Debt Compromise Programs: Program Design and Child Support Outcomes – Final Report

This Office of Child Support Enforcement Special Improvement Project was undertaken to examine the features of effective debt compromise programs and to generate empirical information on the outcomes they produce. To identify best practices, the Center for Policy Research (CPR) convened a two-day conference in June 2009 with representatives of eight states that have experience initiating and operating debt compromise programs. In the course of discussing the strengths and limitations of their programs, representatives identified a variety of program features and approaches that they believed would be beneficial for jurisdictions interested in debt compromise. This included recommendations on appropriate program goals, the populations that states should target, effective rules and requirements to realize various types of write-offs, treatment of debt owed to custodial parents, and methods of tracking debt compromise cases.

To generate empirical information on the populations served in actual debt compromise programs, the treatments they receive and the outcomes of their participation as measured by their debt levels and payment behaviors, CPR collected and analyzed information on 688 individuals enrolled in debt compromise programs in four states — California, Illinois, Maryland, Minnesota — and in Washington, D.C. Programs in all five settings accept obligors with current support obligations as well as those who only have arrears-only cases. For arrears-only cases, programs have the capacity to accept lump-sum payments as well as to develop payment plans that involve making monthly arrears payments over a 6 to 36-month period of time. Through a coordinated, cross-site data collection effort, comparable information was obtained on samples of cases that enrolled in the programs.