Orange County Ca Bankruptcy Proceedings

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					Child Support Directors Association



California’s Child Support
         Program
     Family Law Bar Training
           October 4, 2010
       Orange County, California
          Life of a Case

•   Opening a Case
•   Establishing a Court Order
•   Enforcing a Court Order
•   Closing a Case
        Case Opening

• Sources
  – Welfare referrals from Social Services
  – Application (non welfare individual)
  – Petition from other jurisdiction (other
    State or Country)
• Regulations require that the Local
  Child Support Agency (LCSA) create
  a case within 20 calendar days
Summons and Complaint

• S&C package generated
• S&C documents filed with the court
• LCSA local early intervention practice:
  Letter sent to the Non-Custodial
  Parent (NCP)/Respondent
• NCP/Respondent served with S&C
     Response to S&C

The LCSA case will proceed based on
NCP/Respondent’s response:
   Enter a stipulation in the LCSA office
   • If agreement reached, stipulated judgment will be filed
     with the court
   • May include stipulation for genetic testing
   File an Answer
   • LCSA will file a notice of Motion for Judgment
   Do nothing
   • LCSA will request the court to enter a default judgment
        Relief Sought

• Orders Requested
  – Parentage
  – Child Support
  – Health Insurance, including payment of
    share of uncovered costs
  – Child Care, if requested by custodial
    parent
    Basic Enforcement After
           Judgment

• Once a judgment has been obtained,
  the LCSA will send out an
  administrative wage assignment
  package to NCP’s employer to collect
  support
  – Order/Notice to Withhold Income for
    Child Support
  – National Medical Support Notice (NMSN)
     Enforcement Tools
• If the NCP pays late or fails to pay
  court ordered child support, the LCSA
  has several enforcement tools to
  collect child support including:
  – Credit Reporting
  – Passport Denial
  – Property Liens
  – License Suspension
  – Income Tax Refund Intercepts
Other Enforcement Tools

• Disability Insurance Benefit Intercept
• Financial Institution Data Match
  (FIDM)
• Lottery Intercept
• Unemployment Insurance Benefit
  Intercept System
• Workers’ Compensation Appeals
  Board Match System
         Case Closure

• If the LCSAs case qualifies for closure:
  – Child support services will no longer be
    provided
  – All governmental enforcement will terminate
  – Support order remains in effect
  – Any arrearages continue to accrue interest,
    until paid in full

  Note: The Custodial Parent (CP) can reopen
   case if child has not reached age of majority
          Closing Criteria

• Non welfare CP requests case closure and
  there are no assigned arrears
• NCP deceased and has no estate
• Initiating jurisdiction requests closure
• The LCSA cannot locate NCP and/or NCP’s
  assets
  – Efforts to locate must be made over a period of
    three years if sufficient information is available for
    an automated locate effort
  – Efforts to locate must be made over a period of
    one year when there is insufficient information for
    an automated locate effort.
         Closing Criteria

• Paternity cannot be established
• NCP institutionalized and has no ability to
  pay
• NCP permanently disabled and has no
  ability to pay
• NCP incarcerated with no chance for parole
  NCP and CP reconciled and no welfare
  arrears owed
• Finding of good cause by Social Services
          Case Closure

•Continued enforcement not in the best
interest of the child as determined by Foster
Care
•Case opened for ―locate only‖ services
•All support obligations paid in full
    Establishment Overview

•   Case Opening
•   Paternity
•   Child Support
•   Medical Support
       Sources of Cases

• Application requesting Local Child
  Support Agency (LCSA) services
• Request from other jurisdiction (other
  State or Country)
• Referral from Social Services Agency
       Case Assessment

• Existing Order
  – Within the county
  – Outside the county
     • Registration of other county California order or of other
       Jurisdiction’s order
• No Existing Order
  – The LCSA files S&C and Proposed Judgment
     • Family Code Sections 17400, 17404
  – Service on Respondent
   Avenues To Judgment

• Enter into a stipulation in the LCSA office
• File Answer
   – Admits or denies parentage
   – LCSA files Motion for Judgment
   – Court-Ordered Judgment
• Default based upon proposed judgment
   – Family Code Section 17430
    Judgment by Default

• If no answer or other responsive
  pleading is filed within 30 days of
  service, Respondent is defaulted and
  Proposed Judgment becomes effective
  as of the first day of the month
  following the filing of the complaint.
  – Family Code Section 17400 (d)(3)
       Meet and Confer

• Pro Per Respondent can visit any
  LCSA office to discuss case
• Guideline calculation will be prepared
  and Respondent has opportunity to
  stipulate
    Motion for Judgment

• Orders Requested
  – Parentage
  – Child Support
  – Health Insurance
Paternity Marital Presumption

• Marital Presumption (FC 7540)
  – Presumption conclusive on day after
    child reaches two years of age
  – Presumption rebuttable until day child
    reaches two years of age
Paternity Opportunity Program

• Voluntary Declaration of Paternity (POP)
  – Before the unmarried mother leaves the hospital,
    after giving birth, the health care provider shall
    provide a voluntary declaration of paternity along
    with written advisement materials.
  – Staff in the hospital shall witness the parents’
    signature and shall forward the declaration to the
    State Department of Child Support Services
  – Family Code Section 7570 -7577
 Paternity Opportunity Program

• Written materials advises:
  – That a signed (POP) declaration filed with State
    legally establishes paternity
  – Of the legal rights and obligations of both parents
    and the child that result from the establishment of
    paternity
  – Of an alleged father’s constitutional rights to have
    issue of paternity decided by a court
  – That by signing the (POP) declaration, the father
    is waiving his constitutional rights with respect to
    the issue of paternity
Set Aside of POP Declaration

• Court may set aside the POP declaration
  based upon genetic test exclusion, unless
  denial of motion to set aside is in the best
  interest of the child (taking into consideration
  FC 7575)
   – Age of child
   – Length of time since the execution of declaration
   – Nature, duration, and quality of any relationship
     between the man and the child
   Set Aside of POP Declaration
               Con’t

• Benefit to the child in establishing the
  biological parentage of the child
• Whether the conduct of the man who
  signed the declaration has impaired the
  ability to ascertain the identity of the
  biological father.
 Paternity Genetic Testing

• If no legal presumption applies or
  voluntary declaration exists, the LCSA
  will arrange for genetic testing if
  requested
• LCSA will schedule appointment and
  pay for testing
Guideline Child Support

• Child Support
  – Public Policy
  – Guideline Formula
  – Rebuttable Presumption
         Public Policy

• Child Support
  – Public Policy Considerations (FC 4053)
    • Parent’s first and principal obligation is to
      minor child
    • Minor child should share in the standard of
      living of both parents
             Gross Income
• Income (FC 4058)
  – Annual Gross Income derived from whatever
    source including but not limited to:
     •   Salary
     •   Overtime
     •   Commission
     •   Bonus
     •   Workers’ Compensation
     •   Unemployment benefits
     •   Disability Benefits
     •   Social Security Benefits
     •   Seasonal or fluctuating income
     •   Self Employment income
       Proof of Income

• Establishing Income
  – Completed Income and Expense
    Declaration
  – Automated information from EDD and the
    New Hire Directory
  – Information from the CP
  – Presumption of Income
Income – Earning Capacity

• Child Support
  – Earning Capacity
    • Court may consider earning capacity of parent
      in lieu of actual income pursuant to Marriage
      of Regnery (1989) 214 Cal.App.3d 1367
    • Does not require a showing of bad faith
       – IRMO Padilla (1995) 38 Cal App 4th 1212
   Support & Hardships

• Child Support Hardships (FC 4070 -
  4073)
  – Extraordinary health expenses
  – Uninsured catastrophic losses
  – CP’s or NCP’s other natural or adopted
    minor children living with CP or NCP
  Support & Deductions

• Establishing Deductions (FC 4059)
  – Produce credible, admissible
    documentation of deductions, such as:
    •   Work related expenses
    •   Payment of other child support
    •   Hardship minor children, and
    •   Health insurance premiums
  Rebuttable Presumption

• Rebuttable Presumption (FC 4057)
  – Guideline amount is presumed to be the
    correct amount of child support to be
    ordered
  – The court may deviate from the
    guidelines, but must cite the reasons for
    doing so either in writing or on the record
     Support & Visitation

• Visitation
  – Based on actual visitation regardless of
    court order
  – Duty to support minor child is unaffected
    by CP’s failure or refusal to implement
    visitation
  – Remedy is to file action in family court
  Commencement Date

• Commencement date (FC 4009)
  – Initial orders may be retroactive to date of filing
    of S&C so long as Respondent was served
    within 90 days of filing of S&C
  – If the Respondent was not served within 90
    days and the court finds that the Respondent
    was not intentionally evading service, support
    may start no earlier than the date of service of
    the S&C
   Commencement Date

• Commencement date (FC 17400 (d)(2)
  – In IV-D judgments entered by default, the
    support order shall commence the first
    day of the month following the filing of the
    complaint
  Spousal/Family Support

• Spousal Support
  – The LCSA does not establish spousal
    support or family support orders , but it will
    enforce orders for spousal or family
    support when appropriate.
      Federal Mandate

• Federal Mandate (45 CFR §303.6)
  – Federal regulations require IV-D agency
    to identify a delinquency on the date it
    occurs
  – Delinquency defined as the failure to
    make a payment equal to one month’s
    support obligation
  – Once identified IV-D agency required to
    act
   Enforcement Defined

• Collections
• Enforcement Defined
  – Broadly defined under both federal and
    state law (45 CFR §303.6; FC §17400)
  – Includes:
    • Obtaining initial order for support
    • Use of locate, intercepts and notification
      systems for collecting support
Earnings Assignment Order

• Earnings Assignment Order (EAO) (FC
  §5235)
  – Commonly referred to as a ―wage
    assignment‖
  – Used to collect current support and
    arrears from obligor’s income or earnings
    • Earnings broadly defined --FC §5206
    • Employer broadly defined –FC §5210
 Earnings Assignment Order
          Cont’d.

• Required on all support orders issued post
  7/1/09
• Binding on current and future employers
• LCSAs now use Federal IWO (Income
  Withholding Order/Notice for Support
  (formerly ONTW)
  – Administrative FC §5246
  – Same force and effect as Judicial wage
    assignment
EAO and Employer Duties

• Employer Duties (FC §§5233-5235)
  – Deliver and copy statement of rights to
    employee within 10 days of service
  – Commence withholding within 10 days of
    service
  – Forward withheld amount to SDU within
    time frame specified by law
Employer Noncompliance

• Remedies available when employer
  fails to withhold or remit (FC §5241):
  – Employer liable for amount of support not
    withheld or forwarded
  – Civil contempt
  – Electronic payments from bank account
  – 50% penalty
Wage Assignment Stay of Service

 • Stay of Service of EAO (FC §5260)
   – Service of withholding order can be
     stayed if:
     • Court makes a finding of good cause
        –   Child’s best interest
        –   Uninterrupted payments for 12 months
        –   No arrearages
        –   Extraordinary hardship to obligor
     • Alternative arrangement exists for payment
       consistent with Family Code
        – Must be in writing
  EAO and Other Income

• Workers’ Compensation (CCP
  §704.160)
  – May issue wage assignment for 25% of
    temporary disability benefit
  – Applies to arrears and ongoing support
  – Messinese v. SCIF (2004) 69
   Cal.Comp.Cases 480
  – Compare with WCAB Liens pursuant to
    Labor Code §4903(e)
  Social Security Benefits

Social Security Benefits (FC § 4058, FC
§4504, FC §5246)

  •SSDI – 50% of benefits
  •SSI
    •If income is SSI/SSP only – case will be
    closed
    •If income is both SSDI and SSI – 5% of
    SSDI
     Real Property Liens

• Required by 22 CCR §116130:
  – Must be created within 45 days of
    obtaining order
  – Created by recording Notice of Support
    Judgment
    • Notice must be filed in the counties where
       – Obligor resides
       – Obligor’s parents reside
       – Any other county where obligor reasonably
         expected to acquire property
    • Extends to unpaid, matured installments plus
      interest
Real Property Liens Con’t

• Lien remains enforceable until all
  support is paid in full
• Generally, lien priority calculated by
  date of recording – first in time rule
• State regulations specify when an
  Acknowledgement of Satisfaction or a
  Release of Lien will be issued
• Discussed: CCP § 697.310 et seq
  (liens); §724.010 et seq (Satisfactions)
          Other Liens

• Personal Property Liens
  – Writ of Execution more likely (CCP
    §699.010 et seq)
• Lien in pending civil action
  – Including some probate matters
• Workers’ Compensation Liens
  – Date of injury forward
State Licensing Match System
• Requirements (FC §17520):
  – Each month the LCSAs are required to submit list
    of obligors who are not in compliance with
    support obligation
  – The state child support agency consolidates lists
    from all local child support agencies and
    distributes a list to each board responsible for
    regulation of licenses
  – Procedures for issuance or renewal of license
    differs from procedures for license reinstatement
State Licensing Match System
            Con’t

• Policy
  – New Statewide Policy
     • NCP may contact any local child support
       agency for license release
  – If an NCP received notification that his/her
    license will be suspended, the NCP may
    contact DCSS and request a review.
        Passport Denial

• Passport Denial (42 USC §652(k))
  – Effective October 1, 2006, amount of arrears
    required to trigger passport suspension
    decreased from $5,000 to $2,500
  – The LCSAs lacks authority to stipulate release
  – No Constitutional issue
  – Zero tolerance policy
     • Zero arrears
     • One of a few narrow exceptions
  State Intercept Program

• Include
  – State Lottery Intercept
  – Automated PERS Benefits Intercept
  – Child Support Lien Network (CSLN)
  – Tax Refund Intercept Programs
  – Financial Institution Data Match (FIDM)
      Credit Reporting

• On a monthly basis, State DCSS
  forwards account status information to
  the Credit Reporting Agencies
  – Trans Union
  – Equifax
  – Experian/TRW
  – Inovis
  Credit Reporting Con’t

• An NCP is submitted to the State
  Credit Reporting System (CRS) 60
  days after the first payment was due
  (newly established orders) or a case is
  opening with an existing order
• NCP has 30 days to contact the LCSA
  in person, by phone, or letter to
  dispute the arrears or the credit
  reporting action
DCSS Full Collection Program

 • State DCSS Full Collection Program
   (FCP) locates NCP’s assets and
   issues levies if the NCP is in arrears
   and program criteria are met
 • AB 252 amended Revenue and
   Taxation Code §1927.6 to require all
   cases with arrears to be submitted
 • Bank must inform customer of any
   pending levy
DCSS Full Collection Program
           Con’t
• Compliant NCPs are those who are
  complying with the court’s order (including
  an arrears component) or are paying
  pursuant to an Wage assignment that
  includes arrears
  – In compliant cases, the assets search is
    conducted and if assets are found, a levy (Order
    to Withhold) will be issued to the financial
    institution one institution at a time
  – If an NCP is compliant, the first $3,500 of the
    NCP’s assets are exempt from collection without
    any requirement that the compliant NCP files a
    claim of exemption (Family Code Section §
    17453 (j) (2))
           Contempt

• Contempt actions
  – Civil Contempt may be used for
    violations of any court order, such as
    failure to pay child or family support, or
    to perform job contacts as ordered (CCP
    §§ 1209, 1209.5, 1218, 1218.5)
              Contempt

– Criminal contempt, criminal non support or
  criminal abandonment are criminal
  enforcement mechanisms (PC §166(a) (4),
  PC §270, PC §271(a))
 Other Enforcement Tools

• Include:
   – Order for Judgment Debtor Examination
      • Including 3rd Parties
      • Turnover Orders per CCP §708.205
      • No 5th Amendment Claim IRMO Sachs
        (2002) 95 Cal. App. 4th 1144
   – Court ordered job search
      • FC §4505
      • Failure to do basis for contempt
    Other Collection Tools

– Qualified Domestic Relations Orders (QDRO)
  • 29 U.S.C. § 1056(d)(3)
– Intervention in other actions or proceedings
   • Probate proceedings
      –Liens
      –Spendthrift Trusts - Pro. Code §15305
      –Creditor’s Claims
   • Non-judicial foreclosure excess proceeds
Reimbursement of Uncovered
     Medical Expenses

• LCSAs currently enforce collections
  for specific dollar amounts designated
  for medical support in a court order
  (FC §4063)
  – When a parent contacts the LCSA to
    request assistance with the collection of
    unreimbursed medical expenses and a
    specific dollar amount for the expenses
    is not provided on the court order, LCSA
    staff will advise the parent that they must
    file their own motion
            Bankruptcy

• Post October 2005 (P.L. 109-008)
  – New bankruptcy provision
    • Applies to cases filed on or after 10/17/05
  – New terminology – ―domestic support
    obligation‖ (DSO)
    • Debt owed to a spouse, child, parent of a
      child, governmental agency in the nature of
      maintenance, support or alimony.
    • DSO is unequivocally non-dischargeable
        Bankruptcy Con’t
• Following does not violate automatic stay:
  –   Service of Notice/Order to Withhold
  –   License Suspension
  –   Credit Reporting
  –   Tax refund intercept
  –   Maintaining property lien
  –   Establishing paternity and/or support
  –   Modifying support
  –   Passport Reporting
         Bankruptcy Con’t

– Ch. 13 debtor must pay ongoing support and
  his arrears or work a deal with the creditor
– Interference with Plan (Gellington)
– DSO entitled to ―first priority‖—doesn’t mean it
  will get paid first, but it will get paid in a Ch. 13
COMPROMISE OF ARREARS
     PROGRAMS

 • There are two programs to assist
   parents in reducing their child
   support debt:
   – Compromise of Arrears Family
     Reunification Program (FR COAP)

   – Compromise of Arrears Program
     (COAP)
  FR COAP (F.C. 17550)

• Program for parents who owe support
  because welfare benefits were paid
  for a child living with a relative,
  guardian or in foster case.
• Requirements:
  – Child is still a minor and now lives with
    the parent with past-due payments
  – Parent’s net income is less than 250% of
    federal poverty level
      COAP (F.C. 17560)


• Program for parents who owe $501 or
  more for child support for welfare
  payments.
         COAP Criteria

LCSAs determines the noncustodial Parent's
  (NCP's) eligibility for COAP in accordance
  with specific eligibility criteria including the
  following:
• Minimum amount of Permanently Assigned
  Child Support Arrears (up to the
  Unreimbursed Assistance Pool amount)
  owed to the government of at least $501.
• No previous application to participate in
  COAP within one year prior to the date of
  application.
      COAP Criteria con’t

• No rescission of a previous COAP agreement
  within two years prior to the date of
  application.
• No conviction or contempt finding for failure to
  pay child support within six months prior to the
  date of application.
• No intentional failure to pay in anticipation of
  COAP.
• NCP has no ability to pay off all arrears owed,
  including interest, within 3 years of application.
     COAP Criteria Con’t

•Ability to pay current support, arrears owed that are
to be distributed prior to the arrears owed to the
government and the arrears repayment amount as
provided in the compromise agreement within 3 years
from the date of the Agreement from any source (e.g.
gift, loan, income).

•No concealment of any income, assets, or any
reasonably anticipated income or assets, and no
intentional withholding or falsifying of financial
information.
   Statewide Audit Tool

• A web-based child support interest and
  audit tool
• Regularly used in child support cases
• ―Simple Report – All Debt Types‖ is the
  report normally presented in court
Statewide Audit Tool Con’t

• Report displays
  –   All support obligations (child, spousal, medical)
  –   Current charges
  –   Arrears/Adjustments
  –   Interest charges
  –   Amount paid
  –   Principal due
  –   Interest due
         SDU/CCSAS

• SDU Functions
  – Centralized Payment Processing
    • Collections
    • Disbursement
  – DCSS Interface
  – Electronic Help Desk
          SDU/CCSAS

• Critical Activities
  – Provide Employer FL 191 and FL 195
    Forms
  – Courts – Submit FL 191 Forms to DCSS
  – Employers – Submit FL 195 or DCSS
    0116 to SDU
         SDU/CCSAS

• SDU Accepts Payments from Non
  Custodial Parties in the form of:
  – Checks made payable to the SDU
  – Credit Card Payments
  – Electronic Withholding
        SDU/CCSAS

• SDU Payments to Custodial Parties
  – Electronic Payment Options
    • Direct Deposits
    • Electronic Payment Card (EPC)
         SDU/CCSAS

• CA SDU Contact Information
  – WEB – www.casdu.com
  – Fax – (916) 576-8881
  – Toll Free – (866) 325-1010
            Questions?
•   john.cardoza@ventura.org
•   (805-654-5288)
•   lori_cruz@cssd.lacounty.gov
•   (323-889-3410)
•   mreichman@css.ocgov.com
•   (714-347-8028)
•   lrovito@css.ocgov.com
•   (714-347-5927)

				
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