Separated parents could be denied credit if they don’t pay child maintenance

Under new Government plans, separated parents who refuse to pay child maintenance could be declined credit as a result.

From next March, arrears built up in the child maintenance system could have the same effect on a non-payer’s credit score as other debts which have not been paid.

If you have a weak credit rating as a result of defaulting on payments it can mean you are refused financial credit in the form of personal loans, mortgages, credit cards, hire purchase finance arrangements and even mobile phone contracts.

Now, under the new plans, the Child Maintenance Service and the Child Support Agency will be given powers to start sharing certain information from their clients’ payment records with credit reference agencies. This data would then be available to financial firms to help them decide whether they want to offer someone credit at all, or whether to limit the credit they allow. Firms could also charge a higher rate of interest on credit they do give, as someone with a poor credit history is seen as higher risk.

The financial information will only be shared when a liability order has been made against someone for not paying maintenance. Liability orders are used as a last resort after all other efforts to encourage payment have been made.

Child Maintenance Minister Steve Webb said: 'For too long, a minority of absent parents have got away with failing to pay maintenance, leaving families without that financial support. This Government is determined to take action to tackle this kind of irresponsible behaviour and support families. 'I would hope that we see this power used very little, because the deterrent effect of a possible negative mark on a person’s credit rating will convince those who have previously failed to pay towards their children’s upbringing to do the right thing.'

The Child Maintenance Service was introduced in 2012 and it will eventually replace the Child Support Agency, which is gradually closing its cases over the next three years. If you’d like more information on divorce, children and finances, please contact family law solicitor James Haworth at Lawson-West Leicester on 0116 212 1000.

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