any reason for any length of time. This is obviously an impossible contract to write. Why? The obligor would simply stop paying child support and would expect the insurance company to pay forever. No amount of money would be enough to pay the premium on such a policy.

Other conditions could be placed on payment of claims. One condition could be the involuntary unemployment of the obligor. He’s lost his job and qualifies for unemployment. In that case the insurance policy would pay his child support through the state disbursement unit which in turn would pay the money to the obligee. The insurance claim is paid through the state disbursement unit in order to give the obligor credit for any payments made.

Claims would be made by either the obligee or the obligor (or the child in some situations). The insurance company would approve or deny the claims and begin paying immediately. The policy language would assure both parents that even though there might be a time lag between the child support ending (due to unemployment) and the claim being paid, the total amount of unpaid child support would be paid. In other words, the obligor would never become delinquent in his support, and the child would not miss any child support.