In Florida, personal injury settlement proceeds are generally exempt from garnishment by creditors, with exceptions for child support, alimony, federal tax debts, and victim restitution.
Circumstances Under Which a Personal Injury Settlement Can Be Garnished in the State of Florida
There are only some circumstances where a personal injury settlement can be garnished in Florida. This includes fraud or when you owe court-ordered payments like alimony or child support. Your settlement can also be garnished if medical providers have filed liens against you to pay for their services. There are also different types of garnishment actions.
Types of Garnishment Actions
There are federal and state garnishment actions. Federal debts that can be garnished include:
- Alimony
- Child Support
- Federal Student Loans
State income taxes can be garnished when a person fails to report income or makes a mistake in their state taxes.
Credit card and other types of debt can be garnished. The latter includes personal loans, medical bills and more. These are lesser-priority than federal and state debts.
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Conditions Where a Personal Injury Settlement Cannot Be Garnished in the State of Florida
In Florida, certain conditions apply where a personal injury settlement cannot be garnished. According to Florida Statute 222.14, a personal injury settlement cannot be garnished unless a creditor proves they were defrauded out of payment or that the debtor tried to delay paying. Head-of-household exempts also prevent personal injury settlements from being garnished.
Head-of-Household Exemptions
According to Florida Statute 222.11, head-of-household exemptions protect personal injury settlements from garnishment. This applies when someone is considered the head of their family while providing over half the financial support for a minor child or other dependent or when their weekly income is $750 or less. If earnings exceed that amount, their settlement can only be garnished through written permission.
Factors Affecting Garnishment of Personal Injury Settlements in Florida
Certain factors affect the garnishment of personal injury settlements in Florida. They include type of claim, purpose of settlement funds, Florida laws, creditor type, bankruptcy filing, settlement structure lump sum vs. structured/annuity settlements, award specifications and legal representation.
Type of Claim
Personal injury settlements can be garnished based on claim type. If debts to government agencies are involved, you can face garnishment. For example, you owe toward a child support order you’ve ignored or gained finances related to criminal actions.
Purpose of Settlement Funds
Garnishment may be an option based on the purpose of settlement funds. For example, using the money to pay medical bills is legitimate while splurging on a luxurious trip is not. In the latter situation, creditors can garnish your settlement.
Florida Laws
Florida laws mostly protect personal injury settlements from garnishment with some exceptions. Usually, creditors are prohibited from taking your settlement as debt repayment.
Creditor Types
Regular creditors cannot garnish your personal injury settlement unless you acquire the money through fraudulent means. Debts like federal and state taxes and court-ordered payments like alimony and child support can also result in garnishment.
Filing for Bankruptcy
Filing bankruptcy protects you from creditors seeking to collect debt. According to Florida Statute 55.145, some debts are discharged after a filing, and creditors cannot collect from personal injury settlements.
Settlement Structure Lump Sum vs. Structured/Annuity Settlements
Personal injury settlements can be paid in one lump sum or structured/annuity payments. A lump sum provides all the money at once while structured or annuity settlements are paid monthly or annually.
Although many people prefer a lump sum, some face overspending risks. Structured/annuity settlements can prevent that, but certain debts can be challenging to repay with that option. A lump sum payment offers better flexibility, but structured/annuity payments keep you disciplined.
Award Specifications
The specifications of your personal injury award can affect whether it can be garnished. It’s meant to compensate you for your medical expenses, lost wages, lost earning capacity, property damage, pain and suffering and other damages. If you received a settlement under false pretenses, it can be garnished.
Legal Representation
Legal representation can help when worried about personal injury settlement garnishment. An attorney can assess the situation and determine whether it can happen.
Impact of Outstanding Debts on Garnishment
Certain outstanding debts such as child support or taxes can lead to garnishment. However, usually, personal injury settlements cannot be garnished.
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We specialize in personal injury claims.
Influence of Legal Processes on Garnishment
According to Florida Statute 77.01, if a person has a judgment against them from the court due to unpaid debt, the creditor can garnish their funds. This is known as right to writ of garnishment.
What Is a Garnishment?
Garnishment is a court order granting a third party permission to seize assets from a debtor. This is usually done through automatic account withdrawals.
Garnishment Laws in Florida
According to Florida Statute 222.11, creditors can garnish 25% of a person’s weekly income or an amount where said income exceeds 30 times the federal hourly minimum wage, whichever is less. This is to satisfy debts like alimony, child support, unpaid taxes, federal student loans and court judgments. There are also exemptions from garnishment in Florida.
Exemptions from Garnishment in Florida
In addition to head-of-household, other garnishment exemptions exist in Florida. They include social security, workers’ compensation, welfare, disability and life insurance benefits and pensions.
Strategies to Protect Personal Injury Settlements
Certain strategies can protect personal injury settlements from garnishment. They include structuring settlements, creating trusts or annuities, negotiating settlement terms and consulting with legal professionals.
Structuring Settlements
Receiving personal injury settlements in structured settlements can protect them from creditors. Funds are exempt even when circumstances warrant garnishment.
Creating Trusts or Annuities
Placing settlement funds in trusts or annuities can protect you from garnishment. Both options ensure guaranteed income and provide peace of mind.
Negotiating Settlement Terms
Negotiating with a creditor can help if you owe debts that allow your personal injury settlement to be garnished. Often, creditors are willing to waive interest and accept lower payments so they can be paid.
Consulting with Legal Professionals
Consulting with legal professionals can help protect you from garnishment. A lawyer can determine whether this is an option and if you have protections.
Frequently Asked Questions
How Are Personal Injury Settlements Paid Out in Florida?
Personal injury settlements are paid as a lump sum or structured settlement payments.
What Income Is Exempt from Garnishment in Florida?
Head-of-household exempts your income from garnishment if you earn $750 or less weekly. If you earn more than that as head-of-household, your income can only be garnished through written consent.
What Are the Garnishment Laws in Florida?
Florida’s garnishment laws allow creditors to take 25% of someone’s income if they earn $750 or less weekly.
What Cannot Be Garnished in Florida?
Life insurance, retirement, annuities, 401Ks, federal and state welfare benefits, disability benefits and federal student loans cannot be garnished in Florida.
Is Florida a No-Garnishment State?
Florida is not a no-garnishment state.
What Is the Statute of Limitations for Garnishment in Florida?
Florida’s statute of limitations for garnishment is five years.
Can You Lose Your House in a Personal Injury Lawsuit in Florida?
You cannot lose your house in a personal injury lawsuit in Florida.
What Is the Process of Garnishment in Florida?
Garnishment occurs after a creditor gains a court judgment against a debtor.
What Is a Writ of Garnishment in Florida Rules of Civil Procedure?
A writ of garnishment occurs when the court allows a third party to seize a debtor’s property to satisfy outstanding debt.
Can a Settlement Be Garnished for Child Support?
A settlement can be garnished for child support.
Can a Personal Injury Settlement Be Garnished?
In most cases, personal injury settlements cannot be garnished.
Can the Government Take Your Settlement?
The government can take your settlement if government programs could have been used to pay for your medical expenses.
How to Protect Settlement Money
Placing funds into a separate account can protect settlement money.
Need free legal help in Florida?
We specialize in personal injury claims.
