NORTH DAKOTA

ARREARS REGISTRY

Goal:To reduce child support arrears through early intervention, effective use of administrative enforcement tools and payment plans that fit the obligor's ability to pay.

Strategic Plan: Supports strategies 1, 2, 8 of the National Child Support Strategic Plan.

Description:Recently passed legislation will make uniform the criteria that trigger the various enforcement remedies typically used in arrears collection. Examples of these enforcement remedies are liens, levies and license suspension. The intention is to set the "trigger" at a level that is low enough for the child support enforcement program to take action before obligors get so far behind that they may never get caught up. Obligors who owe at least two times the monthly support obligation or $2,000, whichever is less, will be placed on an arrears registry.

Under prior law, several administrative tools for collecting arrears had different triggers and some of the most effective tools often could not be used until an obligor owed at least six months of arrears. In North Dakota's experience, by the time an arrears collection action could be taken, the obligor was often too far in debt for a voluntary repayment agreement to be a realistic option. In addition, the different triggers for each tool made it difficult for child support caseworkers to use the right tool at the right time for a particular obligor.

Once an obligor is on the arrears registry, the caseworker will be alerted to consider any or all arrears collection actions. Many actions may be suspended or prevented if an obligor signs up for the plan, even if the arrears are not paid in full.

Payment Plan

North Dakota established a payment plan strategy in 2003 that requires the obligor with arrearages to make all current support payments on time, along with a specific amount due on arrears that is based on the obligor's actual ability to pay. In addition, for payment plans to avoid license suspension or reinstate a license, a down payment of $500 or 5% of the total arrears, whichever is greater, is required. The down payment is often waived for the obligor's first payment or if the obligor's monthly obligation is less than $500.

As an incentive for making sustained payments, the accrual of judgment interest is suspended on all arrears (assigned and unassigned) as long as the obligor complies with the payment plan. Interest that accrued prior to the payment plan on assigned arrears and on some unassigned arrears is forgiven if the obligor complies with the payment plan for one year. Any breach of the payment plan agreement results in immediate suspension of any previously reinstated licenses and in renewed efforts to collect arrears.

Measuring Effectiveness: A major benefit of early intervention is preventing delinquency. North Dakota plans to measure the effectiveness of the uniform trigger criteria by monitoring the number of IV-D cases in which the obligor is current or less than two months behind in payments. Also to be monitored are the number of current payment plans, breached payment plans and total number of down payments.

Results: Initially in 2003, the payment plan concept was applied to the suspension of recreational licenses and produced a 50 percent increase in collections from obligors who signed the plans.

It is expected that the uniform enforcement remedy will provide an early intervention method which should increase the number of arrears balances paid in full, reduce the overall length of payment plans, and increase arrears collections.

Location:Statewide

Funding:Regular IV-D funds are used.

Replication Advice:It is imperative to have legislative recognition of the need to manage arrears and the benefit of early intervention. This may mean that changes are needed in the state law. It is possible to have a few pilot projects without system support, but widespread implementation would require system support, including document generation, and clear parameters for negotiating payment plans.

Payment plans often require a payment on arrears that is larger than the amount currently due for purposes of income withholding. When incorporating a payment plan strategy, be sure that the amount under income withholding can be increased. Otherwise, the obligor may have to supplement the income withholding with a separate payment. In the case of North Dakota, new legislation was needed to allow for the amount of withholding to be increased.

Contact:

James C. Fleming

Deputy Director/General Counsel

Phone: (701) 328-3582

Email: sojfle@state.nd.us