ARREARS MANAGEMENT Presented by Mary Morrow Illinois Division of Child Support Services

Managing Arrears Illinois has a three pronged approach to arrearage management. – Debt Avoidance – Debt Collection – Debt Compromise

Debt Avoidance Through Early Intervention In 2008 Illinois Created an Early Intervention - Delinquency Prevention Unit

DPU Philosophy Communicate early and often with NCP. Work with NCP to remove payment barriers. Establish an expectation:  Pay on time  Pay in full.

Customer Service – Bilingual Toll free DPU number…866-99PREVENT – Available Monday through Friday, 8:00 a.m. to 5:00 p.m. – Calls routed to assigned Delinquency Prevention Specialist – Reporting capability for inbound call volume, wait time, talk time, etc… – Customer feedback survey – Monthly Steering Committee

Two Year Results Show... Early Intervention cases averaged combined collections on 64 % of all cases. Collections are over $1.2 million per month and growing  92.6% of the Admin. Consent Orders  67.1% of Judicial cases  40.3% of the Admin. Default Cases

Exponential Collections Growth

Debt Collection Through Central and Automated Collections

Changing Laws to Increase Collections In October 2007, IL Senate Bill 1035 became law. – Severance pay defined as income for IWO – Authorized Driver’s License Suspension – Authorized work with communities for the purpose of immobilizing vehicles

Driver’s License Revocation Illinois Administrative Driver’s License Project started Jan 2008 TimeAmount Collected First two fiscal years $48.3 Million Total Collected$124.5 Million

Hunting and Fishing License Denial Point of Sale system for DNR in Fall 2007 $753,263 in collections since inception in 2008

Passport Denial Illinois began Passport Denial in 2001 Passport denial is automatic when the Notice of Intent to Pursue Collections is produced with an amount equal to or greater than $2, Collections to date are $8.7 Million

Bank liens – Workman’s Comp, Lawsuits, Real Property Illinois CARU Lien Work Began in 2001 Now averaging $1.33 million/ month

Credit Reporting Agencies (CRAs) Illinois works with major CRAs o Equifax o Experian o Trans Union Prior to reporting the debt the NCP has an opportunity to enter into a payment agreement. So far this year, those agreements represent $332, in payments.

Private Collection Agencies Illinois reinstituted a practice of using private collection agencies to help collect Child Support debt. PCAs receive a percentage of the money they collect for child support based on a complex re-payment scheme. FY PCAs collected over $15 million dollars. Collections for SFY10 - $1,106,918

US Attorney Felony Prosecution Child Support Recovery Act of 1992 (CSRA) allows for the Department of Justice to work with Healthcare and Family Services and the United States Attorney’s offices to prosecute non-custodial parents for failure to pay large amounts of past-due child support. CSRA makes the willful non-payment of child support a federal crime. In SFY 10 Illinois has collected $233,731.38

Deadbeat Parent Website The website was launched in 2003 Illinois published 198 names and photos of hard core non-payers with: – Balance over $5000 – No family violence – Illinois Order (not default) – No voluntary payments in last 90 days

Avoiding Publication on Website Non-custodial parents may avoid having their name published on this list if they: – pay the balance owed within 60 days of the date of the notice, or – enter into an acceptable written agreement with HFS for payment of the balance due. Collections to date: $861,643.31

Offsets – State Fiscal Year 2010 Federal $67,519,472 State $3,786,023 Administrative $1,298,668

Project Clean Slate Debt Compromise Effective January 1, 2007 Illinois Public Act Allowed for past due state assigned obligations to be reduced in exchange for regular Child Support payments to support the family.

Clean Slate Pilot Implementation Target Area – City of Chicago Target Group – 500 NCPs Duration – 7 months

Pilot Results -Distrust -Disconnect -Disbelief

What did we learn? Most participating NCPs did not have income enough to pay their child support. Many targeted NCPs did not trust us. Many non-participating NCPs below the poverty level owed so much money they did not even consider paying and did not bother participating.

What did we do? Reached out to the community. Created an expedited modification review process. Loosened the guidelines for inclusion – current obligation no longer required. Introduced “Project Clean Slate” statewide to NCPs of all cultural and socio-economic backgrounds.

Criteria for Inclusion Signed application Proof of current income Proof past due support owed to the state accrued as a result of - Unemployment -Incarceration -Serious illness -Reason beyond NCP control Signed Payment agreement

Upon Approval... The state’s entire portion of past due support will be conditionally removed from NCP’s balance. Notes are added to the case to account for the balance reduction adjustment.

Payment monitoring Payments must be made according to the agreement on time and in full for six months. Upon successful completion of the six month payment agreement, the past due support owed the state is PERMANENTLY removed from the NCP’s balance. Failure to make the required payments results in – the unpaid balance due to the state to be reposted to the account – the NCP to be barred from participation in the future.

Suspension of Agreement During the six month period the NCP may request a suspension of the agreement. If the suspension is warranted it will be granted for up to one year. The NCP will be allowed to resume the agreement without penalty.

Assessment of Clean Slate 1178 Non Custodial Parents have applied for the program $1,212, in TANF debt was forgiven

Next Steps Revise communication component Move Project Out of Community Relations and into Collections

Homeless Veterans Project Purpose – Work veterans and custodial parents through the Veteran’s Administration and American Bar Association to reduce arrearages accrued by veterans who have no ability to pay. Start date – July 2010

The Reality Serving Chicago area homeless veterans who participate in a federal domicile grant project. Second highest barrier – Child Support – Total arrears $866,439 – State debt forgiven $14,648 – Non assistance debt forgiven $11,341.

Project CHILD Established a Child Support relationship with Prisons and served prisoners in 28 institutions. Received downward modification requests from 797 prisoners – processed 333 cases to date. Child support arrears on these cases totaled $14,409,771.

The Results Monthly combined current support ordered was $218,528 Following downward modification that amount was reduced to $24,340 per month. With almost a 90% reduction, the pilot demonstrates this is a good way to reduce accumulated debt.

So Where Does Big Money Come From? A broad based program that uses a combination of Early Intervention Techniques $22,727, – 23 months Centralized collections $57, – 7 months And advocates for families to create equitable support orders.

Presenter’s Contact Information Mary Morrow Assistant Deputy Administrator Illinois Division of Child Support Services Phone: