Types of Debt That Can Garnish Your Personal Injury Settlement

Pursuing a personal injury settlement and reaping the benefits of a victory can be an extremely gratifying feeling. After spending grueling months in a courtroom, you can finally receive the compensation you deserve. 

However, if you win a personal injury settlement, or you’re pursuing one, you must be wary of any financial debt you have accrued, as this could affect the outcome or proceedings of your case through the act of garnishment.

What Is Garnishment?

Garnishment is the act of a creditor removing part of your wages, funds, or earnings to satisfy an outstanding debt. This process allows a lender to whom you owe money to take a significant portion of your personal injury settlement earnings and affect the outcome of your case. 

Luckily, not all types of debt can be garnished, but it’s important to be aware of which types can so you are adequately prepared for your personal injury case.

Forms of Debt That Can Garnish Your Earnings

Here are some of the most common types of debt that a creditor can garnish:

Unpaid Divorce Settlements

Creditors can garnish any outstanding child support or alimony from your settlement earnings.

Medicare/Medicaid and Health-Related Debt

Creditors can garnish any outstanding Medicare payments or health insurance bills from your settlement.

Loan Providers for Personal Injury Settlements

Failure to pay off any loans you took to obtain the personal injury settlement can also result in garnishment.

Car Insurance Providers

Any outstanding debt from car loans or car insurance payments are also forms of debt that can be garnished.

Tax Payments

If you have failed to make any IRS payments or pay outstanding taxes, these payments are not exempt from garnishment and can affect your settlement earnings.

How To Prevent Garnishment

If you are concerned about having your earnings garnished, the simple solution is to pay off your existing debt before the trial to ensure creditors don’t have access to your settlement earnings. Unfortunately, eliminating debt is not always easy.

Speak With Us About Debts That Can Garnish Your Personal Injury Statement

If you have concerns about your assets being garnished ahead of a case and want to protect your personal injury settlement, or if you want to learn more about garnishment in your state, contact the knowledgeable attorneys at Lowenthal & Abrams. 

We have over 35 years of personal injury law experience trying cases like yours, and we can help you present a powerful case to protect your assets.