Do I Have to Use My Personal Injury Award for Child Support Payments?
Posted by jmr on Aug 15, 2018 in Uncategorized | 0 comments A parent owing past due child support will be obligated by most states to pay it out of a personal injury settlement they receive. There has been an increase in litigation since the 1990s to intervene in cases of the proverbial “deadbeat” parent receiving compensation for pain and suffering, and other consequences of a personal injury. No federal laws dictate these situations and states vary by jurisdiction. Usually states consider a personal injury settlement as income when child support is being calculated. The 1997 case Harbison v. Harbison, the state of Alabama decided a settlement paid out at $1,000 monthly over a period of ten years is part of a parent’s monthly income. Pennsylvania and New York agree to those terms as well. When does the state step in? These measures are only enforced if you are not up to date on your child support payments. The state will not intervene unless the other parent of your child files a lawsuit demanding your award be counted as income and used toward a recalculation of child support which will most likely end in a higher rate of child support obligation. Exceptions on Settlements While some states consider settlements as income, others except them from garnishment. The state of Michigan agreed that settlement money is considered income but is not subject to wage withholding–this was decided in the case Tulloch v. Flickinger. In 1197, Illinois decided that settlements received in installments are considered income, but an award paid in a lump sum is not. In Illinois, only a part of the settlement award representing lost wages is considered income, not the portion compensating for pain and suffering; even with periodic installments. Enforcement of Updated Legislation New Jersey and Pennsylvania have passed laws obligating personal injury lawyers to pay past due child support out of personal injury awards won by their clients. If a client owes child support, the state of New Jersey will place a lien on your award proceeds. The lien must be satisfied before you receive the remainder of your award. Fairness of Arrears If you live in New Jersey and your personal injury award amounts to less than what you owe in back child support, it will go straight to child support arrears. Other states think that this is unfair. In Pennsylvania, your settlement is deducted by the costs of litigation, then you receive the next $5,000 and...read more