A personal injury settlement can be garnished in certain situations, although many types of settlement money receive essential protections under Georgia state law. Whether a settlement can be garnished depends on the type of debt involved and who is trying to collect it. A personal injury lawyer in Columbus, GA, from Fox Injury Law can explain how these rules apply to your unique situation.
What is garnishment?
Garnishment is a legal tool that allows a creditor to collect on a debt by having a third party, such as an employer or a bank, turn over money or property on your behalf. While most people think of wage garnishments, creditors can also pursue funds in bank accounts if they obtain the proper court order. Once you receive a personal injury settlement, creditors may attempt to access those funds, depending on the type of debt involved.
When can an injury settlement be garnished?
Whether an injury settlement can be garnished depends mainly on what types of obligations you owe. Unlike some federally protected benefits, personal injury claims are not universally shielded from all forms of collection.
- Medical liens: One of the most common deductions from settlement money is a medical lien. If a provider or insurer paid for treatment related to your injuries, they may be entitled to reimbursement from your settlement. Your attorney typically addresses these liens before you receive the remaining funds.
- Child support and alimony: Past-due child support and spousal support receive high priority under Georgia law. If you owe these obligations, a court may require that part of your settlement be applied toward them.
- Judgment creditors: Creditors with a valid court judgment, such as for unpaid loans or credit cards, may attempt to garnish your settlement or access the funds after they are deposited. Whether they succeed depends on timing, exemptions, and proper legal procedure.
What parts of a personal injury settlement are protected?
Many portions of compensation from a personal injury lawsuit, such as medical expense reimbursement or pain-and-suffering damages, are often exempt from garnishment by ordinary creditors. However, government-related debts, valid liens, family support obligations, and certain judgments can still access portions of the settlement.
Georgia law provides a specific exemption for personal injury recoveries in bankruptcy proceedings under O.C.G.A. § 44-13-100(a)(11)(D). In bankruptcy proceedings, this section generally allows a debtor to protect up to $10,000.00 of payments for personal bodily injury, excluding pain and suffering or compensation for actual pecuniary loss.
Can I protect my settlement?
There are steps that may help protect some or all of your settlement, depending on your situation:
- Bankruptcy exemptions: Georgia law may protect certain personal injury compensation in bankruptcy, subject to limits and specific requirements.
- Keeping funds separate: Placing settlement funds in a separate account can help document their source if exemption issues arise.
- Early debt review: In some cases, a lawyer can address liens or debts before funds are distributed, which may help preserve more of your recovery.
Should I talk to a lawyer about protecting my settlement?
If you are concerned about whether your settlement is at risk or want guidance on liens, exemptions, or creditor actions, our team can help. Contact us today at (404) 777-7778 for a free consultation with an experienced attorney who can evaluate your situation and help protect your rights and financial recovery.
