There are thousands of divorced parents in South Carolina who are paying or receiving child support. Many of these people may not realize that the payments, meant to go towards food, shelter and clothing for the kids, can have an effect on how lenders view their applications for loans. One commonly encountered example is buying a car. Parents on both ends of the child support spectrum, those making payments and those receiving payments, can find themselves impacted by the child support money.
For the parent who is paying child support, the issue can become critically important if he or she is behind on payments. If you are in arrears then it may be difficult to get approved for a car loan. From the lender's perspective, a parent who is late on payments has a much higher chance of changing jobs, moving around and defaulting on other obligations in an attempt to pay back what they owe to their children. Another way this can affect getting a loan is that such arrearages show up on a credit score, hurting your chance of ultimately getting approved.
What may surprise many is that receiving child support can also be viewed negatively when applying for a loan. For lenders, the problem is that child support payments cannot be garnished. This means that if the person ever falls behind on car payments and has their vehicle repossessed, the lender will not be able to start garnishing child support money to get back what is owed to them. If the bulk of your money comes from child support, you may appear judgment proof to lenders and pose an unattractive risk.
Of course this does not meant that lenders will automatically reject a person based on the fact he or she pays or receives child support. In cases where a person is being paid child support, the chances of being approved for a loan greatly increase if he or she has a job. For the parent who pays and is behind on child support, if an arrangement has been made to get current on payments, bringing documentation to demonstrate the arrangement will usually go a long way to improving your chances of ultimately getting the loan.
If you find yourself facing the prospect of a child support, child custody, visitation, contempt of court, or other family-related issue, you need the help of an experienced South Carolina family law attorney to guide you through the difficult process. You are invited to contact our attorneys at (864) 598-9172 to schedule an appointment to determine how we can assist you through this process.