Can Creditors Take my NJ Personal Injury Settlement Money
Our attorneys have over seven
decades combined experience.
It takes a long time to work through a personal injury settlement. You may be unable to generate an income through a significant portion of that time, or maybe even for that entire time.
It’s natural that bills will pile up as you try to get compensation for your auto accident injuries. You may be worried that those creditors will immediately come for your settlement the moment you receive it.
Here’s what you need to know.
Some entities can put a lien on your personal injury settlement, and sometimes those liens benefit you.
Hospitals who treat your injuries while you are awaiting settlement can put a lien on your settlement to ensure they get paid. This benefits you because they might otherwise refuse to treat you.
Insurance companies sometimes pay out benefits knowing they’ll be able to recoup what they pay you by attaching a lien to your settlement. For example, your own car insurance company may go ahead and cover some of your costs. You won’t get to double dip by receiving the same money twice. They’ll recover those costs from your settlement. The same may be true for Medicaid, Medicare, your private health insurer, or even workers compensation if you are suing a third party.
Finally, the IRS can put a lien on your settlement if you owe back taxes or student loans.
Many of these liens are automatic. Some your attorney will create for you just to keep these creditors off of your back. In all cases you would have owed this money anyway and it would have been directly related to your accident and injury costs.
All creditors may not put a lien on your personal injury settlement.
Credit card companies, your auto lender, and other creditors cannot put a lien on your personal injury settlement. If you handle it correctly, they shouldn’t even be able to touch it in most cases.
You will still need to take steps to protect your money from creditors.
The only way to keep your money safe from other creditors is to keep it separate. Put it in its own bank account. Do not deposit any other money into that account. Otherwise all the money loses its protection.
Keep in mind if you file Chapter 7 bankruptcy you’ll only be able to keep what New York or the federal bankruptcy exemptions allow you to keep. If you plan to file bankruptcy you might want to try a Chapter 13, and you will definitely want to work with a bankruptcy lawyer to go over all your options.
See also:
Can I Work if I Have an Active Personal Injury Case?
Practice Areas
Practice Areas
It takes a long time to work through a personal injury settlement. You may be unable to generate an income through a significant portion of that time, or maybe even for that entire time.
It’s natural that bills will pile up as you try to get compensation for your auto accident injuries. You may be worried that those creditors will immediately come for your settlement the moment you receive it.
Here’s what you need to know.
Some entities can put a lien on your personal injury settlement, and sometimes those liens benefit you.
Hospitals who treat your injuries while you are awaiting settlement can put a lien on your settlement to ensure they get paid. This benefits you because they might otherwise refuse to treat you.
Insurance companies sometimes pay out benefits knowing they’ll be able to recoup what they pay you by attaching a lien to your settlement. For example, your own car insurance company may go ahead and cover some of your costs. You won’t get to double dip by receiving the same money twice. They’ll recover those costs from your settlement. The same may be true for Medicaid, Medicare, your private health insurer, or even workers compensation if you are suing a third party.
Finally, the IRS can put a lien on your settlement if you owe back taxes or student loans.
Many of these liens are automatic. Some your attorney will create for you just to keep these creditors off of your back. In all cases you would have owed this money anyway and it would have been directly related to your accident and injury costs.
All creditors may not put a lien on your personal injury settlement.
Credit card companies, your auto lender, and other creditors cannot put a lien on your personal injury settlement. If you handle it correctly, they shouldn’t even be able to touch it in most cases.
You will still need to take steps to protect your money from creditors.
The only way to keep your money safe from other creditors is to keep it separate. Put it in its own bank account. Do not deposit any other money into that account. Otherwise all the money loses its protection.
Keep in mind if you file Chapter 7 bankruptcy you’ll only be able to keep what New York or the federal bankruptcy exemptions allow you to keep. If you plan to file bankruptcy you might want to try a Chapter 13, and you will definitely want to work with a bankruptcy lawyer to go over all your options.
See also:
Can I Work if I Have an Active Personal Injury Case?