In December 2009, the Legislature amended MCL 552.605e to permit courts to establish a payment plan for a payer in arrears that is based on both the payer’s ability to pay and the best interests of the child, and MCL 552.605e no longer precludes payers who have been prosecuted for felony nonsupport from filing an arrearage payment plan. The Legislature also modified the procedure to be used to discharge amounts assessed as surcharges. The following are excerpts from the SCAO Memorandum to Family Court Judges and Referees.
The payment plan must require payers to pay a reasonable portion of the amount of the arrearage over a reasonable time period. Under MCL 552.603(d), a party or the friend of the court (FOC) may file a motion (FOC 109) to request that the court establish a payment plan that provides discharge of previously assessed surcharges and allows future surcharges to be waived. The payment plan may address payee-owed arrears, state owed arrears, or both payee- and state-owed arrears. If the court determines by a preponderance of the evidence that the payment plan is in the best interest of the parties and the children, the court must approve the proposed payment plan.
A. Arrearages Owed to a Payee
If the court determines that the payment plan is in the best interest of the parties and the children, and that the arrearages are owed only to the payee, the court must further determine that both of the following conditions apply before the court grants the motion for a payment plan: 1. The payee has consented to entry of the order under circumstances that satisfy the court that the payee is not acting under fear, coercion, or duress; and 2. The payer establishes that the arrearage did not arise from conduct that the payer engaged in exclusively for the purpose of avoiding a support obligation.
B. Arrearages Owed to the State
When the arrearages are owed solely to the state, the court must determine that all of the following conditions apply before the court grants the motion for a repayment plan: 1. The arrearage did not arise from conduct that the payer engaged in exclusively for the purp ose of avoiding payment of a support obligation; 2. In the absence of a court-approved payment plan, the payer has no present ability, and will not have an ability in the foreseeable future, to pay the arrearage; 3. The payment plan will require the payer to pay a reasonable portion of the arrearage over a reasonable period of time in accordance with the payer’s current ability to pay; and 4. The Office of Child Support or its designee has been served with a copy of the motion at least 56 days before the hearing.
B. Additional Requirements
The court order that approves a payment plan may also contain other conditions that a payer must meet, including, but not limited to:
1. Participation in a parenting program;
2. Drug and alcohol counseling;
3. Anger management classes or participation in a batterer intervention program;
4. Participation in a work program;
5. Counseling; or
6. Continued compliance with a current support order.
The court may impose these additional conditions at its discretion. If the court does order additional conditions, the FOC must monitor the payer’s compliance.
IV. Termination of the Arrearage Payment Plan
At any time, any interested party may move to terminate an arrearage payment plan and reinstate the arrearage amount for good cause. Typically, a termination motion will be filed by an actual party to the case, and not the court, the FOC, or a state agency. “Good cause” for termination includes, but is not limited to:
1. The payee has become a recipient of public assistance.
2. The payer has received property in an amount that is sufficient to pay a substantial portion of the amount discharged. Examples include:
a. Lottery proceeds or other winnings;
b. A settlement under an insurance policy;
c. A judgment in a civil action; or
d. An inheritance.
V. Fulfilling the Requirements of an Arrearage Payment Plan
Upon completing the repayment plan, the payer must provide written notice to all “interested parties” and request that the court conduct a hearing to consider the discharge of any remaining arrearage. After notice and hearing, if the court finds that the payer has fully complied with the payment plan, the court shall enter an order that discharges any remaining arrearage. If the court finds that the payer has only substantially complied with the payment plan, the court may enter an order that discharges all or a portion of the remaining arrearage, depending on the circumstances.
Until the payer has fully complied with the payment plan, all mandatory enforcement remedies, such as credit reporting and tax refund offset, shall continue on any arrearage amounts that are subject to the payment plan. MCL 552.605e allows discretionary enforcement remedies to also continue, but a referee, judge, or other person conducting an administrative review hearing on the matter must stop the discretionary enforcement if the payer is currently in compliance with the payment plan.