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Debt Compromise

It can be difficult to catch up on support if a large arrears balance accrues. Unfortunately, sometimes the party paying support has good intentions to pay support but due to circumstances out of their control, end up falling behind. It may be possible to arrange a settlement to clear up an arrears balance. The settlement will generally involve a reduced total in exchange for a lump sum payment. Such an arrangement can be agreed upon between two private parties at any time. There is more gray area when the debt is owed to the State. 

The majority of the states either have a fully implemented debt compromise plan or make a decision on debt compromise proposals on a case-by-case basis. The rationale in even allowing debt compromise is to increase the likelihood the states will receive some of the debt owed as opposed to no payment at all. Pennsylvanian and New Jersey both consider debt compromise plans on a case-by-case basis. In Pennsylvania, by rule of the Supreme Court, any compromise on debt owed to the state must be approved by court order.

Click here to read more on child support.

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