Is it a good idea to pay child support in a lump sum

[mdrlp]

What is the name of your state (only U.S. law)? CO

My husband got behind on his child support due to loss of his job a few years ago and his ex has been understanding. We are now in a somewhat better state financially so we are considering taking out a personal loan to get caught up. Since we only have about 2 years left of child support we thought that instead of making 2 payments each month we'd just get the loan for the full amount, pay the child support in full and be done with it. I am pretty sure her mother would be ok with this as she is fairly easy to get along with. getting the loan for the full amount would make our monthly obligation less although it would put us paying off the loan for a longer term, however it would be a longer term even with the smaller loan. Is this a good idea or not?

 

[Antigone*]

What is the name of your state (only U.S. law)? CO

My husband got behind on his child support due to loss of his job a few years ago and his ex has been understanding. We are now in a somewhat better state financially so we are considering taking out a personal loan to get caught up. Since we only have about 2 years left of child support we thought that instead of making 2 payments each month we'd just get the loan for the full amount, pay the child support in full and be done with it. I am pretty sure her mother would be ok with this as she is fairly easy to get along with. getting the loan for the full amount would make our monthly obligation less although it would put us paying off the loan for a longer term, however it would be a longer term even with the smaller loan. Is this a good idea or not?

What does the court order say? Oh wait. You are not a party to that order.

 

[CSO286]

Is Dad's child support enforced through CSED?

Does Dad pay directly to Mom to to a payment clearinghouse?

 

[CSO286]

What does the court order say? Oh wait. You are not a party to that order.

I'm being nice, since it means that child support might actully be paid in full!!!

Stuff like that makes CSO happy.

 

[Silverplum]

What is the name of your state (only U.S. law)? CO

My husband got behind on his child support due to loss of his job a few years ago and his ex has been understanding. We are now in a somewhat better state financially so we are considering taking out a personal loan to get caught up. Since we only have about 2 years left of child support we thought that instead of making 2 payments each month we'd just get the loan for the full amount, pay the child support in full and be done with it. I am pretty sure her mother would be ok with this as she is fairly easy to get along with. getting the loan for the full amount would make our monthly obligation less although it would put us paying off the loan for a longer term, however it would be a longer term even with the smaller loan. Is this a good idea or not?

IMO, not really. I'd advise Dad to get caught up on arrears immediately, regardless of if that requires a loan or not.

But to pre-pay CS two years in advance? Nope. Because CS can be revisited, and he might not be "done" after all.

I used to have lots of bookmarks, but I tossed 'em. One told whether or not it was even allowable to pre-pay CS. You could google and see.

 

[CSO286]

If it is paid to the state, it can be pre-paid, but the support will only go out in increments.

Ex: Dad owes $200/mth
$200 X 24 = $4800

Dad send in to CSED the $4800.

Each month on the first (or whatever appropriate date), $200 is disbursed to the CP.

Dad will want to contact his caseworker to let them know he's prepaying it. Otherwise CSED migh auto-refund Dad $4600......

I have several cases where the NCPs prefer to be prepaid, especially when they work seasonally. They'll elect a higher deduction from payroll to cover the months when they are laid off.


ETA: If it's paid to the CP, then Dad might want to get some sort of stipulated agreement indicating that the support has been prepaid and the case is paid in full.

None of which precludes the CP from requesting and obtaining an upward modification before the child emancipates.

 

[Antigone*]

If it is paid to the state, it can be pre-paid, but the support will only go out in increments.

Ex: Dad owes $200/mth
$200 X 24 = $4800

Dad send in to CSED the $4800.

Each month on the first (or whatever appropriate date), $200 is disbursed to the CP.

Dad will want to contact his caseworker to let them know he's prepaying it. Otherwise CSED migh auto-refund Dad $4600......

I have several cases where the NCPs prefer to be prepaid, especially when they work seasonally. They'll elect a higher deduction from payroll to cover the months when they are laid off.

When you look at the time value of money and the interest dad would be paying to take out a loan to pay the lump sum, this option will be more costly to dad. Especially if the funds will only be disbursed monthly to mom. If this is the case the State gets the benefit of the TVM and they win.

 

[mistoffolees]

If it is paid to the state, it can be pre-paid, but the support will only go out in increments.

Ex: Dad owes $200/mth
$200 X 24 = $4800

Dad send in to CSED the $4800.

Each month on the first (or whatever appropriate date), $200 is disbursed to the CP.

Dad will want to contact his caseworker to let them know he's prepaying it. Otherwise CSED migh auto-refund Dad $4600......

I have several cases where the NCPs prefer to be prepaid, especially when they work seasonally. They'll elect a higher deduction from payroll to cover the months when they are laid off.


ETA: If it's paid to the CP, then Dad might want to get some sort of stipulated agreement indicating that the support has been prepaid and the case is paid in full.

None of which precludes the CP from requesting and obtaining an upward modification before the child emancipates.

Or Dad needing a downward modification based on change in circumstances. What if he loses his job involuntarily? Or what if the kid is emancipated early for some reason? The money will be paid and he'll still owe the bank the money. If he hasn't prepaid, he can ask for a modification - and possibly not pay anything.

 

[CSO286]

Or Dad needing a downward modification based on change in circumstances. What if he loses his job involuntarily? Or what if the kid is emancipated early for some reason? The money will be paid and he'll still owe the bank the money. If he hasn't prepaid, he can ask for a modification - and possibly not pay anything.

Well, if Dad gets a downward mod, he could always request that the prepaid funds (or any portion thereof) be refunded to him. IF CSED is enforcing it, we have no right to hold onto any prepaid funds once the NCP requests otherwise.

 

[Antigone*]

Well, if Dad gets a downward mod, he could always request that the prepaid funds (or any portion thereof) be refunded to him. IF CSED is enforcing it, we have no right to hold onto any prepaid funds once the NCP requests otherwise.

That brings up an interesting question CSO. So what if the funds are pre-paid and then some time later dad requests a downward modification for whatever reason. Mom could argue, that the funds have already been paid and he does have the resources to fulfill his obligation. I wonder if the argument could hold water.