Are Federal Stimulus Checks Paid Due to the Coronavirus Pandemic Subject to Garnishment for New Jersey Child Support Arrears?

Due to COVID-19, New Jerseyeans, among others, are experiencing difficult financial times. While there stimulus-300x198has been action by the government to ease financial burdens such as staying evictions and forbearing mortgage payments, the fact of the matter is that ensuring the receipt of child support during this time is critical. Children need the financial support of their parents in good times and bad times. The coronavirus relief bill includes direct cash payments to help people through the crisis — but one red flag that can cost otherwise eligible Americans money is owing past due child support.

When a parent does not make child support payments on time, the overdue payments are called arrears. In order to collect arrears there are various measures that can be taken against a parent that owes child support such as the following:

  • Jail
  • Driver’s license revocation
  • Seizure of bank accounts
  • Suspension of professional licenses
  • Suspension of passports
  • Seizure of a personal injury or worker’s compensation award
  • Conversion of the arrears to a collectible judgment
  • Reporting payor parent to a credit bureau
  • Creating a lien on real estate owned in New Jersey
  • Seizure of income tax refunds
  • Seizure of lottery winnings
  • Placing a lien on real estate Tax refunds are seized;

For the purpose of this blog, I will focus on the seizure of tax refunds and nontaxable stimulus payments in order to collect child support arrears. Americans will receive stimulus payments from the IRS, as they do their income tax refunds. The federal government has said it will not garnish overdue federal debt obligations such as federal student loans or back taxes from coronavirus stimulus payments.  However, the stimulus payments are subject to to seizure of private debt collectors if a judgment has been entered against you, and they are subject to garnishment for support arrears as well – just as an income tax refund may be seized of child support arrears are owed.  So, it is possible that stimulus payments could be seized, like tax refunds, to pay off child support arrears if those arrears are reported to the federal government.

Nevertheless, payors and payees who are experiencing financial distress due to job loss or a significant decrease in income still have the right to seek a child support modification. I have blogged before about calculating child support in which I pointed out that child support orders are modifiable, up or down. The seminal case in New Jersey on modification of support obligations is Lepis v. Lepis, 83 N.J. 139, 151 (1980), which allows for a potential modification of support based on “changed circumstances”. Among the changed circumstances that can result in a review or modification of child support obligations is a decline in the income of the parent who is paying child support. Conversely, the parent paying child support is entitled to a reconsideration of child support where there has been a significant change for the better in the circumstances of the parent receiving child support. A change for the better or worse in one of the parent’s incomes is not the only kind of change in circumstance that a court can consider. For instance, maturation of the child may result in a modification of support, some change in the need of the child, or some change in overnight parenting time arrangements.

The change in support should not, however, be only temporary.  What is not known at this juncture is how long-term Americans’ financial difficulties are going to proceed as it is not known at this time when the economy can re-open or how long it will take for Americans to recover.

Either parent can file a motion to increase or decrease child support. The party seeking to modify support (either to increase child support or decrease it) bears the burden of establishing a threshold (a “prima facie”) case of changed circumstances. Lepis, 83 N.J. 139 (1980). If the moving party does not establish at least a threshold burden, then the moving party will lose. If that “prima facie” case of changed circumstance is presented, however, then the court will order the parties to exchange documents as to their financial circumstances and the needs of the child. If there is a substantial issue of genuine fact that is in dispute, the court may order a hearing or trial, but will not do so in all cases.

The current coronavirus pandemic has created numerous issues for New Jerseyans and created numerous family crises.  Many of these issues are legally complex.  The office of James P. Yudes, A Professional Corporation is here to help you.  You may contact us for a consultation, which can be by telephone, Facetime, Skype, Zoom or other mode to ensure your protection.