After suffering an injury due to someone else's negligence, the most important thing to you could be filing a claim or lawsuit against the responsible party. What you might not expect is that once you receive the deserved compensation, another party could have a claim on your settlement money. If you are in the process of pursuing damages, here is what you need to know.
Why Is Your Settlement at Risk?
Depending on your current financial and marital situation, it is possible that other parties could have a claim to some of your settlement money. For instance, if you are in the process of divorcing, you might have to give a portion of your award to your spouse.
If you are in the process of filing for bankruptcy, it is possible that creditors can ask the trustee to take some or all of your award money to pay your debts.
How Can You Protect Yourself?
Whether or not it is possible to protect your award money from others depends on the threat and your state's laws.
If the threat is coming from your soon-to-be ex-spouse, whether or not your state is a community property state plays a role. In a community property state, the award is usually considered to be marital property. In this instance, you would have to share the money with your spouse.
However, if you do not live in a community property state, protecting yourself could mean lessening how much your spouse could receive. Personal injury claims consist of various components, such as payment for loss of companionship and lost wages. You can rely on your state's laws to determine which components your spouse is entitled to.
If your award money is at risk because you filed for bankruptcy, exemptions can provide some protection. In bankruptcies, filers are allowed to keep assets that total up to a certain dollar amount. The amount varies by state. You can choose to use the exemption to protect some or all of your money.
Depending on the state in which you live, there might be a special exemption designated for personal injury settlements. If that applies, then you can rely on it to help protect your money from your creditors.
The best way to protect your money is to work with a personal injury attorney like one from Clearfield & Kofsky. Inform him or her of potential threats you could face in the future and your attorney can help develop a strategy to protect your funds.
What kind of injuries can you hold someone liable for? How severe do the injuries have to be? When my husband was injured by a faulty saw, we weren't sure what we were going to do. At that time, we didn't have any health insurance and had to try to come up with the money for emergency and long-term medial treatment. This created an impossible time for my family. My husband was out of work and we had medical bills piling up because a product that we paid a lot of money for malfunctioned and injured my husband. So, what can you do when this happens? Read through my blog.