In Pursuit Of Child Support

Your heart sinks down deep into your belly as you open your phone bill. With shame and dread you see not just the current charges, but a sterile red insert alerting you that your account is seriously past due. Again. Gently, the bill is placed on top of the others. Electric bill. Credit card statement. Mortgage note. Relief from this debt seems elusive as your sadness turns to anger when you realize that your ex has failed, once again, to pay even a dime in child support for the month. The pale excuses ring in your ears - “Times are tough”, “I bought her a video game last month” and “Next week, I promise”. None of that nonsense pays the bills nor puts food on the table. None of that eases the despair that you feel down to your soul.

According to the U. S. Census 2006 report, nearly 22 million children depend on timely child support payments to sustain them. This report further indicates that approximately 87% of custodial parents were owed delinquent payments from the non-custodial parent. Clearly there is a need for more efficient child support collection efforts. Because of this gap in services in 2009 Senate Bill 1859 entitled “Child Support Protection Act of 2009” was proposed and has a predicted implementation date of mid-2010. This bill seeks to allow federal funds to match state funds in pursuit of past due child support payments. While this is a step in the right direction as far as protecting the financial interest of dependent children, much more needs to be done. And, there is much that the custodial parent can do to move their case forward.

Sometimes it seems that the easiest piece of business is the actual child support order. All parties work together to come to some sort of mutually beneficial agreement, given the guidelines of each individual state. Most states work with a child support guideline worksheet which translates to a support order of about 20% of the non-custodial parent’s income. Further, orders concerning the coverage of day care expenses, health insurance cost and extra-curricular activities may also be drafted. Many a parent has walked out of a courtroom clutching these agreements smiling as they think that the worst was over. Actually, the real work starts at that very moment. According to the US Department of Health and Human Services 27% of non-custodial fathers and 47% of non-custodial mothers completely default on their support payments and offer zero monetary contribution.

A savvy custodial parent will work immediately post-order to do what they can to ensure that they receive all monies owed to them in the near and distant future. This could be as simple as keeping notes concerning their ex’s employer, their work schedule, and the bosses name. This type of basic information will prove to be very helpful in the months ahead should the payment of support become increasingly erratic. Now is a time to start a file with all of your paperwork, including a log of all support related conversations with your ex, state child support hotlines and your attorney.

Speaking of your attorney, the question you may be asking is this: “Why not just let my attorney handle all of this?”. This simple answer is that it is cost prohibitive to nearly all custodial parents. Per www.lawyers.com the average national billing rate for an attorney is $284 per hour. This means that your 15 minute phone call just cost you over $70.00. Since nearly a quarter of custodial parents fall at or below the poverty line, a private attorney is just not feasible.

The first key to this process is to adjust your thinking about child support. This money is not a gift to you, is not optional and is not contingent on how often the non-custodial parent sees the child. This money is not a luxury, is not something to be bartered and is not a donation. It is money to support a child that two people created. It is a legal debt and a real obligation. Whatever happens outside of the support is secondary. You get along? Great! Hate each other? Doesn’t matter. Pondering getting back together? Of no consequence. The money is the money, plain and simple. This is a gender neutral issue as well, as 16% of all custodial parents are fathers and that number is anticipated to rise in the coming years

Another mistake that people make is believing that if the ex pays for additional items (e.g., a birthday party, new shoes, school supplies) then it relieves the non-custodial parent of all or part of their fiscal responsibility. New shoes are great, but that won’t pay the electric bill. This type of off-set system will only work if all parties agree to the terms in advance and preferably it is all in writing. It is one thing to come to agreement that you will reduce support by 25% if the ex pays for summer camp and it is quite another for a non-custodial parent to refuse to pay support in November because they bought a new backpack in August.

Yet another error that folks make is believing that in order to qualify for state child support enforcement services they must receive state benefits. While it is true that nearly a third of all child support cases involve a custodial parent who receives public assistance, most do not. All states have a department that deals with child support enforcement (“CSE”) and nearly all of these agencies charge no fee for their services. In 2004 over 4 million custodial parents turned to their local CSE for some sort of assistance with their case. Starting with the CSE of your state very early will prove to be helpful. As always, keep track of who you speak with, what you discussed, what follow up is necessary and what sort of timeline you are expecting. It is very helpful to also get an email address and fax number for your local CSE office, should you need to quickly get information to them.

Getting financial assistance for your dependent children is your duty and the non-custodial parent’s responsibility. Think of it in terms of an actual job and decide each week what you will do to get the money your children deserve. One week you may make a phone call to the local CSE office to get an update on your case. Another week you may try to verify where your ex is employed. Yet another week you may want to write to your local congressman to show support for any pending child support enforcement legislation.

If you feel that dealing directly with your ex on these matters is hazardous, then don’t. These things can quickly get escalated and virtually never result in a payment towards past due support. You will walk away angry, frustrated and empty handed. Needless to say, never let these matters trickle down to your children and make them aware of any animosity between the two of you.

Being a parent means many things. It means helping with homework and feeding them healthy foods and kissing their scrapes. You will also cry with your children and laugh at their silliness and dream with them. Part of your responsibility as a parent is also to ensure their continued financial security in order to create a peaceful living space where they can thrive. Do it for them.

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"Support Master" Anita N. Botchway Ensures That My Daughter Grows Up With No Daddy

Got the results of a recent Support Master hearing the other. I've been trying to get my child support payment lowered since the end of 2008, but the Philadelphia Family Court has rejected my pleas. I have been through hell, including spending time in prison thanks to judge Joel S. Johnson, also known as "Lock 'Em Up" Joel (more about judge Johnson here.) By refusing to reduce my support payments, the system has made it impossible for me to see my daughter. I simply can't afford it. And so, she is now a 7-year-old girl with no father.

A special thanks to Anita N. Botchway, the "Support Master" who heard my case. She decided to set my income to what it was 10 years ago when I was working in a law firm in New York City. My current income in barely a fraction of what it was then, as evidenced by the tax forms I submitted during the hearing. Despite presenting honest documentation of my income, despite a devastating recession -- the worst since the Great Depression -- Anita N. Botchway reached the most nonsensical conclusion I've even seen. So,

Anita N. Botchway, you deserve a very special thanks for setting my income to what it was back in the year 2000. You are now the #1 reason my daughter will have no daddy. Anita N. Botchway, you are an exceptional legal tyrant in an exceptionally tyrannical Philadelphia Family Court.

If I had completely given up on my business and got a job as a security guard, Ms. Botchway would have still set my income to what it was 10 years ago. And that's what so screwed about about this system.

Time for some background.

Years ago, when my support payment was set, I had every intention of making sure that my daughter had the best of everything, despite my rapidly declining income. The mother of my child (Mama) promised that my daughter would continue with the excellent reading and math learning at Kumon, and she promised that my daughter would attend private school. As soon as I signed on the dotted line, my daughter was enrolled in public school, and the visits to Kumon stopped. How that for dishonest? I've been trying to get my payment reduced ever since, to no avail. Reducing my payment to a level that's fair would have kept me from taking on a huge amount of credit card debt, and kept me out of prison.

Now, frustrated as I have never been frustrated before, I am forced to start the process all over again.

The entire child support process in Pennsylvania is inherently corrupt. That's because the system takes a 10% cut of every support payment made. Therefore, the employees -- including support masters and administrative judges -- are extremely reluctant to reduce anyone's payment, as this would mean less cash flowing into the system.

I received a letter from Mama's lawyer today. Appears that she is interested in negotiating a settlement over support and custody. I am writing my reply now. I will blog again with news.

As always, thanks for reading. Your comments are always welcome.

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What Did You Do With Your Stimulus Check?

Months ago, when I first heard about plans for an economic stimulus payment that would go to all taxpaying Americans, I could not help but think of how political leaders in ancient Rome would offer free Bread and Circuses as a way of tricking Roman citizens into giving up their political freedoms. The people would remain fat and happy while the elite would make plans to send them off to fight wars of conquest, for the glory of Rome.

I can't help but think of the war in Iraq as "the circus," and the economic stimulus payments as "the bread." Of course, we don't even have to leave our homes to enjoy the circus these days. Just turn on the TV and the images are delivered to you free of charge, thoroughly sanitized and censored, of course.

I wonder if anybody turned down the stimulus payment. After all, the money is basically a loan from China to the American people, a loan that our grandkids will have to payoff. There must be at least some Americans who find this objectionable.

So, what did you do with your stimulus check? Me? The $600 I received didn't even cover my child support payment, but I was grateful for the assistance. Your comments are welcome.

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Was Paying Off My Student Loan Debt A Bad Idea?

Student Loan Debt

Back in January 2008, I decided to payoff my student loan balance and be done with it. At the time, I wasn't too worried about draining my savings account, since business was good, and I felt that my business was more or less recession proof. I was paying 8% interest, and there was no way for me to consolidate to get a lower interest rate, because I had already consolidated with William D. Ford. (FYI: you can only consolidate student loan debt once, unless you go back to school and get more student loans.)

Here's what prompted me to payoff my student loan debt:

The above is a clip from the 2007 tax statement sent to me by the folks at William D. Ford. As you can see, since I consolidated, the amount I paid toward the principal was about the same as the amount I paid in interest. That just boiled my blood, and made me a little bit sick to my stomach. I'd been paying interest my whole life, and I was tired of it. This student loan debt was the only debt on which I was paying interest. I had an opportunity to rid my life of interest payments, so I took it.

Now, I'm beginning to wonder if paying off my student loan debt was a good idea. Yes, I know, you're asking yourself, "how the heck can paying off a huge debt be a bad idea?" It can be, if, like me, you are now working with a depleted savings account. I have learned -- the hard way -- that my business is not recession proof. In fact, I have learned that it is in fact very sensitive to economic conditions. This is the first time the economy has taken a hard spill since I began expanding my business back in 2003.

I had paid off my car note a few months previous to paying off William D. Ford, which did not help at all. At the time, I was very confident in my ability to maintain a steady and strong income. I got cocky, and now I'm paying the price.

Here's are the other directions I considered:

• Keep paying ~$110 per month with 8% interest. Balance would be reduced to $0 in about 500 years.
• Increase my monthly payment to reduce the time it will take to bring the balance to $0, and reduce the total amount I would have to repay. Of course, with this option, I still would have been burdened with an 8% interest rate.
• Transfer the debt to a 0% credit card. A decent option, but with 2 significant negatives 1) Once the interest-free period ends, there is no way to guarantee that I'd be able to find another favorable 0% credit card deal to which I could transfer my balance. 2) Balance transfer fees. 18 months ago, finding a 0% credit card that doesn't charge a balance transfer fee was easy. With the onset of the economic slowdown and the global credit crunch, feeless deals have all but disappeared.

So, yeah, I'm hurtin' right now, but I'm still very glad that the debt is gone. I cannot put into words how satisfying it was to call William D. Ford to check my balance, and hear this.

So, how am I going to manage?

First, I'm going to petition the family court to have my child support payments reduced. My monthly payment is nearly $700 for one child, which is way too high considering my current income. The mother of my child and I recently canceled plans to send our daughter to an expensive, private school. The fees were just too high (~$8,500 per year.) That's too much for a child going into Kindergarten. Even if my current income was the same as it was one year ago, when I was making almost as much as a U.S. Senator, I'm 90% certain that I would have decided against sending her to that expensive school. Fact is, she's doing great in the subsidized private school she's attending now. She also goes to Kumon twice per week, which I can recommend to any parent who can afford the $200 per month (she is way ahead of her peers in math and reading, thanks in no small part to Kumon.)

Second, I'm going to cash out my whole life insurance policy and get a term life policy. Suze Orman has finally convinced me that whole life insurance is not the best way to go.

Third, I'm going to cutback on my food shopping. Thankfully, I stocked up on meat during the good times. I now have a deep freezer full of high quality meat that could last a year or so -- literally!

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If you can payoff your student loans, I say do it. Just don't payoff your car note within the same time frame! Comments welcome.

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FICO Credit Score Back Up to 760: Big Yawn...

Some good news and some bad news this month. First, the bad news.

The mother of my child moved out into her own condo, so, even though I am enjoying the extra space, stress relief and the freedom, I have agreed to pay $300 per month in child support.

$300 per month is too high, in my opinion, considering the circumstances. First of all, the mother of my child has a full time job with excellent benefits. She doesn't have to make car payments on her car (as I do), because she owns it, thanks to me. When her car broke down a couple of years ago, I gave her my very reliable and well-maintained car, and I bought another used car for me. Her insurance payments are very cheap as well -- less than $500 per year.

Now, don't get me wrong: I'm not trying to make a big deal out of my car donation, because it's really not that big a deal to me. I'm just laying down the facts here, and I think it's important to note the source of her assets.

Another reason why I feel that $300 per month is too much: our child -- I'll refer to her as TK from now on -- is in preschool, and I am paying for her tuition, which is $135 per week, or $540 per month.

Furthermore, it's not like TK is with her mother all the time. I pick up TK from school, and she spends all day with me every Friday (her preschool is 4 days per week), and she stays with me every other weekend.

Now, considering all these factors, I thought that $200 per month plus TK's tuition payments was fair. We debated the issue for about half an hour -- without any shouting, which was a welcome surprise -- and, in the end, I acquiesced and agreed to $300 per month. The way I see it, the bottom line is that we are in a critical transition period right now, and I really don't want to do anything to exacerbate the tensions that inevitably manifest themselves when a home is newly broken; my daughter can be surprisingly mature at times, but she's also very sensitive. My baby girl means a lot to me, so as long the money I'm providing is being used for food, clothes, weekend outings and trips to the hairdresser, I'm OK with it (I don't think I'm being a miser, but if you think I'm just being a cheap bastid', then feel free to post your comments below. I'm open to all rational arguments!)

So I'll be paying TK's mother by check tomorrow, and from February on I'll be making payments via a prepaid debit card, so that I can track all spending online. I'm not just being paranoid. When TK's mom was living with me, she would order stuff from QVC and the Home Shopping Network sometimes. Did I have problem with the spending? No, not at all. What did bother me, however, was the way she would spend money on items, then totally trash them or even throw them away a few weeks later. That kind of nonsense just boils my blood. That kind of spending is, in my opinion, a sign of a serious psychological problem -- possibly depression -- but that's a subject for a another blog.

I was hoping to fatten my savings account this year, as I'm getting too old to have such a puny balance in my savings account. But I guess I'll just have to work harder, and chase the dollar with even more zeal in order to maintain myself and my obligations.

One way I'm saving money is by using space heaters instead of the electric heating system that's installed in my place. My apartment's built-in heating system is a real hog at 8 kilowatts. When I got my first electric bill back a few years ago, it was a staggering $600 (December used to be a cold month in the Northeast U.S.) so I was highly motivated to find another heating solution (I was also motivated by my breathing problems, which are almost always exacerbated by built-in heating systems, no matter how well they are cleaned.) I turn my space heaters on when I need them, or when the nights are really cold, and this works very well for me. My heating bill now averages about $157 during the winter months, much less during the warm months, which is pretty darn good considering that I work from home (my computers actually produce enough heat to keep my home office toasty most of the time; of course, my office gets a bit too sticky during August, and I sometimes have to (grudgingly) power up my portable air conditioner.) I usually turn all my space heaters on full blast when my daughter is staying with me, as she has a habit of stripping down and running around the house with just her panties on.

I have to laugh at myself sometimes when I'm home alone. I'm so keen about saving money that my office is often the only warm room in the house during the cold months. This makes for some very eye-opening trips to the bathroom: who needs coffee when you've got freezing cold floors and toilet seats.

It's funny: when I was in high school, I never imagined that I would grow up to become the kind of person who thinks about money every day, but that's who I am now. I don't think an hour goes by without me thinking about ways that I can boost my income by another $10,000 per month, or ways that I can reduce my daily living expenses. Oh well.


OK, and now for the good news.

One of my businesses did surprisingly well during the holidays, so for February and March (it takes a while for my earnings to filter through to my bank account), I'll have some extra cash to play with.

As noted above, I don't think I'll be able to play catch-up with my savings situation, because my pending windfall has already been earmarked. I'm going to

• Maintain a decent quality of life.
  
  
• Take care of my familial responsibilities.
  
  
• Pay down my personal and business debt.
  
  
• Send my father $1,000 (he recently had surgery and needs some cash. I can empathize: I had a tonsillectomy back in April of last year.)
  
  
• Maybe, just maybe, take a small, working vacation (my last real vacation was in 1999.)
  
  

Putting money into savings now doesn't make sense to me. My savings account is at a great bank, but the yield is not very competitive, as is the case with most brick-and-mortar banks. Putting money into saving while paying an average of 8% on my debts isn't the smart way to go, in my opinion. Overall, I would still be "leaking money" via interest payments if I opted to go with such a plan.

But I am very tired of my personal credit card debt. I'm bored with it. I'm sick of it!

My FICO® credit score, provided by TransUnion, jumped back up from 753 to 760 last month, and it stayed at 760 this month (boring!) My credit score hasn't experienced a serious jump since September, 2006. I'm itching for the kind of fix that only a 10+ point jump to my FICO score can provide.

Yep, my credit score is good enough that I could easily qualify for yet another 12-15 month 0% balance transfer offer, which would allow me to avoid paying interest on my personal credit card debt for another year or so. But, the bottom line: transferring my debt via a 0% APR deal is just moving my debt around, and I'm tired of it. The banks and credit card companies have made some good money off my debt, but it's time to turn off the music and kick everybody out: the party is over. I now have the power to eliminate all of my personal credit card debt and some of my business credit card debt, and that's exactly what I'm going to do.

Here's what my current debt situation looks like:

Paying off my personal credit card debt should give my FICO credit score a huge boost, and should get me to my goal of an 800+ credit score sooner than I had originally planned (If bringing a personal credit card balance of $5,800 down to zero doesn't boost my FICO score above 800, then I will certainly lose faith in the system.)

At first, I was thinking of paying off my car loan. It would feel great to own my vehicle and get my title back into my fireproof safe where it belongs. It would also be great to get rid of the almost $390 per month I pay on my car loan; that's money that could ease the stress of my nascent $300-per-month child support payments. But the APR associated with my car loan is 6.25%, which is pretty good considering that the national Prime Rate is 8.25% right now. I'm paying higher than 6.25% on some of my other debts, so paying off my car loan is out, for now.

I then considered paying off my student loan debt. When I consolidated my student loan several years ago, I got an APR of 8.25%. Lots of people are consolidated at half the APR I'm paying these days, which makes me feel like I'm getting ripped off. But my student loan payments aren't stressful, and my credit card debt is more of a priority for me.

So, by March of this year, I will have completely wiped out my personal credit card debt, wiped out the debt on Business Credit Card #1, and made some major progress (i.e. cut the balance in half) with the debt on Business Credit Card #2. Business is kinda' slow right now, but if my new marketing push is successful, I plan on making some large payments toward my student loan and my car loan, so as to eliminate at least some of the interest I'll pay on those loans.

That's it for now. Remember: comments are always welcome.

Here's an updated image of my charted credit score:

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