Child support orders are rapidly becoming worthless (no different than judgments). It’s not a collection problem, it is an ability to have some power to get access to information like bank accounts, employment, the vehicles owned so you can collect on your order.
For example, how in the world is anyone expected to find the bank account of their ex-spouse and determine if there is any money in the account?
Due to the fact that there is so much attention in the media about the Family Responsibility Office (FRO), right now, about collecting child support, I am going to help people understand the real reason why their child support will never be paid or collected.
There is no point in blaming the FRO – they run into the same problems as any starving recipient trying to collect support. They send letters, they make phone calls and they manage a payment systems for those payers (lets call them debtors) who actually pay.
The failure to collect these order is not about collection at all. It’s about trying to find the assets, the employment, the bank account, the property or the vehicle of the debtor so you can collect.
Your on your own and it’s and “investigative task” not a “collection task”. This is the main reason why assigning support orders to collection agencies will never work. Collection agencies make phone calls, write letters, and report the debt into the debtor’s personal credit bureau file.
They have no access to bank account information nor do they have any power to obtain the actual information you need to collect on your order. This is an investigate mission on all fronts and someone has to play detective and it won’t be any government agency doing if for you.
Find a bank account.
Find property (land or a house).Find employment.Suspend the debtor’s driver’s licence.
Finding A Bank Account
You are expected on your own to find a bank account with money in it. You need to identify the bank (i.e. the institution) and the actual bank branch where you believe the debtor might have a bank account. You do not have to have an actual account number.
How on earth is someone expected to lawfully find a bank account on a person but most importantly if there is actual money in the account? The banks certainly won’t give out this information, as they will protect their customers, and even more so now, with the new privacy legislation and fraud and identity theft on the rise.
There is no system, nor any powers of a support order, which will allow recipients of support orders to properly and lawfully get bank account information in order to proceed with a garnishment. What about if the debtor works at a job for cash? or perhaps the account is joint? or is in some other name? or even a company name as with a self employed person?
Finding Property (land or a house).
It is possible in most states and provinces to take a debtor’s name and run the name through a computerized database to see if they own land or a house. But very few child support debtors put property in their name. Some may be found to own property jointly however depending on where you live you may be able to register an execution on the property.
This would merely allow you collect monies only when the debtor sells the property. You would collect what is left over after all the mortgages and expenses have been paid on the sale.
While you may find employment on the debtor through word of mouth, friends, relatives etc… Trying to garnish employment wages can be very difficult if not impossible if your debtor falls under one of the categories:
(Working For Cash)
(Working Under Contract)
(Low Waged Employee)
(Working For Cash)
One of the biggest reasons your child support will never be paid is the underground economy which is nothing more then a term for people who go to work everyday and are paid in cash.
Millions of people go to work every day and work for cash. They are paid in cash and never deposit their cash wages into any bank account or report their income to the IRS or Revenue Canada.
If they are paid by check from a cash employeer they simply cash their check at a local cash stop store and pocket their wages in cash. People who live like this do not fear collection agencies nor are they concerned about their credit rating. They don’t need credit cards or credit as they pay cash for their expenses.
Finding out if a person is working for cash can be impossible on your own. There is no other way to show a person is working for cash then to have them followed.
How do you show cash from hand to hand? The normal course of investigation would be to have the debtor followed into work. Obtaining video or pictures of a debtor spending every business day at the same job site for eight hours yet never reporting a nickel of income.
But many who are starving for child support can not afford to hire private investigators at $50.00 to $75.00 per hour plus kilometers and expenses. Doing surveillance on your own could be illegal and dangerous from a driving stand point.
When you have a debtor working for cash not paying child support or filing tax returns who then is responsible for this mess?? Is it the Family Responsibility Office or the IRS and Revenue Canada who is responsible for cleaning up the underground economy?
It is logical to expect the FRO, the IRS or Revenue Canada to follow a cash paid dead-beat dad into work at 6:00 amto a construction job-site? With all the controversy surrounding privacy concerns can we expect that anyone can solve this problem?
(Working Under Contract)
One of the biggest scams going to avoid child support (and judgments) is employers who hire a person (a debtor) under contract and call it ”contract”. This is most commonly used by employeers to avoid paying payroll taxes. When we use the word “contract” we are not talking about about a contract position or an agreement.
We are talking about a situation where an employer pays an employee (the debtor) by check and makes it look on the books like the employee/debtor is a business who invoiced the company.
The debtor merely gives an invoice to the employer every second friday for his wages. No tax is deducted and no income is ever reported.Many employers create actual written agreements where the employee has to promise in writing to file taxes at the end of the year.
But what many don’t realise is that this contractual relationship can be very very illegal. If in the tax year the debtor has worked for only one employer that whole year and he has not invoiced any other company, the IRS and Revenue Canada could consider the relationship illegal.
But what about the other side of the coin? Much of the reason why child support is not being paid is that many payers of child support cannot easily and cheaply apply to the court to have their support orders reduced if there is a change in their employment of financial situation.
The result is that these payers fall drastically into arrears, being unable to afford to get their orders to reflect their true income.The ultimate result is that the payer will become so far in arrears their only alternative is the underground economy (working for cash under the table) to avoid a large garnishment of wages that may, in fact, be unfairly registered against them.
Lets do the math!! The average retainer to a lawyer to have a support order reduced (or the legal term “varied”) can be anywhere from $2000.00 to $6000.00. Days will be spent preparing court papers and attending at court hearings. For example: a seasonal worker in like a landscaper, may earn very high wages in the warm, summer months, but in the winter the wages drop or he/she may earn nothing at all.
The seasonal worker may be paying $700 per month in support, based on a job he/she had two years ago at the time of the divorce. Now, years later, the income has dropped. At $2000.00 to $6000.00 in legal fees to get an order varied who can afford to keep up every single time there is a change in employment circumstances. Some courts will allow you to file the paper work and attend on your own (without a lawyer) yet some judges will insist you be represented by a lawyer.
It’s a crap shoot if you think you can do it on your own and find a judge who will listen to you. The Law Society of Upper Canada has just recently licensed Paralegals in Ontario.
In the past a payor of child support could perhaps hire a Paralegal to cheaply assist in completing the forms to have a support order reduced. It is now illegal for Paralegals to advertise this service and to do may aspects of family law or divorce law. This now makes it more expensive to get your support order reduced. Learn the word “no standing” real quick.
There will be nothing more humiliating if you file your papers and attend at court when you are drastically in arrears depite the reasons you may have. Chances are you won’t have any standing at all before the judge despite the legitimate reasons you may have for being unable to pay and being so far into arrears. As long as their is no system in place to reduce a child support order inexpensively and less time consuming the family court system will continue to manufacture no payers into the underground economy.
You can roll your eyes all you want but no-one in their right mind will spend the time and money to have their order changed every time there is a change in financial circumstances.As would be payers fall into the underground economy, they will not only continue to not only avoid paying child support, but also personal income taxes.
1. Until the court is willing to give more judicial powers to support orders and judgments information be impossible to find to allow people to collect on their Orders and Judgments Things like the order having authority or power to force a payer’s employer to give circumstances regarding employment.
A bank being served with a support order to be compelled to report on all bank accounts registered in the payer’s name. The department of transportation upon being served with a support order being compelled to provide a vehicle and address information so a vehicle could be seized or a license suspended. Assets have to be identified before there can be collection and/or enforcement.
2. Until a simple paper system is in place to allow parties to go to court (with or without a lawyer) to get their orders changed, simply and cheaply, there is a change in their financial circumstances, payers will continue to outsmart the system, go underground and not pay support or income taxes.
It is possible to represent oneself in small claims court and landlord tenant Court but not in the family court. These hearings could be conducted with a simple set of forms and be heard by a referee, arbitrator or registrar, instead of busy judges with overloaded family court dockets. The system right now is too complicated, time consuming and expensive.
3. The only way to catch a person working for cash is to follow them in to work – plain and simple. No search method on earth will reveal how a person is truly spending their working day if he or she is not reporting his income.Government Insurance companies like the Workmens Compensation Board (now the WSIB) spend millions of dollars to hire independent private investigation firms to use private investigators to follow (via surveillance) on would-be cheaters of the insurance system to see if they are continuing to work or faking their injuries during the business day.
It’s the only way to fight this kind of fraud. Revenue Canada (or the IRS in the United States) should be teaming with the FRO to help fund Private Investigation agencies to conduct surveillance and inquiries on cheaters not only of child support but working underground for cash. A person working for cash trying avoid child support is not only cheating the family court system but is in fact committing tax evasion.
This makes the problem a joint responsibility of Revenue Canada and the IRS who continue to unsuccessfully battle the underground economy. The underground economy is partly manufactured by the failing family court and FRO system.
Privatization of the FRO, or forwarding child support orders to collection agencies, will accomplish nothing in the way of actual collection. Collection agencies make phone calls, send letters, and report to credit bureaus. It will be a waste of your tax money on a system that is already failing both sides of the coin.
You can’t collect on what you don’t find. Finding assets is an investigative mission. Dead-beat parents need to be followed into work – plain and simple – there is no other way.