Does Child Support Affect Your Credit?

Child support payments only affect your credit when you do not make them. Child support payments don’t build your credit score because you’re typically not repaying any borrowed money. However, an unpaid child support account can appear on your credit report and may negatively affect your credit score if left unpaid for a long time. In addition, when evaluating your credit application, creditors may consider this record and decrease your chances of being approved for credit. 

You may also find it difficult to buy property such as a car or a house in the future because of the negative credit records caused by unpaid child support.

Here’s everything you need to know about how an unpaid child support account affects your credit.

What Happens if You Don’t Pay Child Support?

Child support is a court order that typically arises from many family law and divorce cases. Usually, the court directs the non-custodial parent to make monthly payments to the custodial parent to support their children. 

This court order protects the children from the impact of the financial and economic hardships often caused by divorce or separation.

If you miss payments on the child support order, you’ll be in contempt of court, and the other parent may seek the court’s help in enforcing the order. As a result, the court may take different actions against you depending on how far behind you are in payment and your reasons for not paying the child support on time. Some of these actions include:

  • enforcing a wage garnishment order that deducts a portion of your income to clear the amount owed;
  • seizing your property until when you pay the overdue balances;
  • reporting the account to credit reporting agencies;
  • freezing bank accounts of the delinquent parent;
  • suspending professional licenses or a driver’s license;
  • confiscating non-custodial parent’s tax returns. 

Depending on the laws of a state, the court may also issue an arrest warrant for the indebted parent resulting in criminal penalties or a jail sentence.

How Soon Can Child Support Account Be Reported?

Different states have different regulations on when to report overdue child support accounts to credit reporting agencies. For example, some states require the child support enforcement agency to contact you before reporting the delinquent account.

Others may require the agency to only report accounts that have more than $1,000 in back payments.

If the child support enforcement agency contacts you for unpaid balances, you may take advantage of that opportunity to negotiate a payment plan. Ignoring the agency will only aggravate the situation, forcing them to report the account to the relevant authorities.

Common Causes of Jail Time For Unpaid Child Support

Failing to obey a court order such as a child support order leads to contempt of court. The custodial parent can request a hearing before a judge regarding the matter. 

As a result, you’ll be served with a court summons ordering you to attend the hearing. If you fail, the court will issue an arrest warrant against you, and you may end up in jail.

The contempt of court charges can also be reason enough for the judge to send you to jail. If you can’t afford to pay for the child support order, it’s better to consider legal ways of addressing your financial situation rather than ignoring the court order. 

What to Do If You Can’t Pay Child Support

If you can’t pay child support due to unavoidable reasons, you can request the court to modify the order to an affordable rate. Some of the legally acceptable reasons the court may consider while seeking a child support modification include:

  • losing a job;
  • having a lesser paying job than before;
  • suffering from a medical condition that makes it difficult to work.

Getting the child support order modified isn’t always easy because US laws put the child’s interests first. Unpaid child support is also not dismissed during bankruptcy like other debts, meaning you may be stuck with back payments for a longer period if the court doesn’t modify the order. 

However, if you’re facing extreme financial difficulties, you may need to agree with the custodial parent to persuade the court to waive the child support order. For example, if the custodial parent has enough income to support the child without your assistance, the court may waive the child support order.

Alternatively, you may discuss your situation with the child support enforcement agency and negotiate a favorable payment arrangement. If that works, the agency may not report your account to the credit reporting agencies or collections. However, that will last for as long as you continue paying what you owe as per the agreement. 

Does Paying Back Child Support Remove It from Your Credit Report?

The federal law requires the child support enforcement agencies to report overdue child support payments to the credit bureaus. Once reported, the account will remain in your credit report for seven years from the date of delinquency. Unfortunately, paying off the balances doesn’t remove the child support account from the credit report.

However, the credit bureau will update the account’s status once cleared. When that happens, the account will be closed at good standing without any negative information in its history. The updated status of the account will reflect on your credit history for up to ten years since the clearance date.  

It may take a few weeks for the credit bureau to update the records. However, if the account still appears in bad standing after paying the balances, you can file a dispute with the credit bureau to request an update.

How to Dispute a Child Support Account as Paid

Disputing the child support account as paid lets the credit bureau know that the records require an update. You can do this online or by mail using the contact information on your credit report.

The dispute letter should include the account in question and a statement explaining the dispute. It’s important to attach documents supporting your claim. You may also contact the child support enforcement agency responsible for your case to confirm if their records are updated. 

Speak to an Experienced Marin County Child Support Lawyer Today

If you have questions about the financial ramifications of a child support order in California, contact the Castro Law Offices today. We are ready and able to help answer your questions and will do all we can to put your mind at ease by helping clarify some of the inherent complexities found in California child support laws. 

Castro Law Offices is a premier California law firm specializing in child support issues, divorce, child custody, and all other issues concerning domestic relations. Castro Law Offices is based in Novato, California, but is ready and able to provide legal services and advice to clients in and around Marin County including Novato, San Rafael, Greenbrae, San Anselmo, Fairfax, Sausalito, Larkspur, West Marin, Ross, Mill Valley and Corte Madera. Contact Castro Law Offices today to schedule a confidential consultation.

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