Di­vorced? Fight­ing over the kids? There’s an app for that

▶ Sup­port pay helps au­to­mate di­vorce money man­age­ment ▶ Par­ents can make pay­ments and “never have a con­ver­sa­tion”

Bloomberg Businessweek (North America) - - Contents - Edited by Jeff Muskus Bloomberg.com

When Sheri At­wood is pitch­ing you, she leads with the di­vorces. Her par­ents’ was hor­rific, a hos­tile split where the cou­ple saw each other only in court and the kids were stuck in the middle of money bat­tles. Af­ter her own di­vorce, At­wood was sur­prised when money, again, frayed an oth­er­wise am­i­ca­ble re­la­tion­ship with her ex. It was dur­ing one of those squab­bles that she got the idea for Sup­port­pay, an app that lets par­ents au­to­mate the divvy­ing up of child- care costs and can help me­di­ate con­flicts.

Child sup­port agree­ments typ­i­cally re­quire that par­ents di­vide, along with such ba­sics as food, cloth­ing, and shel­ter, other ex­penses as they come up, from med­i­cal bills to hob­bies and ex­tracur­ric­u­lars. Th­ese can cre­ate the most con­fronta­tions be­tween par­ents: Does lit­tle Liam re­ally need a math tu­tor? Is his soc­cer camp worth $700 a week? With Sup­port­pay, par­ents can up­load re­ceipts, send or pay bills through Paypal, and “never have a con­ver­sa­tion,” says At­wood.

The app lets par­ents dis­pute ex­penses be­fore pay­ing them, as long as they can pro­vide rea­sons and pro­pose al­ter­na­tives. A judge has fi­nal say, but the app is de­signed to pre­vent th­ese fights from end­ing up in court.

Olivia Haugher, a South­ern Cal­i­for­nia mother of three who uses Sup­port­pay, says the two-year-old app has kept oc­ca­sional skir­mishes with her ex-hus­band over money away from the kids. “It ba­si­cally has helped us com­mu­ni­cate bet­ter,” she says. It’s also re­duced frus­tra­tions over for­got­ten check­books or missed e-mails. Plus, “he gets to see how ex­pen­sive the kids are.”

Par­ents who can be slow to write checks of­ten just want to be sure the money’s re­ally go­ing to the kids, says Ryan Falvey, man­ag­ing di­rec­tor at the Cen­ter for Fi­nan­cial Ser­vices In­no­va­tion. Last year the Chicagob­ased non­profit named Sup­port­pay the win­ner of a com­pe­ti­tion among dig­i­tal ser­vices help­ing fam­i­lies man­age strained fi­nances. “This might be where tech­nol­ogy can solve things in a big way, just by con­nect­ing peo­ple to in­for­ma­tion,” Falvey says.

At­wood’s com­pany, It­tavi, es­ti­mates that Sup­port­pay’s 36,000 users (up from 12,000 a year ago) will send $900 mil­lion through the app this year. Based in Santa Clara, Calif., it has nine

full-time em­ploy­ees, is run­ning on $3 mil­lion in ven­ture fund­ing, and is rais­ing $3 mil­lion to $5 mil­lion more, says At­wood, the chief ex­ec­u­tive of­fi­cer. That should be enough to last, she says, un­til It­tavi is prof­itable.

Sup­port­pay’s free ver­sion lets peo­ple keep six months of records. About 1 in 4 users pays $120 for a year’s sub­scrip­tion to a pre­mium ver­sion with longer-term record­keep­ing and e-mail alerts, or $156 a year for the “le­gal” ver­sion, which in­cludes doc­u­ments for court and tax fil­ings and shares records with at­tor­neys or media­tors.

If di­vorced cou­ples end up back in court, those records are cru­cial, says Derek Austin, a di­vorce at­tor­ney who’s ad­vised Sup­port­pay. Par­ents need to be able to prove that they’ve made ev­ery re­quired child sup­port pay­ment, or else courts can de­mand back pay­ments and gar­nish their wages. Austin says the app is a less harsh al­ter­na­tive that still en­sures the money ar­rives on time. “I use it as a tool to man­age re­la­tion­ships,” he says.

At­wood says her team is work­ing on adding pay­ment op­tions and fea­tures such as cal­en­dars and con­tact lists. The app will also let users con­nect bank ac­counts for fi­nan­cial plan­ning pur­poses (a col­lege fund, say) with­out nec­es­sar­ily re­veal­ing ev­ery­thing to their exes, she says.

Of­ten, though, Sup­port­pay just helps keep things sim­ple, says An­drew Wil­liams, a father of four from Modesto, Calif. He says he gets along with his ex-wife but uses Sup­port­pay to or­ga­nize the doc­u­ments they share—their di­vorce agree­ment, their chil­dren’s school bills, even re­port cards. “Now ev­ery­thing is cen­tral­ized,” he says.

Their child sup­port agree­ment ex­pires in July when their youngest son turns 18, but Wil­liams says he’ll still use the app to keep his fi­nances straight—and to keep shar­ing the cost of the fam­ily dogs, a 9-year-old pug and a 5-year-old Ger­man shep­herd that live with him. For now, he says, “I’m pay­ing her child sup­port, and she’s pay­ing dog sup­port.” �Ben Stev­er­man

The bot­tom line About 1 in 4 of Sup­port­pay’s 36,000 users pays at least $120 a year for the di­vorce mi­cro­man­age­ment app.

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