On August 14, 2000 a new law went into effect creating a lien in favor of child support judgment creditors for money due and owing from sources such as judgments, inheritances and settlements on payments owing to or to be collected by the child support debtor. N.J.S.A. 2A:17-56.23b.

The new law creates a lien in favor of child support judgment creditors against other sources of the debtor including judgments, inheritances and settlements on payments owing to or to be collected by the child support debtor. This means that if you are collecting on a judgment, you must first determine if the creditor has a child support judgment against them. If they do, the party making the payoff must determine the balance due on the child support judgment and pay that amount before paying the balance to the original judgment creditor. This lien has priority over all other levies and garnishments against the net proceeds of any settlement negotiated prior to or subsequent to the filing of a lawsuit, civil judgment, civil arbitration award, inheritance or workers’ compensation award unless otherwise provided by the Superior Court, Chancery Division, Family Part.

What does this mean for you, closing a title? If the seller of real property is a decedent’s estate, before distribution of the proceeds can be made to the heirs, or beneficiaries, it must be determined whether each heir or beneficiary is free from child support judgments. The heir/beneficiary shall provide to the attorney or agent responsible for the final distribution of funds, a certification including name, address, date of birth and social security number and a child support judgment search. The fee for the judgment search is the responsibility of the seller and shall be charged against the net proceeds as a cost of the inheritance. If the certification shows there is no child support judgment, the net proceeds may be paid directly to that heir/beneficiary. If there is a child support judgment, the seller’s attorney must contact the Probation Department and arrange for the satisfaction of the judgment. Upon receipt of a Warrant of Satisfaction for the child support judgment, the net proceeds may be paid to the party. If the net proceeds are less than the amount of the child support judgment, the entire proceeds shall be paid to the Probation Department as partial satisfaction of the judgment.

The above procedure applies not only to the receipt of an inheritance by way of sale of real estate, but also to any settlement, judgment or award to the heir/beneficiary.