Member
wmfriedman
Posts: 5
Registered: ‎06-25-2009
Unable to get Auto loan due to child support arrears.

I need help. My FICO score TU is 663 and I can not get approved for a car loan anywhere!! I tried GMAC, Capitol One, Wachovia, Citi Financial Auto Credit, ARCUSO Credit union, heck Carmax even submitted it to road loans and it was denied. We were going to put down 2,000 cash down.

 

I lost my Job in 2006 and got behind on my child support. $500 bucks a month adds up fast. Child support, plus money for arrears has been taken from my paycheck every two weeks like clockwork since October of 2007. After 2 years of this along with my Stimulus check, and federal and state tax refund checks, I have whittled away the 10,000 arrears to around 6,000.

 

The problem is the State of Texas has nuked my credit report. They show 90+ days late about 41 times. According to them this if for the arrears amount, not current payment, and the only way this will go away is if it is paid off entirely, which will still take 2 to 3 more years.

 

I have offered to send these lenders proof in the form of certified pay records showing child support has been deducted bi-weekly and an official letter from Texas showing I have made payments on time since October 2007, but they will have none of it.

 

My wife and I share a 2003 Hyundai with 150,000 miles and we need another car. Wife's FICO is under 600 so don't ask!! LOL.

Valued Contributor
usmc58555
Posts: 1,668
Registered: ‎02-18-2009
Re: Unable to get Auto loan due to child support arrears.

Child support reporting in arrears is a deal killer1 for any financial entity. Why? Simple- if you aren't paying your kids you are going to have your pay garnished hugely...and there is a high chance you can/will go to jail- so you won't be able to pay anything off.

 

Sorry

 

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Moderator Emerita
LilMirth
Posts: 3,091
Registered: ‎08-09-2008
Re: Unable to get Auto loan due to child support arrears.

If getting your child support paid up-to-date isn't an option at this time, perhaps you can work on your wife's credit, getting her to a place where she can obtain a car loan. I know this doesn't give you a quick fix, and I'm sorry that I don't have better advice, but it may be your best bet.

 

The other option, which may be the most prudent if you absolutely must have another car at this time, is to take the 2k, save a little more, and get a reliable used car until you can get your child support paid in full.

 

And the final option, obviously, is to just keep sharing (if it's at all a possibility) until you can get your child support paid up to date. That 2k that you've got for a down payment, and the money that you'd have been making to a lender for a new car payment would make a serious dent in that 6k that you're still behind.

 

Good luck. I really hope that you can find a solution that works for you and your family.

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Valued Contributor
GregB
Posts: 1,669
Registered: ‎05-24-2007
Re: Unable to get Auto loan due to child support arrears.

Each state is different but: You might have been able to get your Child Support Order reduced when you lost your job. I don't know if it is too late now. Will they go back and reduce past support? You might want to check it out.

For best result on your FICO this probably should have been worked out before the State of Texas got involved in collections.

Member
wmfriedman
Posts: 5
Registered: ‎06-25-2009
Re: Unable to get Auto loan due to child support arrears.
[ Edited ]

Thanks everybody for the responses.

 

The Texas OAG will slam your credit if you are 1 payement behind. If you don't get caught up quickly..you get the 30, 60 90 days late. Don't get it caught up and you get the 90 days late slammed on your credit report every month till your balance is zero.

 

I did notify them when I lost my job....They didn't care I was unumployed and my monthly payment would keep adding up. We were living on my wife's paycheck only...and barely paying out bills.....living on beenie weeines..and shopping at goodwill.

 

Texas OAG has the attitude...we appeciate you paying your child support promptly since October 2007, and paying an extra 100.00 a month, and we are happy to take you tax refunds, state, federal and any stimulus refund, but your credit stays in the toilet till your balance is zero.PS no passport till it's under $2,500 either.

 

Soooo factoring in if I pay another 100 a month, tax refunds and any stimulus check if any our good president sends, I should be clear in 2 to 3 years. 

 

Sadly since I am already paying an extra hundred for arrears....I may have to 100.00 away each month and when wife gets her tax refund next year, if her credit is above 650 she will have to get the car solo.

Message Edited by wmfriedman on 06-28-2009 07:09 AM
Valued Contributor
GregB
Posts: 1,669
Registered: ‎05-24-2007
Re: Unable to get Auto loan due to child support arrears.

I wasn't completely clear in my original answer. Bear in mind each state has different laws. There are two different governement agencies involved here.

 

The one that seems to be causing the lates is Texas OAG. They are enforcing the payment. It does make sense that they wouldn't care that you lost your job just as a mortgage company wants their payment even if you lost your job.

 

The other agency is the one that made the order to pay, which is a court. If it is the original order, it came as part of a divorce or other legal action. Each parent's income, expenses, custody was determined and a payment was calculated. Those are always (I think) able to be modified as those factors change. You and the other parent can agree to change it or go back and have the court make a new order. Even if attorneys were involved in a divorce, it frequently makes sense to skip that for a modification as the issues are normally much simpler. EG: My income was X dollars, now it is Y. Or: I had the kids X percent, now I have them Y.

 

The problem I see here is that when you lose your job, you expect to get another one soon. Running back to court immediately makes it look like you don't expect to get another job soon. That could be taken as you aren't trying although you could just be in an area where there aren't any jobs available. It would be FAR better to get another job instantly. That could be a job that pays minimum wage or far less than your previous job. Get the best job available, but get it NOW. There is nothing that says you can't be looking for a better job.

 

This just makes it more obvious that we all need a savings account to tide us through a tough period when something changes like losing a job.

Valued Member
soccrstar
Posts: 47
Registered: ‎02-01-2009
Re: Unable to get Auto loan due to child support arrears.
SO there's a certain amount that you have to pay total?

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Valued Contributor
usmc58555
Posts: 1,668
Registered: ‎02-18-2009
Re: Unable to get Auto loan due to child support arrears.
[ Edited ]

At risk of sounding callous.

 

You are only 6K in arrears.


Not a huge amount, but still not the cost of a value meal.

 

It will continue holding you back for awhile.


I would take a good hard look at you and your spouses finances, see where the two of you can trim and cut and try to come up with MORE then an extra 100 a month. If you guys sacrafice and can get that up to 500 a month, you can get it cleared up quickly and start living your life better.

Message Edited by usmc58555 on 06-28-2009 05:33 PM
Signature line begins:
Credit is not a right, but a business transaction, one that takes into account risk, and charges accordingly based on that risk.
Your credit score is an aspect of your credit profile. Important? yes but just an aspect. Contributing/supplemental information determines the finer point of the deal. Ask any question, respect me not to get mad if the answer is not the affirmation you are looking for,
Established Member
Lance66
Posts: 51
Registered: ‎07-01-2008
Re: Unable to get Auto loan due to child support arrears.

I can feel your pain.  Many years ago, I was in a similar situation to yours.  I got behind in my child support payments.  After I got back on track... I wrote the county office that was responsible for collecting the support and reporting on my credit report negatively.  They did change my status to paying currently which was

great for my credit report.  Once I was finished paying child support.. or rather.. I thought I was... I had to continue paying on my arrears for two  more years and once that was done... it showed paid in full on the credit report ... or something to that affect.  I got a lot of car loans through those years... even with the child

support thing.. and I had state tax lien on there for many years until that was paid.  I guess they are much more strict now than they were back then.  I could always explain my way out of it... write a letter to the lender, etc.

It didn't really hold me back much.  I would try and get the State of Texas to help you out... it is worth a try.

You might reach the right person who will be willing to help you out.  Get to the department who handles the

reporting to the credit bureaus.. that is what I did.  Good luck! 

Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
Re: Unable to get Auto loan due to child support arrears.

GregB wrote:

I wasn't completely clear in my original answer. Bear in mind each state has different laws. There are two different governement agencies involved here.

 

The one that seems to be causing the lates is Texas OAG. They are enforcing the payment. It does make sense that they wouldn't care that you lost your job just as a mortgage company wants their payment even if you lost your job.

 

The other agency is the one that made the order to pay, which is a court. If it is the original order, it came as part of a divorce or other legal action. Each parent's income, expenses, custody was determined and a payment was calculated. Those are always (I think) able to be modified as those factors change. You and the other parent can agree to change it or go back and have the court make a new order. Even if attorneys were involved in a divorce, it frequently makes sense to skip that for a modification as the issues are normally much simpler. EG: My income was X dollars, now it is Y. Or: I had the kids X percent, now I have them Y.

 

The problem I see here is that when you lose your job, you expect to get another one soon. Running back to court immediately makes it look like you don't expect to get another job soon. That could be taken as you aren't trying although you could just be in an area where there aren't any jobs available. It would be FAR better to get another job instantly. That could be a job that pays minimum wage or far less than your previous job. Get the best job available, but get it NOW. There is nothing that says you can't be looking for a better job.

 

This just makes it more obvious that we all need a savings account to tide us through a tough period when something changes like losing a job.


 

This is not completely accurate.  If the wife (ex) and kids are on any type of public assistance for housing, food, medical or other, then the Texas OAG will enforce a child support similar to insurance subrogation.  Texas WILL jail you regardless of your ability to pay.  Your child support will possibly be based upon your income, but there is also a "minimum" per child and age.

 

So, even if ex wife and husband had an agreement for less or to waive, this is moot if the ex wife and kids have filed for ANY public assistance, subsidy or other government help.  The state will subrogate their costs through the husbands child support obligations.

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