Can My Injury Settlement Be Taken for Child Support or Alimony Payments?

Whether the insurance company agreed to pay you a fair settlement after some negotiations or you’re eventually awarded a check after a civil trial, knowing you’re finally getting money to pay for your injury-related expenses is a relief.

The constant anxiety and worry about how you’ll afford your medical bills when you aren’t able to work may seem like it’s finally behind you, but for some claimants, including those are who are getting divorced or have children living with another parent, winning a settlement doesn’t automatically mean they’re entitled to all of the money.

Settlements Can Be Affected by Child Support Orders

The amount of money that a non-custodial parent must pay in child support is typically established based on their income at the time of the divorce or when the child support order is established and enforced. However, the amount of child support that must be paid can be affected by a personal injury settlement under the following circumstances:

• You’re behind on child support payments. If you’ve missed child support payments, which is common for injured victims who weren’t earning paychecks while they were recovering from their injuries, the state of Indiana may place a lien on the settlement you receive from the insurance company. This lien will be used to pay back your missed child support payments, and that money will be fully deduced before you receive your final, reduced check.
• You receive a large settlement. Some personal injury claims can result in huge settlements, especially those for catastrophic injuries, truck accidents, and medical malpractice. If your settlement is large enough to result in a dramatic increase in income, it could result in higher child support payments.

Note that regardless of how much money you’re required to pay out of your settlement for child support, your medical bills will always be paid first.

Settlements Can Also Be Affected by Alimony Orders

If you won a personal injury settlement before or during your marriage, it can be considered marital property and subject to 50/50 division if you get divorced. You also may be required to pay some of your settlement to your ex-spouse if your injury or accident occurred while you were still married even if you filed your compensation claim after your divorce had finalized.

However, if your accident or injury occurred AFTER your divorce was finalized, it’s unlikely that your ex-spouse will have a claim to any of the money. That’s because Indiana’s family law courts don’t often change spousal maintenance agreements after they’ve been finalized.

Injury Settlements Can Work Both Ways in Calculating Child Support and Alimony

Getting a personal injury settlement can affect the amount of child support and alimony—or spousal maintenance—you owe (and the amount you get to take home), especially if your settlement is substantial or you’re behind on your payments. But the consequences of winning a personal injury settlement go both ways and for both parties.

That means that if your ex-spouse or the parent of your child wins a substantial personal injury settlement, you may be able to revise how much money you owe in support payments to pay less. That’s because the amount of money they receive from their settlement may be sufficient for them to have greater or even complete financial independence and self-sufficiency, and that means they’ll require less money from you every month.

Need Help? Get a Law Firm that Knows Personal Injury AND Family Law

For many people, winning their injury claim is just step one when it comes to financially recovering from a serious injury. If you’re one of the millions of Americans who face child support or spousal maintenance payments every month and want to file a personal injury claim, our Indiana personal injury lawyers want to help.

We know that you’re going through a complex situation, and you need aggressive, knowledgeable representation to ensure your rights are protected. Get in touch with the experienced legal team at Fleschner, Stark, Tanoos & Newlin today for a free consultation.