In Tennessee, past due child support carries 12% interest. The way the statute is written, child support is late if it is not paid on the day it is due and the past due child support becomes a judgment against the person who owes the child support. That judgment carries 12% interest and the interest itself becomes child support.
So what does all this interest talk really mean? Not much, unless the arrearage is sizable. For example, if you are owed $500.00 per month in child support and the person owing child support misses a payment, that missed payment accumulates about $65.00 the first year, $70.00 the second year $77.00 the third year, and so on. After ten years, that $500.00 missed payment equals about $1,300.00. Also, when child support payments are paid, the amount paid is first credited to current support and then to the arrearage. Many times this results in missed payments running on for years, collecting thousands of dollars in interest.
Imagine the common scenario where the father owes mother $500.00 per month in child support, but father loses his job. He can’t make the $500.00 per month payment for their 5 year old child and falls six months behind on his support payments. After six months he gets a job and starts back making the $500.00 a month payments. Mother is understanding and doesn’t go after father for the missed payments. Father continues to make the $500.00 a month payment for current support but doesn’t pay any on the arrearages. Thirteen years later, when the child turns eighteen and father no longer has a current child support obligation, father continues to pay $500.00 per month to pay off the “$3,000.00” arrearage from when he was unemployed. Unfortunately for father, that arrearage is now a judgment worth over $9,000.00 and accumulating interest at the rate of 12%.
There are a couple of things to keep in mind regarding child support interest. If you are the one owing child support and are behind on your child support payments, pay extra each month. The extra money will go toward the arrearage and will keep interest from accruing on the entire amount. Be careful, though. If you overpay, any amount paid in excess of what you owe is a gift. In other words, you can’t “pay it forward” when it comes to child support.
If you are the one receiving child support, make sure the interest is included in any court order setting arrearages. If you don’t and the court fails to include the interest, it could be lost forever. In some cases that could amount to thousands of dollars. Also, keep in mind that the court will usually not make the calculations, so it’s up to your attorney to calculate the interest on any past due child support before you go back to court.