Wisconsin Complies With Federal Requirement
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| Chesnik |
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| Peterson |
Constance M. Chesnik, U.W. 1986, is an attorney with
the Wisconsin Department of Workforce Development. She has advised the
child support program for 16 years and is a frequent lecturer and author
on child support-related issues. She is a member of the state and
national Child Support Enforcement associations.
Lisa A. Petersen, Northern Illinois 1993, practices
with Ticor & Chicago Title Insurance Companies in Waukesha.
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Wisconsin complied with this federal requirement
by enacting 1997 Wisconsin Act 191. The Act created section 49.854 of
the Wisconsin Statutes, which provides, in part:
"If a person obligated to pay support fails to pay any court-ordered
amount of support, that amount becomes a lien in favor of the department
upon all property of the person. The lien becomes effective when the
information is entered in the statewide support lien docket ... and that
docket is delivered to the register of deeds in the county where the
property is located."2
The statute also provides that the Department of Workforce
Development (the department) maintain the statewide support lien docket,
which must be made available to the Register of Deeds and to the county
child support agency of each Wisconsin county and to each state agency
that titles personal property.
Unlike judicial liens, establishing a child support lien under
section 49.854 is purely an administrative process. Liens are docketed
on a statewide electronic Internet-based system maintained by the
department in Madison. The docket is transmitted electronically to
Registers of Deeds offices in each county. Hence, the liens are
effective statewide and not just in a single county. Liens are not
recorded in county records, as the lien is not tied to a particular
piece of property. Title companies must search the child support lien
docket when issuing title insurance, title reports, and abstracts of
title. The lien is docketed by the individual's name, date of birth, and
Social Security number.
The docket also is accessible via a secured Web site on the Internet
at https://www.dwd.state.wi.us/liendocketweb. Access to the Web site
requires the use of an access code, which may be obtained from the
Register of Deeds office or the Bureau of Child Support. Although access
to the child support lien docket is subject to the Open Records law, it
is hoped that, by requiring an access code, the confidential nature of
personal information can be protected by ensuring that only those
individuals with a legitimate need to know are accessing the Web
site.
A child support lien becomes effective when it is docketed. The lien
has priority over all other liens on the property except taxes, special
assessments, purchase money mortgages, construction liens, environmental
liens, liens filed or recorded before the child support lien is
docketed, and any other lien given priority under the law. The lien is
effective for five years from docketing.3
A child support lien does not attach to the marital property interest
of a spouse not in title. Nor does the lien attach to property titled in
a trust, limited liability company, partnership, or corporation of which
the obligor is a beneficiary, member, partner, or shareholder. With
respect to jointly held property, a person other than the child support
obligor who holds a joint interest in property subject to a lien under
section 49.854 may request a hearing to determine the proportion of the
property value that is attributable to his or her net contribution.4
Eligibility criteria for placement on the child support lien docket
are spelled out in the department's administrative rule DWD 43. Only
support-related debts are placed on the docket and only in those cases
receiving services under Title IV-D of the Federal Social Security Act.
County child support agencies provide IV-D services to anyone receiving
public assistance. Additionally, IV-D services are available to anyone
completing an application at the child support agency and paying a
minimal fee. Support-related debts include child support, family
support, and maintenance arrearages, missed payments on past support and
birth expense orders, and missed payments on other medical support
orders. Interest on arrearages and fees are not included on the lien
docket.
Title insurers are discovering that the new child support liens pose
practical problems similar to those presented by judgment liens that
have been docketed. The fact that this is a statewide, as opposed to a
county-based, docketing system likely will increase the incidence of
liens appearing against individuals with common names. A landowner may
wish to deny that he or she is the debtor named on the lien docket.
However, given the contentious nature of child support obligations, it
is unlikely that title insurers will accept affidavits from some sellers
without verifying the seller's identity. In many instances, lenders will
request letter reports in lieu of title insurance. Title companies do
not take name affidavits with letter reports. Those reports neither
purport to insure title nor to protect against defects or liens. They
are merely a report of title. Therefore, common names will show up on
them and it will be the lender's responsibility to verify the names on
the report.
In the short time since the lien docket became operational, local
child support agencies have received several substantial payments. In
one case, a title company discovered a lien when a payer living in
Indiana attempted to sell property in Wisconsin. The county received a
$53,000 payment, which fully satisfied the lien. In many cases, the
notice of lien itself has been sufficient to get some recalcitrant
obligors to pay their child support arrearages.
Title insurers will continue to find child support judgments in the
judgment and lien docket in the clerk's office and they will be raised
as exceptions to title. These docketed judgments will appear in those
cases where the arrearages either are not sufficient to meet the
threshold eligibility for the lien docket, or where a sale is
contemplated on a piece of property in which the equity is insufficient
to satisfy arrearages both on and off the lien docket.
The lien docket is being implemented in phases. The docket went into
production on Oct. 10, 2000. At that time, only obligors with eligible
arrearages in excess of $30,000 were placed on the docket. Roughly 6,000
obligors met this criteria. As of May 5, 2001, the threshold has been
reduced to $15,000 and approximately 18,000 obligors have been affected.
When the lien docket is fully implemented, the threshold eligibility for
placement on the docket will be $2,000. Nearly 90,000 obligors currently
meet that threshold eligibility requirement. If a child support obligor
has multiple cases, the total amount of the arrearages will be combined
into one lien amount.
The lien docket will indicate the county or counties from which the
lien originated and the county child support agency that has been
designated as the contact point for inquiries related to the lien. The
lien screen also will contain the obligor's name and date of birth, the
lien amount, the lien filing date, end date, and end reason. The lien
can end for several reasons. It may expire after five years, it may be
satisfied, or the department may withdraw it. The lien also may be
released as to a specific piece of real estate if the equity in the
property is insufficient to fully satisfy the lien.
A contact agency is identified on the lien docket. That agency is
designated to act on behalf of other child support agencies that have an
interest in a lien, and is responsible for cooperating with closing
agents requesting a release of lien. The closing agent must provide the
contact agency with a proposed closing statement, a property tax
assessment or recent appraisal, and a title report or abstract before a
payment letter for release can be issued. Each local child support
agency has its own policy for estimating fair market value, identifying
fraudulent transfers, and determining the payment amount that will
release the lien.
In addition, each lien will be assigned a unique lien number. The
docket can be searched by that number or by last name. The docket also
can verify the obligor's Social Security number, although the actual
Social Security numbers will not appear on the screen. In addition, a
Social Security number may be entered into the computer, and the
computer will verify whether or not there is a match.
Due Process
Obligors receiving notice of a lien under section 49.854 have the
option of requesting either a court hearing or a financial records and
court order review.5 A request for a financial record
review must be made in writing to the county child support agency
designated on the lien docket within 10 business days of the notice. If
a request is timely made, the child support agency must provide the
obligor with the relevant financial records, which may include the
account history report and any other account records from the period
prior to the implementation of the statewide automated child support
enforcement system. The child support agency also must provide the
obligor with information explaining how to interpret the records and a
form the obligor may use to identify any alleged errors in the
record.
The obligor has 20 days after receiving the records to allege errors.
If the obligor provides a statement of alleged error, the child support
agency must review the records and provide a written determination
within 60 days of the initial review request. If the obligor disagrees
with the agency's determination, he or she may request a court hearing
within five days of the date of determination. The sole issue at that
hearing is mistake of fact.6
If the obligor does not request a financial record review, he or she
may request a hearing within 20 business days of the date of notice.
Satisfaction and Releases
When a lien is paid in full, a satisfaction will appear on the lien
docket for six months. Satisfactions will not be recorded in the
Register of Deeds offices because the liens are not tied to specific
property. The department also will issue partial releases with respect
to specific pieces of real estate if it is determined that the property
is being sold at or near fair market value. Releases will be mailed to
the closing agent for recording with the Register of Deeds. The
electronic terminal will not identify whether the lien has been released
from a specific piece of property. The Register of Deeds records must be
searched for this information on every open lien.
Commitment Procedures
Child support liens will appear on title commitments as numbered
exceptions. Neither the homestead exemption nor a discharge in
bankruptcy will act to release the property from the lien. Liens can be
removed only by payment in full to the department of the child support
amount on the lien docket. Satisfaction of the lien will not necessarily
satisfy all child support-related obligations because interest, fees,
and lump-sum amounts for which no periodic payments have been ordered
will not be included on the lien docket. The department will issue
binding pay-off letters, which can be requested from the county child
support agency. The pay-off letters will be valid for 30 days. Decisions
to subordinate the child support lien to refinanced mortgages will be
made on a case-by-case basis by the county child support agencies.
Enforcement
The state may choose to enforce a lien by a levy, followed by an
execution sale. The execution is conducted in essentially the same
manner as an execution on a judgment.7 A key difference
is that the homestead exemption does not apply to a support lien, and
thus neither do the homestead procedures in Chapter 815. Also, there is
no redemption period after the execution sale.
Notice of intent to levy must be served on the obligor and all other
owners of the real estate, and is filed with the Register of Deeds. The
notice of intent to levy must describe the real estate to which it
attaches. Co-owners of the property must respond to the notice. The levy
may be contested. Unless the levy is found invalid or the lien is paid,
a second "final" notice of intent to seize and sell the property must be
sent, not less than 20 business days after service of the notice of
intent to levy or the hearing date, if any. This final notice shall
state that the department will issue an execution requiring the sheriff
to sell the property within 90 days of the date of execution. This final
notice also must be recorded with the Register of Deeds. The sale is
then conducted and a deed issued by the sheriff to the successful
bidder. The department is developing a method by which to release a
Notice of Intent if either the support is paid or the execution has been
completed.
Conclusion
The Department of Workforce Development soon will begin implementing
additional child support enforcement tools mandated by PRWORA, including
license suspension and financial institution account seizure. These
enforcement tools may be used with obligors who are on the lien docket
and who have eligible arrearages in excess of three months' worth of
support. Obligors will be able to negotiate alternate payment plans with
the county child support agency in order to avoid these additional
enforcement tools.
The goal of the child support program is not to punish individuals
for nonpayment of support, but rather, to ensure that the children of
this state receive financial support. Many of the new enforcement tools
became necessary when payers found ways to avoid the traditional
enforcement methods. It is hoped that the new enforcement tools will
serve to reinforce the importance of financial support in a child's
life.
Endnotes
1 PRWORA, P.L. 104-193 (Aug.
1996).
2 Wis. Stat. § 49.854(2).
3 Wis. Stat. § 49.854(12).
4 Wis. Stat. § 49.854(7m).
5 Wis. Stat. § 49.854(3).
6 Wis. Stat. § 49.854(3)(ag).
7 Wis.
Stat. § 49.854(7).
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