Pursuant to 750 ILCS 45/20.7 and 5/505(b) interest accrues on child support obligations that are not paid. A support obligation or any portion of a support obligation, when becomes due, and remains unpaid for 30 days or more shall accrue simple interest at the rate of 9% per annum. An order for support entered or modified on or after January 1, 2002 shall contain a statement that a support obligation required under the order, or any portion of a support obligation required under the order, that becomes due and remains unpaid for 30 days or more shall accrue such interest. However, failing to include this provision in an order does not affect the validity of the order of interest.
The big problem is how to properly calculate the interest on unpaid child support. Child support is NOT calculated via the lump sum approach, or also known as taking the lump sum and multiplying by 9%. The interest is calculated by the per diem interest approach, by multiplying the installment by 9% then dividing that figure by 12 for the number of months and 30 for the number of days per month resulting with an amount of interest owed each day.
To complicate matters worse, how do you apply payments made to reduce a delinquency/arrearage? The application process is derived from the maxims stated earlier. You need to determine which payments were never paid and the interest owed for each and then apply the available funds. The difficult part is when there have been missed payments and payments that were made sporadically. Pursuant to 750 ILCS 45/14(a) and 5/505(d), “any new or existing support order entered by the court under this section shall be deemed to be a series of judgments against the person obligated to pay support there under, each judgment to be in the amount of each payment or installment of support and each sub judgment to be deemed entered as of the date of the corresponding payment or installment becomes due under the terms of the support order.”Therefore, each payment, whether missed or made is its own judgment that needs to be satisfied and further payments need to be applied to previous judgments to calculate the interest properly.
In short, be prepared to spend a significant amount of time calculating the interest. Although time consuming, it will result in the proper calculation of interest and the proper amount of money owed to the client.