Verrrry Interesting!! – Interest on Late and Unpaid Child Support

One of the memorable cuts from the late 60’s television series, Laugh-in, was Arte Johnson peering from behind a leafy green plant, commenting on whatever had just happened as verrrry interesting!

An interesting (but often overlooked) aspect of family law in most states is the impact that judgment interest can have on the calculation and collection of delinquent child support and maintenance.

Under Kansas law, for example, each installment of child support or maintenance is a separate judgment on the date the installment becomes due and payable. Therefore, when a parent is ordered to make a child support payment on the 1st of each month, twelve separate judgments arise in the course of a year. If maintenance payments are also payable at a monthly interval, the total is 24 separate judgments each year.

Interest is payable on each child support or maintenance installment, as on any judgment, from the due date until the payment is made. Under the provisions of KSA 16-204, the judgment interest rate changes on July 1 each year. Since the enactment of this statute, the rate has varied from a low of 4.75% to a high of 15%!

Under the Kansas Supreme Court’s decision in Dallas v. Dallas, 236 Kan. 92, 689 P.2d 1184 (1984), each payment is applied: first, to the current support due for the month (or other period) in which the payment is received; second, to the interest accrued on any unpaid support; and finally, to the reduction of any support arrears. Consequently, the unpaid balance of support continues to generate interest until all of the past due interest is paid, and only then is the unpaid balance itself reduced by payments.  Furthermore, since Kansas judgment interest does not compound (interest is computed only on the unpaid support total, not on the unpaid interest total), the totals for interest and support are never combined (unless the totals are reduced to a single, consolidated judgment).

To illustrate the complexity involved, consider a child who just turned three, for whom a child support payment of $350 has been ordered. Ignoring any subsequent changes in the support amount, the total support payments through the child’s 18th birthday will be $63,000 (15 x 12 = 180 x $350). If the obligor makes each child support payment on the due date or before, no interest will accrue. But if the obligor mails each payment on the due date, and it takes an average of seven days for the payment to be received and credited at the payment center, and the interest rate applicable is 10% per annum, each payment will accrue interest which, while seemingly insignificant, can mount up. If the obligor misses a payment or two each year, the results can be astounding. Missing only the first payment and making each one thereafter by the 7th of the month, can result in interest totaling $115.76 over the next 34 months, in addition to the $350 still due from the first month, for a total of $465.76. The determination of the interest accrual requires the application of the appropriate daily interest rate to the support amount unpaid, for the number of days elapsing between the due date and the payment date, and repeating the calculation for each support period.

If the support is payable weekly (as it was in a Miami County case the author handled several years ago), the interest calculations can cover as many as 936 periods between birth and majority. If the support is only $25.00 per week, and the obligor ignores the obligation for 18 years (as also happened in the Miami County case), the child support arrears will total $23,400.00 on the child’s 18th birthday, and interest will add another $18,546.82!

Calculating the interest on late or unpaid child support can help cover the attorney fees involved in collecting the delinquent support, and not doing so can cost the client substantial sums of money!

The only practical way to accomplish the calculations is with the aid of a computer and appropriate software. One such program is Bradley Software’s ArrearsMaster®.

Conceived by Brad Short for his domestic relations practice in Overland Park, Kansas, ArrearsMaster® calculates the interest on a series of support or maintenance obligations with irregular payment amounts and intervals, applying the statutory interest rate applicable to the periods involved.

ArrearsMaster® currently supports interest calculations for Kansas, Missouri, Nebraska, Oklahoma, Minnesota, and Florida. Other states are being added, and the program is updated via the firms’ website, whenever the rates change during the 12-month subscription period.  Other products from Bradley Software include the Bradley Child Support Calculator® programs for Kansas, Texas or Missouri, the Bradley Parenting Time Calculator®, and DomBook®, which contains a series of Excel financial templates for family law professionals.

About Brad Short

CEO : Bradley Software; Of Counsel at Short, Borth & Thilges, Attorneys at Law, LLC, Overland Park, Kansas. Born Birmingham, Alabama, December 27, 1941; admitted to bar,1966, Kansas and U.S. District Court, District of Kansas; 1975, U.S. Court of Appeals, Tenth Circuit; 1976, U.S. Supreme Court. Education: University of Colorado (B.A., 1963; J.D., 1966). Contributing Author, Practitioner's Guide to Kansas Family Law, Kansas Bar Association, 1997. Listed in: The Best Lawyers in America, Family Law, every year from 1987 through 2013. Member, Technology Advisory Committee, Kansas Judicial Council, 1991-1998. Member: Bourbon County, 1966-1977 (President, 1970-1971), Johnson County (Member: Ethics and Grievance Committee, 1984-1998; Family Law Bench/Bar Committee, 1984-), Kansas and American (Vice-Chair, Solo Practitioners and Small Firms Committee, Economics of Law Practice Section, 1984-1985) Bar Associations; Kansas Trial Lawyers Association, 1974-1984 (State Treasurer, 1975-76; Member, Board of Governors, 1974-1984). Fellow, American Academy of Matrimonial Lawyers, 1994-2013 . Practice areas: Family Law.
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2 Responses to Verrrry Interesting!! – Interest on Late and Unpaid Child Support

  1. Jennifer says:

    Curious, is interest AUTOMATICALLY calculated by the trustee’s office on arrears support that is awarded by court, or must it be specifically requested by the support recipient/their attorney to be payable?

    • Brad Short says:

      Generally, it is the responsibility of the party requesting the assessment of interest to both calculate the amount and request the Court to include it in a judgment. As to whether an enforcing agency, such as a court trustee, calculates and requests the imposition of the interest judgment would have to be a question addressed to the particular enforcing agency.

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