Unpaid child support is a serious problems for many families where the child support may be the difference between keeping food on the table or lights on in the home. Enforcing child support in court can be a challenge when the child support obligor hides money and assets, dodges the process server, or truly does not have the income stream to pay child support. There are a wide range of remedies available under the Texas Family Law to enforce child support and recover unpaid child support from financial assets of the obligor. Two of those remedies are child support liens and qualified domestic relations orders (QDRO) which are different types of methods to grab existing financial assets to pay unpaid child support. These two remedies are similar but differ on key aspects. Today’s post will discuss the two remedies and how they can help recover unpaid child support.
Child Support Liens under the Texas Family Code
Child support liens are remedies for child support enforcement under the Texas Family Code that allows the obligee to freeze the assets of the obligor. The liens arise when a court renders a monetary judgment for unpaid child support. A party with a judgment sends notice of the child support lien to county clerks (for real property) and holders of other assets of the obligor, like financial institutions, so they cannot transfer or release the assets of the obligor.
The lien by itself does not get the unpaid child support paid. However, when financial assets are involved the obligee can obtain a levy that orders the financial institution to liquidate the financial assets in its possession that belong to the obligor and pay them to the obligee. Payment under the levy is nearly immediate. It is critical to understand that the lien must be followed by a levy to get funds paid out.
Child Support QDROs in Texas
QDROs are a special kind of order that apply only to certain types of employer-sponsored retirement plans. QDROs are complicated issues because they involve a complex federal law that govern these retirement plans–ERISA. ERISA generally prohibits a retirement plan administrator from distributing benefits from the plan to anybody who is not the plan participant (typically the employee) or in any manner not allowed by the plan rules.
One key exception under ERISA is for a QDRO. The QDRO must issue under a state’s domestic relations law (like the Texas Family Code) for the purpose of awarding part of a benefit in the plan to the participant, spouse, former spouse, or child of the participant. The most common use for QDROs is to divide retirement plan benefits in a divorce as part of the property division. However, there are other uses for QDROs including payment of current or past due child support.
An important aspect of child support QDROs is that the QDRO cannot change the plan rules to permit a distribution. For defined contribution plans like 401k plans this is usually not a problem. For defined benefit pension plans this can be more of a problem because those plans typically have numerous restrictions on the manner and timing of payments. So depending upon the plan rules the QDRO may not always be an effective remedy to get child support paid immediately.
General Tips on When to Use One or the Other in Dallas-Fort Worth
Every child support enforcement is different and finding assets to pay the unpaid child support is often half the battle. However, there are some general rules that apply to using QDROs and liens on financial assets. QDROs have limited scope because they only apply to retirement plans and typically only employer-sponsored plans provided by private employers. Some government employers also use QDROs under other laws. QDROs are the most effective way to reach retirement plan assets. They can pay out on the unpaid child support as soon as the plan allows. That is true even if the obligor wants to stay in the plan. However, QDROs are only useful if you can find the plans. There are no blanket QDROs.
Liens on the other hand can be sent out blindly in a blanket manner and attach to anything they find. Typically child support lien notices can go out to all financial institutions. To obtain a levy you need to know what financial institutions have what assets. Even if you cannot find the assets the lien notices can be beneficial because they will block distributions from accounts until the financial institution learns of the release,. The obligor will have to find you to take care of that.
When a child support lien under the Texas Family Code is really a QDRO
Child support liens apply to retirement plans where QDROs could apply. A true lien will not force a distribution from the plan. It will freeze distributions and keep the money locked until the obligor satisfies the judgment. Sometimes child support liens are actually QDROs and will force a distribution but a true lien will only freeze funds. A QDRO could pay out the unpaid child support behind the lien and satisfy the judgment.
If you are seeking child support enforcement for unpaid child support then you should work with a divorce attorney. The process and remedies available are procedurally technical. A wrong procedural move can defeat your opportunities to recover unpaid child support.