If you sustain injuries after an accident, you are entitled to compensation when you file a personal injury claim. The settlement for your injuries is meant for the expenses arising from your injury like lost wages, medical bills, and temporary disability. When a married couple gets compensation from a personal injury suit, the money is treated as marital property. Therefore, like all forms of shared assets and income, the compensation amount is divided between spouses during a divorce. What happens to a personal injury settlement granted after one is divorced? How does this affect child support obligations? The following web page seeks to define child support obligations, and how they affect one’s personal injury settlement.
Parents are supposed to provide financial support to their children to pay for their basic requirements. However, the amount of support is limited by the parent’s income. The court factors the income of parents when calculating child support. Certain types of payments are considered income and factored into determining payable child support. These payments include:
- Social security benefits
- Worker compensation benefits
In some states, disability payments are excluded when calculating child support. In many states, personal injury awards that are paid out in monthly rations are included in child support calculations.
Garnishing Personal Injury Settlements
One parent has the right to garnish the other parent’s wages or income to ensure they pay child support. Garnishment refers to a legal process whereby child support payments are deducted from a parent’s monthly income and given to the custodial parent. The amount taken usually depends on a parent’s income and the guidelines for calculating child support in that jurisdiction. Personal injury settlements that are delivered periodically are subject to garnishment in states that factor them as income when calculating child support.
Child Support Arrears
There are different methods used to collect from parents who have arrears for their child support payments. The parent claiming support should first seek a court ruling on the amount of arrears owed. It is only after such a judgment that the parent can garnish the other parent’s income for overdue child support. The custodial parent is also allowed to attach the deadbeat parent’s property including real estate, stock, accounts receivable, and bank accounts. In some state the custodial parent is allowed to collect child support through attaching personal injury settlements.
In some states, accident settlements are regarded as income but protected from garnishment. For example, in Tulloch v. Flickinger, in Michigan, the court ruled that though the parent’s injury award was counted as income, it was not subject to garnishment. In a separate case in Illinois, the court ruled that accident settlements administered in installments qualified as income in child support calculations. However, lump sum payments were not to be counted as income since they arose from extraordinary circumstances. Furthermore, even though periodic installments are to be deemed as income, only the portion of the award meant for lost wages is considered, the portion of the award representing pain and suffering does not count as income.
In some jurisdictions, your accident settlement award can only be garnished if you are in child support arrears. However, if your child support payments are up to date; the state cannot interfere with your injury award. Nevertheless, if the custodial parent successfully files a claim to have your settlement reconsidered as income, your injury award will be significantly reduced.
Personal injury awards are meant to compensate an injured person for medical expenses, lost income, and pain and suffering arising from an accident; as a skilled personal injury lawyer Minneapolis MN relies on can explain. In cases where the injured party has child support obligations, their settlement payments may be counted as income payable to the custodial parent. The main ways personal injury settlements are affected by child support are through garnishments, and payment of arrears.
Because laws vary by state, to gain a fuller understanding of how a personal injury award impacts child support payment obligations, consult with a lawyer.
Thanks to our friends and contributors from Johnston | Martineau PLLP for their added insight into the effects of personal injury awards on divorce proceedings