Children’s interests are always entangled in divorce cases. While the focus is usually on parenting-time and decision-making, the division of financial responsibilities between the parents is also a concern. This includes child support.
Colorado wants to make it as easy as possible to help children in these cases. That’s why the law does not allow a dead-beat parent to hide behind Colorado exemptions or worker’s compensation to avoid paying child support. But single parents who are trying to do the right thing also sometimes have difficulty making ends meet. What can they do to protect support payments they have received for the benefit of their children when creditors come knocking at their own door?
A proper judgment is not generally going to be denied enforcement, so money you deposit in your bank account is not protected except in very narrow exceptions. Therefore, if you put child support payments that you receive in the same bank account where you deposit your paycheck, they will not be protected from a valid garnishment.
To guarantee that child support payments will be protected from garnishment or levy you must deposit such payments into a separate custodial account designated for the benefit of the children. Furthermore, you may only deposit child support funds into this account. Mixing in any other funds negates the exemption.
If you are receiving child support payments, you should consider opening up a custodial account specifically to receive those payments. When you need to use funds from that account for your children, simply move those funds over to your regular checking or savings account, and make payments from there. In no case, however, should you deposit any money into the custodial account that is not received pursuant to a child support order. Talk to your banker about how to set up a custodial account for the benefit of your children.