Wisconsin Personal Injury Lawyer Helps You Keep Settlements
Consult A Wisconsin Personal Injury Lawyer For Help Preventing Creditors From Taking Your Personal Injury Settlement
It’s a terrible situation to find yourself in. You have been injured by another party through no fault of your own. You end up being out of work and racking up both medical bills and day-to-day expenses. You might find yourself facing bankruptcy only to finally win a personal injury settlement that can help you get back on your feet.
What now? Can creditors claim your personal injury settlement?
States generally protect personal injury awards from creditors, especially if you need the funds to continue in your standard of living. But just because protections for personal injury awards exist, it does not mean a creditor won’t try to take the awarded amount or part of it.
Protecting Personal Injury Settlements As Assets
Wisconsin is one of only seventeen states that allows you to choose whether your bankruptcy will be subject to state or federal exemptions. These exemptions stipulate which assets are protected under bankruptcy law. If the asset is exempt, you can keep it. If it isn’t, creditors can claim it.
Debtors are fortunate to be able to choose between state and federal exemptions in our state because it means they can examine both sets of exemptions and choose to apply for bankruptcy protections under whichever one is more helpful to them keeping some of their assets. Still, whether or not an asset is exempt is dependent on your individual circumstances including your marital status, whether you have any dependents, and how the debt occurred.
Under Wisconsin State Statute § 815.18(3)(i), personal injury, wrongful death, and life insurance settlements of $50,000 or less are generally exempt from creditor collections.
It is a good idea to keep this money in a separate account from your wages and other sources of income. Otherwise, it may be argued that the funds were comingled and thus not subject to the exemption protections. Maintain a paper trail to prove that the monies are from the personal injury settlement; keep copies of the settlement checks and deposit statements to prove that only settlement funds were deposited into the account.
Claiming An Exemption
Just because an asset is generally considered to be exempt from creditor collections, it does not mean this exemption is automatically applied. Debtors still must apply for the exemption. To do this, you’ll need to inform the creditor or his/her agent of the specific asset to which you are claiming an exemption. This request must be made before the disposition of your property and assets.
If a creditor tries to claim personal injury settlements as payment, they’ll have to file a civil suit against you. Such an action requires them to follow certain procedures to claim your assets. First, they must file a lawsuit against you, prove their case, and win. If they win the case, the court will issue a judgment, which allows a creditor to garnish wages, seek a bank levy, or file a lien against your assets and personal property.
Exemptions To Exemptions
As with most things, there are exemptions to the personal injury lawsuit exemptions. For example, in WI only up to $50,000 of the settlement is exempt. Anything more than $50,000 may be used to pay off creditors. Likewise, the court may order back child support and federal taxes to be paid from the personal injury settlement, even if it is less than $50,000.
Protect Yourself With Help From A Wisconsin Personal Injury Lawyer
Are you confused yet? Bankruptcy law and personal injury law are both complex fields of law that requires the help of an experienced attorney. Fighting creditors is not something you should try to handle on your own. A Wisconsin personal injury lawyer can help you determine whether or not your personal injury settlement is exempt from creditors.