Who Has Access to Your Personal Injury Settlement After Your Divorce?
When two people get divorced, the custodial parent is often entitled to child support payments. The payment amount is typically determined based on the gross income of the payer. Gross income includes income from any source and may include wages, salaries, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workers compensation benefits, unemployment insurance benefits, disability insurance benefits, recurring gifts, prizes, etc.
The State of Arizona, like most states, takes paying child support very seriously. The State can take measures to make sure child support is paid. For example, the State can withhold a person's tax refund or seize a person's assets and use these amounts to make up past due child support payments.
One way the State can go about making a person pay their child support is by placing a lien on their property for unpaid child support. The lien remains until the amount is satisfied in full and may carry over to new property. As discussed in a previous blog post, a lien is a legal interest or right to another person's current or future property, valid till the debt is satisfied.
Another option available to the State, and one you want to be aware of if you plan on receiving a personal injury settlement, is a Limited Income Withholding Order. See A.R.S. 25-505. When a Limited Income Withholding Order is properly issued, the State can take severance pay, sick pay, vacation pay, bonuses, insurance settlements, commissions, stock options, excess proceeds, retroactive disability proceeds, and personal injury awards, all for the purpose of paying past due child support.
The surest and safest way to avoid liens, including Income Withholding Orders, and other legal complexities associated with child support, is to be up to date and current on your payments. If you have been injured, but are not current on your child support payments, please give us a call for a FREE CONSULTATION.