Child Support Debt – What Can You Do?

Posted on

If you owe child support debt, chances are you’re familiar with the consequences of non-payment – regardless of where you’re located in Canada.

We meet parents all of the time who have fallen behind in support payments. Job loss, depression and other illnesses – really any major change in life circumstances can impact your ability to pay. It really isn’t very hard to fall behind and generate a child support debt, but it can be very hard to get back on track when you’re ready to. We have many years of experience helping parents who have fallen behind with court-ordered payments. Most parents know there are steep consequences when you can’t afford to pay child support debt. What many parents don’t know is that we can help people get their finances back on track. You can catch up on maintenance arrears, avoid negative consequences, and move on with your life.

Do you live in British Columbia?

Depending on which province you reside in, the consequences for non-payment of a child support debt varies somewhat. Recently, in British Columbia, a ruling came into force that allows for your driver’s license privileges to be revoked by the Insurance Corporation of British Columbia (ICBC) if you cannot keep up with your maintenance payments. The new rule came into force on March 1st 2019, allowing the Family Maintenance Enforcement Program (FMEP) of BC to give ICBC the power to refuse to renew your license if you owe more than $3,000 in missed child support payments.

Fortunately, we’ve recently brought out expertise to the Greater Vancouver Area. Our Licensed Insolvency Trustee, Ashvin Sharma, can help you understand all of your options. If you’ve got other debts – we can make it easier for you to get rid of them. We’ll help you to afford to resume your maintenance payments and restore your license to drive.

In Ontario

In Ontario the Family Responsibility Office (FRO), can likewise suspend your license for non-payment of child support. FRO has been enforcing and collecting child support debt for many years. According to Community Legal Education Onatario, in addition to processing routinely scheduled maintenance payments (often by payroll deduction via your employer) FRO also has the power to:

  • Garnish your wages/income source (deduct support from your pay cheque, Employment Insurance Benefits, Workers’ Compensation, Income Tax Refunds, Severance Pay, pensions).
  • Garnish your bank account, take money from your account via your bank with a court order – they can even take up to 50% of the funds you have in any joint accounts you hold.
  • Get a court order against any person suspected of helping you to “hide” income or assets.
  • Register a lien against any real estate or personal property you own.
  • Make credit bureau reports that severely damage your credit.
  • Cancel your passport, making it difficult for you to travel outside of Canada.

With steep penalties like this, you need debt consolidation for any additional debt that you have – even if it means a consumer proposal or bankruptcy. Once all of your non-child support debt has been cleared up and the interest has been stopped – you can focus on catching up on support arrears.

Why can’t I get relief from my arrears?  

Child support debt is not the same as a debt owed to your credit card company or bank. Child support payments are court-ordered and under the bankruptcy rules of Canada, this type of debt survives the bankruptcy process. What this means is, you can file for bankruptcy protection at any time you like – but you won’t get relief from child support arrears under the Bankruptcy Act.

How can a Bankruptcy or Consumer Proposal help?

We can’t help you get rid of your child support debt – but we can help make room in your budget to pay off your arrears. You can negotiate with FMEP or FRO to set a regular payment schedule and we’ll help you get relief from any other debts you have.  A bankruptcy or consumer proposal can help lift the burden of your other debts. Paying off your child support debt will get a little easier  – and fit into your budget. You won’t have to worry about groceries or rent because you’ll be able to afford living costs while catching up on arrears.

How do I get started?

Gab a notepad and add up everything you owe to get a total. Next, write down all of your major assets, such as a car and/or house. Finally, jot down your average monthly income and add up how much your monthly bills typically cost you. If you’ve got these numbers in front of you and are concerned about any of the following, it’s time to call Spergel, 1-877-501-4321.

  • You own a home but you’ve got no equity.
  • Your monthly bills are higher than your monthly income.
  • The amount of your total debt(s) is higher than your annual income.

Debt solutions to help pay off your child support debt.

Are you ready to explore debt solutions that will free up  money to service your child support debt? We’re ready to show you how. Book a FREE consultation with a member of our team and discover how great it feels to become debt free. You owe it to yourself to find your best debt consolidation plan, and have the debt-free, stress-free, lifestyle you deserve. Please call 1-877-501-4321 to book your FREE consultation today (you can also book online). You owe it to yourself to catch up on your child support debt – get the debt relief you need. Even if you’re just catching up on missed payments – you’ll reduce your stress and get back on track.