Child Support Lending and Finance System

A child support financing system may provide a guaranteed payment for a custodial parent with an agreement by a non-custodial parent to pay a financed amount. A financing arrangement may provide a loan for previous underpayments, so that any back-support owed the custodial parent may be caught up, and the non-custodial parent may be given terms that are more financially achievable. An automated system may process and underwrite loans for non-custodial parents to make up back payments. The loan may fund a trust account or other mechanism that guarantees future payments. In many cases, the payments to the custodial parent may be administered by a state or federal agency. If the financing arrangement is in default for non-payment, a state or federal agency may collect the amount due from the non-custodial parent.

BACKGROUND

Child support payments are typically court ordered or court approved agreements for a non-custodial parent to pay a custodial parent after a marriage dissolution. Such agreements are intended to ensure that the custodial parent has the proper financial support to raise a child. Both state and federal law recognize the importance of the child's well-being and have various enforcement measures in place to ensure compliance.

Notwithstanding these court-ordered requirements of payments, many non-custodial parents fall behind on their payments. Such a failure to pay can put the child's welfare in jeopardy, at least in the short term.

SUMMARY

A child support financing system may provide a guaranteed payment for a custodial parent with an agreement by a non-custodial parent to pay a financed amount. A financing arrangement may provide a loan for previous underpayments, so that any back-support owed the custodial parent may be caught up, and the non-custodial parent may be given terms that are more financially achievable. An automated system may process and underwrite loans for non-custodial parents to make up back payments. The loan may fund a trust account or other mechanism that guarantees future payments. In many cases, the payments to the custodial parent may be administered by a state or federal agency. If the financing arrangement is in default for non-payment, a state or federal agency may collect the amount due from the non-custodial parent.

DETAILED DESCRIPTION

Child Support Payment Financing System

A child support payment financing system may provide guaranteed payments to a custodial parent pursuant to a non-custodial parent's agreement or obligation to pay child support. A non-custodial parent's obligation to pay may be through contractual agreement or through a court order, and, in many instances, a state or government agency may facilitate the transactions.

In a vast number of cases, non-custodial parents fall behind in their payments, which can cause hardship on the child. In recognition of this stress, many states and the federal government have systems in place to collect child support obligations from a non-custodial parent. The inability or unwillingness of a non-custodial parent to meet their court-ordered obligations has led to literally billions of dollars in overdue payments.

The child support financing system guarantees a court-ordered payment obligation will be met. Whether or not the non-custodial parent is making timely payments, the financing system pays the custodial parent according to the court-ordered schedule. Payments by the non-custodial parent may be made over a longer period of time and may accrue interest if the non-custodial parent falls behind. Because the payments to the custodial parent are funded and guaranteed, the child and the custodial parent should not suffer hardship for lack of the payments.

A non-custodial parent may run into different circumstances that may cause them to fall behind on providing for their progeny. Arrest and incarceration, unemployment, reduced hours at work, seasonal changes in work, accident or sickness are just examples of the trials that may beset a non-custodial parent.

In some cases, the non-custodial parent may refuse to pay based on emotional issues, such as anger, resentment, and the like, many of which occur during divorce or dissolution of a relationship.

A child support financing system may allow a non-custodial parent to meet their obligations of support by paying over an extended period. Such a system may benefit the custodial parent by ensuring reliable and consistent income to support the child, while allowing the non-custodial parent the flexibility to pay in different circumstances.

In a state-managed child support system, a non-custodial parent may make payments to a state agency and the state agency may pay the custodial parent the amount received. A state, federal, or other governmental agency may have the authority to garnish wages, enforce payroll withholding, or issue warrants or arrest for failure to pay child support payments. Some child support arrangements are private such that a non-custodial parent may pay the custodial parent directly and no such state agency may be involved.

A child support financing system may separate the custodial parent's income from the non-custodial parent's ability to pay. A trust account or other guaranteed payment mechanism may ensure that the custodial parent always receives the payment they are due. If a non-custodial parent falls behind on their obligation, the money advanced to the custodial parent will become a loan that the non-custodial parent will then be obligated to pay.

In some cases, the parents may use a child support financing system to create a loan based on back support that may already be owed. For example, a non-custodial parent may be behind on payments. A loan will be originated and used to meet the back support obligation by paying the custodial parent, then the non-custodial parent's payment terms may be adjusted or extended such that the loan may be paid back over time.

Some government programs may provide assistance to a custodial parent due to a non-custodial parent's failure to pay. In such cases, the assistance from the government program may act as an advance to the custodial parent, and the government program may require repayment of some or all of the amount from the non-custodial parent. In such situations, the child support financing service may pay some or all of the government obligations as part of a loan made to the non-custodial parent.

A child support financing system may operate by receiving an assignment of the non-custodial parent's obligation from the custodial parent. Sometimes, such an assignment may be known as subrogation, where the financing system may then receive all future payments from the non-custodial parent.

The financing system may also include an agreement by the non-custodial parent for any adjustments to the payment schedule. In cases where a loan may be created because of back support that is owed, the non-custodial parent's repayment terms may be extended. In some cases, the new repayment terms may extend past the child's date of emancipation.

A child support financing system may receive an application for financing. The application may include an agreement by the non-custodial parent to new payment terms, such as extension of the payment time or a change to the periodic amount of payments. The application may include copies of the current court ordered payments. An application may include financial statements from government agencies that may administer the court ordered payments. Such financial statements may indicate when the payments were actually made, along with any balances currently due and past due.

An underwriting process may evaluate the suitability of the situation for financing. In general, states have enacted powers to garnish wages, encumber assets, and other mechanisms for collection of child support payments, including even arrest and incarceration. In many cases, these collection and enforcement mechanisms may be available even when the custodial parent may have assigned or subrogated the future payments to the child support financing system.

In some cases, an underwriting process may use credit history, job history, tax returns, bank statements, or other financial, social, job, education, or other historical data about the non-custodial parent to determine terms for financing.

A new or modified court order may be entered once the application and underwriting process has been completed. The new court order may obligate the child support financing system to fund all future payments to the custodial parent, as well as modify the payment terms of the non-custodial parent. The new court order may also redirect the payments from the non-custodial parent to the child support financing system.

The child support financing system may have a web or application interface through which one or more of the parties may apply for and manage their financing.

A non-custodial parent may initiate an application through a web page or application by requesting the financing and providing information about themselves and their situation. In some cases, such an application may include providing information about the custodial parent, and the system may reach out to the custodial parent to obtain their consent for the use of the financial system. Such an outreach may be as simple as an email, SMS, telephone, or mail contact to the custodial parent explaining the situation and requesting their participation.

A non-custodial parent may request child support financing services when the parent is behind on payments, has struggled to meet their payment obligations, or wishes to restructure their payments to be more affordable.

In other situations, the custodial parent may initiate an application for financing. The custodial parent may have experienced missed or inconsistent payments, be owed back support, or otherwise be concerned about the non-custodial parent's ability to pay consistently.

In still other situations, a state case worker, court, magistrate, advisor, or other person may initiate an application on behalf of the parents. Such a situation may arise, for example, when government aid or assistance has been extended to the custodial parent due to the non-custodial parent's inability or unwillingness to pay child support. In some cases, an attorney representing either parent may initiate the child support financing process.

The web based or application through which an application may be created and managed may identify the parties of interest. This may include the custodial and non-custodial parents, and in some cases, a case worker, social worker, magistrate, judge, or other government official that may be involved in administering, monitoring, or adjudicating the matter.

The application process may provide an input mechanism for a non-custodial parent to explain why they have not been able to make the previous payments. In some such systems, the non-custodial parent may be able to provide information regarding a change in circumstances which may justify a change in payments. Such information may be considered by a judge or magistrate who may determine that a reduced or changed set of payments may be appropriate.

Similarly, the application process may also provide an input mechanism for a custodial parent to indicate why an increase or other change in payments may be appropriate.

When an application process includes a request for changing the payments made to the custodial parent and the non-custodial parent's obligation to pay, both parties may be given the opportunity to provide evidence and explanation supporting their argument. Such evidence might be in electronic form and part of an electronic file.

Once underwriting has determined that financing is appropriate and that the financing entity will guarantee the future payments, including back support if appropriate, the changes may be submitted to a court for approval. In many cases, the system may generate the appropriate paperwork for the court to review and sign. The court may issue a new or modified court order that obligates the financing entity to pay all future payments and, in exchange, the payments made by the non-custodial parent will be transferred to the financing entity.

After receiving a court order to modify the child support arrangement with the financing, a financial entity may begin managing the child support arrangement. The financial entity may pay any back support or missing payments to a custodial parent. In some cases, may repay any government entity amounts that may have been advanced through government assistance programs to the custodial parent.

The non-custodial parent's payments may be directed to the financial entity, which may be authorized through an assignment by the custodial parent. If the non-custodial parent may miss a payment or be delinquent, the financial institution may re-calculate the amount of money owed and adjust the future payment schedule. In cases where the custodial parent becomes severely delinquent, the financial institution may alert one or more governmental agencies to assist in collecting child support payments from the non-custodial parent.

Throughout this specification and claims, reference is made to a “custodial parent” and a “non-custodial parent.” In many cases, parents may share custody, but the term “non-custodial parent” is used merely to denote the parent who has an obligation to pay the “custodial parent” in a child support situation.

In the specification and claims, references to “a processor” include multiple processors. In some cases, a process that may be performed by “a processor” may be actually performed by multiple processors on the same device or on different devices. For the purposes of this specification and claims, any reference to “a processor” shall include multiple processors, which may be on the same device or different devices, unless expressly specified otherwise.

Computer storage media includes volatile and nonvolatile, removable and non-removable media implemented in any method or technology for storage of information such as computer readable instructions, data structures, program modules or other data. Computer storage media includes, but is not limited to, RAM, ROM, EEPROM, flash memory or other memory technology, CD-ROM, digital versatile disks (DVD) or other optical storage, magnetic cassettes, magnetic tape, magnetic disk storage or other magnetic storage devices, or any other medium which can be used to store the desired information and which can accessed by an instruction execution system. Note that the computer-usable or computer-readable medium could be paper or another suitable medium upon which the program is printed, as the program can be electronically captured, via, for instance, optical scanning of the paper or other medium, then compiled, interpreted, of otherwise processed in a suitable manner, if necessary, and then stored in a computer memory.

FIG. 1is a diagram illustration of an example embodiment100showing a financing system for child support payments. Following a dissolution of marriage or civil partnership, or for any other court-ordered child support arrangement, a non-custodial parent102may be obligated to pay a custodial parent104who may be the primary caregiver of a child106. In a typical arrangement, the payments may be monthly, bi-weekly, twice-monthly, quarterly, seasonal, or have some other cadence.

Some child support arrangements are facilitated by a state agency108. Many states have a “child support services agency” or other similar agency whose mission is to assist children. One part of the mission may be to collect and distribute child support payments. The agency108may collect payments from the non-custodial parent102and may forward those payments to the custodial parent104. The agency108may also have strong mechanisms for collecting child support payments, including garnishment of wages or other financial assets, denial of licensure or other government services, even arrest and imprisonment for failure to pay child support payments.

A system for financing the child support payments may begin with an application and underwriting system110, which may collect information about the case from the parents and obtain an updated or modified court order from a court112. When the court order may be issued, a financing service114may provide guaranteed funds116that may guarantee the future payments to the custodial parent104. The financing service114may create a loan that may pay any back support or owed monies to the custodial parent104.

The financing service114may allow the non-custodial parent102to meet their court-ordered obligations over a longer period of time by financing their child support payments. Because the custodial parent104may have guaranteed funds116, future payments may be made on time, regardless if the non-custodial parent102is faithful in making payments. The financing service114may make up the difference by loaning the money to the non-custodial parent102.

The diagram ofFIG. 2illustrates functional components of a system. In some cases, the component may be a hardware component, a software component, or a combination of hardware and software. Some of the components may be application level software, while other components may be execution environment level components. In some cases, the connection of one component to another may be a close connection where two or more components are operating on a single hardware platform. In other cases, the connections may be made over network connections spanning long distances. Each embodiment may use different hardware, software, and interconnection architectures to achieve the functions described.

Embodiment200illustrates a system202that may have a hardware platform204and various software components. The system202as illustrated represents a conventional computing device, although other embodiments may have different configurations, architectures, or components.

The hardware platform204may include a processor208, random access memory210, and nonvolatile storage212. The hardware platform204may also include a user interface214and network interface216.

The random access memory210may be storage that contains data objects and executable code that can be quickly accessed by the processors208. In many embodiments, the random access memory210may have a high-speed bus connecting the memory210to the processors208.

The nonvolatile storage212may be storage that persists after the system202is shut down. The nonvolatile storage212may be any type of storage device, including hard disk, solid state memory devices, magnetic tape, optical storage, or other type of storage. The nonvolatile storage212may be read only or read/write capable. In some embodiments, the nonvolatile storage212may be cloud based, network storage, or other storage that may be accessed over a network connection.

The user interface214may be any type of hardware capable of displaying output and receiving input from a user. In many cases, the output display may be a graphical display monitor, although output devices may include lights and other visual output, audio output, kinetic actuator output, as well as other output devices. Conventional input devices may include keyboards and pointing devices such as a mouse, stylus, trackball, or other pointing device. Other input devices may include various sensors, including biometric input devices, audio and video input devices, and other sensors.

The network interface216may be any type of connection to another computer. In many embodiments, the network interface216may be a wired Ethernet connection. Other embodiments may include wired or wireless connections over various communication protocols.

The software components206may include an operating system218on which various software components and services may operate.

An application and underwriting system220and an accounting management system222may provide the functions of preparing and managing a new financing agreement for child support payments, respectively.

The application and underwriting system220may serve to create an application for financing, obtain the relevant information, and facilitate an updated agreement between the parties, which may be approved by a court.

The accounting management system222may take over once the court order is in place and handle the financial transactions. The accounting management system222may provide current accounting of all transactions, as well as collect missing payments and the like.

A non-custodial parent interface224and custodial parent interface226may be where a parent may begin an application process, provide input to the application, monitor an application going through the process, and manage payments once the financing is in place.

A state or federal agency interface226may be where a state or federal agency may interact with the systems. A state or federal agency may provide evidence of payments or lack of payments, provide input to the application and underwriting processes, as well as monitor and manage payment distribution and collection once the financing is in place.

An expert interface230may be an interface where third parties may provide input to the application process. Such input may be used by the parents, the underwriters, state agencies, the courts, or other parties that may participate in the child support process.

A court interface232may be an interface where a court may interact with the process to receive information prior to adjudication, evaluate and adjudicate a matter, and monitor the progress of the matter after the fact.

A network234may connect the system202to other devices.

A financial processing system236may implement, manage, and report the child support payments. The system may operate on a hardware platform238and may provide periodic and one time payment delivery240as well as collections242. The financial processing system236may distribute funds from guaranteed funds244.

Various user devices246may be used to interact with the system202. The user devices246may be used by the parents, state or federal agencies, experts, courts, or other parties to interact during the application process or during the operational phase of distributing and managing the child support payments. The user devices246may operate on a hardware platform248using a web browser250or other application. In many cases, an authentication system252may provide authentication services to validate the users have permission to perform their interactions with the services.

FIG. 3is a diagram illustration of an embodiment300showing a financing process for child support. During the application process312, several parties may be involved. The parties may include a non-custodial parent302, a custodial parent304who has the child306for which support payments are mandated, one or more state or federal agencies308, as well as various experts310.

During the application process312, information about the situation is gathered and, to the extent possible, agreement may be reached between the parties. In cases where agreement is not reached, a court may adjudicate the differences.

The application process may gather information about the case. The documented evidence may include an existing court order that may have previously defined child support payments. Additional evidence may include payment history, which may be documented by one or both of the parents or by a state agency.

In some cases, one or both of the parents may wish to change the child support payments. For example, a non-custodial parent may have fallen onto hard times and may be ill or unable to find employment. A custodial parent may have increased need for support because the child has specific needs or the custodial parent may not be able to provide. In such cases, the application process312may include mechanisms so that the parties may request changes and provide explanation and evidence supporting the changes. Such requests may be evaluated by various experts310and eventually forwarded to the courts for adjudication or approval.

Some systems may allow attorneys to represent the parents during the application process312. The attorneys may be given access on behalf of their clients, and the attorneys or their staff may be the people interacting with the application process312rather than the parents.

In other use cases, one or both of the parents may be able to manage the application process on their own. Such systems may have simplified user experiences, complete with helpful elements, such as explanations of the options and availability of experts to assist during the application process.

After court approval316, a new court order may be issued that establishes a new or updated child support arrangement. The funding stage318may provide the guaranteed funds for future payments, and the new agreement320may be implemented.

Under the new agreement320, a loan may be originated and disbursed to the custodial payment for delinquent child support322. Some cases may involve a loan and full or partial repayment to government assistance programs324. The funding may provide for ongoing guaranteed payments to the custodial parent326, as well as the mechanisms to collect payments from the non-custodial parent328.

FIG. 4is a diagram illustration of an embodiment400showing components that may be part of an application for financing of child support payments.

The application402may include general information404. General information404may include the court order that established a previous set of child support payments as well as verification of payments made to date and any outstanding, overdue, or delinquent payments. In situations where a government agency has provided assistance to the custodial parent, some such government programs may require full or partial repayment of the assistance when the non-custodial parent pays. During the application process, such amounts may be gathered from the appropriate government agency.

The non-custodial parent406may provide information about themselves. In many cases, the application may include the non-custodial parent's current and past work history, as well as bank statements and other financial disclosures. The financial disclosures may include pay stubs, receipts from their business, W2 forms, tax returns, and other financial disclosures.

The non-custodial parent406may include a request to change the child support arrangements in the application. Such a request may include a narrative or other description of the specific situation, as well as evidence supporting the changes. In some cases, the application process may be simple enough that a layperson may be able to submit a request. In other cases, the application process may involve a caseworker, lawyer, or other professional advocate who may gather and enter the description and evidence of a change request.

Similarly, a custodial parent408may also include a request to change the child support arrangement. In many cases, the custodial parent's situation may change, or the child's needs may have changed. A request for a change may include a narrative description of the request along with evidence supporting the change.

An expert or professional410may have input to the application process. The expert or professional may be a social worker, case worker, counselor, guardian ad litem, teacher, care giver, medical professional, mental health professional, or any other person with knowledge of the family situation. The expert or professional may provide description of the family situation, any changes to the family situation since the previous court order, and any recommendations by the professional.

The application may be sent to a court for evaluation and possible modification of court orders. In situations where both parents consent to the changes and those changes are not unreasonable, a judge or magistrate may approve the changes readily. Where small differences exist, the court may make a ruling using the application alone or may request more information from the parties before making a ruling. Where large difference exist, the court may require a new trial to fully adjudicate the matter.

FIG. 5is a flowchart illustration of an embodiment500showing an application process for financing child support. The actions performed by the applicant502are shown in the first column, the actions performed by the other parent504are shown in the second column, the actions performed by underwriters506are shown in the third column, and actions performed by experts508are shown in the fourth column.

In the method of embodiment500, either parent may initiate an application for child support financing. In one scenario, a custodial parent may be worried about the non-custodial parent's ability to pay consistently, so the custodial parent may wish to have child support financing so that the payments may be reliable and guaranteed, causing that parent to initiate an application. In another scenario, a non-custodial parent may have fallen behind in their payments and apply for child support financing so that they can bring their accounts current and avoid legal ramifications of being behind.

The applicant502may initiate an application in block510to complete or update an application in block512. The application may be sent to underwriting in block514.

Underwriting506may receive the application in block516and may provisionally underwrite the financing in block518, then send the results in block520to the applicant502. The provisional underwriting may approve or deny financing based on the information in the application. In some cases, the underwriting may place conditions or other requirements on one or both parties for the financing.

The application502may receive the underwriting results in block522. If the results are not favorable, or if underwriting requests more information in block524, the process may return to block512where the applicant502may add information to or update the application and resubmit to underwriting.

If the underwriting results are not favorable or if the applicant502does not wish to proceed, the applicant502may abandon the application process.

If the underwriting results are favorable and the applicant502wishes to continue, the applicant502may forward the information to the other parent in block526.

The other parent504may receive the application information in block528and review the application in block530. If the other parent504approves the application as-is in block532, the application may proceed to be filed with the court for modification of orders in block534.

If the other parent504does not approve the application in block532, the other parent504may provide explanation and evidence in block536regarding their situation or disapproval, and may transmit the disapproval in block538

The applicant502may receive the disapproval in block540. If the applicant502chooses to retry the application process in block542, the process may return to block512where the applicant502may modify the application and resubmit.

The applicant502may retry the application process when the two parents are reasonably close to an agreement. In general, courts can be very receptive to a change to child support payments, including financing, when both parties are in agreement. However, when the parties have a disagreement, the application may be flagged for adjudication in block544.

Once flagged for adjudication in block544, the application may be sent to one or more experts508in block546. The experts508may receive the application in block548, review the application in block550, and provide an opinion, evidence, and a recommendation in block552. The results may be transmitted to the parent's attorneys or the court for adjudication in block554.

In the example of embodiment500, the experts are illustrated as being involved after the parents have attempted to come to an agreement but have not agreed. In some circumstances, expert opinions and recommendations may be requested by one of the parents earlier in the process. For example, an applicant502may request an expert opinion and recommendation prior to starting the application process, or the other parent504may request expert opinion and recommendation while considering the first parent's application request.

The process of embodiment500may be facilitated by a computer-based system. Such a system may be a web page, application, or other interface that may allow an applicant502to complete an application. Such systems may guide an applicant502through the application process in several ways. First, the system may evaluate the applicant's answers to questions to make sure the answers are properly filled out and that the proper information may be included.

Such application systems may automate certain data collection processes, such as automatically collecting credit scores, verifying work history, verifying driver's licenses, addresses, and other verifiable information.

Such application systems may also guide the applicants through the application process. In one mode, the guidance may include help videos, frequently asked questions, automated or human assisted chat, voice, or video assistance through the application process, or other information to assist the applicants.

The systems may facilitate the sequencing and communication between the parties. For example, a system may allow one parent to fill out the application, which may be automatically sent to underwriting. The system may have an underwriting interface where a human underwriter may be notified of an application, and the human underwriter may review the information on a computer system for approval, denial, or request other information.

In many cases, underwriting may be fully automated where a computerized underwriting algorithm may approve (or at least provisionally approve) an application subject to later human review. Such algorithmic approval processes may consider the facts submitted by the applicants and any verification performed on those fact, then issue an approval when the application meets the pre-defined guidelines. In some such systems, an application may be underwritten in mere seconds when the appropriate information is available.

A system for child support financing may manage communication between the parents. Once the applicant502has completed their portion of the application process, the system may notify the other parent504of the application and collect information from the other parent504. Such a notification may be through email, SMS/text messaging, or other electronic communication. The other parent504may be authenticated when they establish login credentials to the system, after which they may gain access to the application process.

The system may sequence the steps between different parties, notifying a participant of their next steps and presenting a user interface tailored for that person. Once that person has completed their portion of the process, the system may continue with the next steps.

Some systems may allow the other parent504the opportunity to comment, approve, deny, amend, or otherwise interact with the application process. In some situations, the other parent504may completely ignore the requests and may refuse to participate. In such situations, an application may be forwarded to the court for approval without the other parent's involvement. A situation may happen, for example, when the parents are not on speaking terms or where one parent intentionally attempts to block the other parent's application process, no matter if the application may eventually benefit the other parent.

When one parent may refuse to participate during the application process or when the other parent may actively oppose a child support financing arrangement, a court may impose the arrangement at its discretion.

In some situations, a case worker, social worker, counselor, or other party may initiate a child support financing application. For example, a state employee case worker who may be managing the parent's child support obligation may determine that a child's wellbeing may be affected by a non-custodial parent's ability or willingness to consistently pay their child support payments. The case worker may initiate a child support financing application on behalf of the custodial parent or child, and the non-custodial parent may receive notice that an application has been started. Both the custodial and non-custodial parents may then respond to the application process.

FIG. 6is a flowchart illustration of an embodiment600showing a method for disbursement and collection of child support payments in a financing arrangement.

Embodiment600may illustrate the deployment and collection of funds once a child support financing arrangement may be in place. The new child support financing arrangement may begin with a court order in block602establishing new child support payment terms.

The funds for any loans may be provided in block604. The funds may be guaranteed in block604by a financing entity. In some cases, the funds may be placed in a trust account to fully fund any back support that may be owed as well as future payments to be made to the non-custodial parent. In other cases, funds may be guaranteed or pledged on a contractual basis to fund future payments.

Monies that may be owed to the custodial parent may be paid in block606. These monies may be back support that a non-custodial parent has missed intentionally or unintentionally, but may be owed to the custodial parent. Some or all of the missing payments may be paid out to the custodial parent. In some cases, the custodial parent may receive the payments in a lump sum, while in other cases, the back payments may be made over a period of time.

Some cases may have an obligation to repay government assistance programs which may have provided support to a custodial parent during periods where a non-custodial parent has failed in their support obligation. Such a repayment obligation may be intended to be made when a non-custodial parent regains their financial footing, but in a child support financing arrangement, some or all of that obligation may be repaid through the loan made during the financing arrangement.

The loans of blocks604,606, and608may be advanced by a financing entity and may be owed by the non-custodial parent. As part of the financing arrangement, the non-custodial parent may agree to repayment terms that may extend past their original obligation.

For example, if a non-custodial parent was behind 12 months on their original obligation, a child support financing arrangement may create a loan for the 12 months of arrears or deficiency, then pay out the owed amount to the custodial parent or government agency. Assuming the non-custodial parent's period payment amount remains the same, the non-custodial parent's payments may extend 12 months or more after the original payments would have ended. The additional payments would be used for paying the loan, interest, fees, and other costs associated with the financing.

In such a repayment arrangement, the non-custodial parent may pay more money than they were originally obligated, but the financing arrangement may allow a longer period or more flexibility in repayment terms.

A guarantee may be made in block610for future payments to the custodial parent. The guarantee may be in the form of cash placed in a trust account for the full amount of future payments. In other cases, different types of guarantees or obligations may be made to ensure future payments, such as funding an annuity or purchasing insurance to guarantee all or at least a portion of the future payments. The recurring payments may be setup and automated in block612to make the future payments.

In a typical situation, an amortization schedule may be created where the non-custodial parent's payments may be defined. The amortization schedule may include paying off a loan that may have been advanced to cover previous missed payments.

The collection mechanism for collecting from the non-custodial parent may be configured in block614. A typical collection mechanism may be payroll withholding or garnishments, which may be configured with the non-custodial parent's employer in block616. When a non-custodial parent may be self-employed or may not receive a conventional paycheck with automatic withholding, other systems may be put in place to collect payments.

Payments may be received in block618. If a payment is not missed in block620, the process may continue receiving payments in block618.

If a payment is missed or is otherwise short or delinquent in block620, the amount owed by the non-custodial parent may be updated in block622and principal and interest payments may be recalculated in block624.

In some arrangements, a non-custodial parent may be allowed to defer payments or adjust their payments. For example, a child support financing arrangement may permit some number of late payments on a line of credit arrangement where the non-custodial parent may repay the owed amounts at a later date. Such an arrangement may be made when the non-custodial parent has a high credit score, where the parent works on a seasonal or variable income industry, or for some other considerations.

Some financing arrangements may be configured so that payments may be missed when the non-custodial parent shows evidence of unemployment, incarceration, illness, or other conditions. In many financing arrangements, the amount and conditions for missing payments may be defined by contract.

If the amount of missed payments may become excessive in block626, the state may be notified in block628that the non-custodial parent has not met their court-ordered payment schedule. The state may enforce the court order as appropriate to collect the monies owed by the non-custodial parent.