How to get arrears forgiven or removed

My husband has paid child support to his ex-wife for 16 years. His son is now 18 years (as of 8/2/10). However, he resided with my husband's mother, his grandmother since 08/09. Child support payments were still withdrawn due to a judgment order and paid to his ex-wife. There were 3 months that she attempted to give money that was paid to her to my husbands mother and then it stopped. She also received part of our tax returns that went to pay for arrears.

At this point, we owe a final balance of approximately $700.00 that she clearly does not deserve or is due any of it. She has not provided a home or essentials or anything of the like to her son. We were told that simply because she never gave up her parental rights and only allowed my mother in law to be guardian that we still had to pay this woman. We have 3 children of our own and we cannot afford to pay any more to this woman who hasn't cared for her son. I'm afraid that our taxes will be withheld to pay the remaining arrears. I would like to know if there is something we can file to forgive the arrears as well as receiving a credit for the 10 months worth of paying though she didn't have him in her custody. What form can we fill or is there a form SHE can fill out (if willing and that's a big IF). We live in the state of Oregon.