So your attorney recently called and told you that after the negotiating process, the insurance company is making a settlement offer that may bring your matter to a resolution. Finally, the stressful process of getting into a motor vehicle collision and the dealing with the injuries it caused is coming to an end. Then you find out that the insurance company also gave notice of a “child support lien.” What does that mean? What does child support have to do with your personal injury? How much are they going to take? Can you dispute it?
Child support liens can significantly impact the financial outcome of a personal injury settlement. Here’s a deeper look into the mechanics of these liens and their implications for injured parties.
Legal Framework for Child Support Liens
Purpose of Child Support: Child support is designed to ensure that children receive financial support from both parents, regardless of their living situation. When one parent fails to pay the mandated support, the other parent or the state may seek recovery through legal means.
Establishment of Liens: When a parent falls behind on child support payments, the responsible agency may file a lien against any future income, including personal injury settlements. This means that before you receive your settlement funds, the amount owed in child support can be deducted.
How Child Support Liens Work
Notification: When your attorney negotiates a settlement with the insurance company, they may receive a notice indicating that a child support lien exists. This notice informs both you and your attorney that a portion of your settlement will be directed toward unpaid child support.
Calculation of Amounts: The amount that will be deducted from your settlement depends on:
Outstanding Child Support: The total amount you owe in back child support.
State Regulations: Each state has its own rules regarding how much can be taken from settlements for child support. Some states have caps or specific formulas for calculating lien amounts.
Payment Process: Once the settlement is finalized:
The insurance company will issue a check for the settlement amount.
Before distributing the remaining funds to you, the insurance company will pay the specified amount directly to the child support agency to satisfy the lien.
Addressing Concerns About the Lien
Disputing the Lien: If you believe the lien is incorrect or that you do not owe the stated amount:
Gather Evidence: Collect documentation that supports your case, such as payment records or proof of financial hardship.
Consult Your Attorney: Your attorney can guide you on how to formally dispute the lien and advise you on the necessary steps to potentially reduce or eliminate the claim against your settlement.
Impact on Settlement: Understanding that a child support lien will affect your take-home amount is crucial. Planning for this deduction can help you manage your finances post-settlement.
Implications for Personal Injury Cases
Financial Planning: Being aware of child support obligations before pursuing a personal injury claim can help you set realistic expectations regarding the settlement amount you will ultimately receive.
Legal Advice: Seeking legal guidance throughout the process is vital. An experienced attorney can help you navigate child support issues, negotiate effectively with the insurance company, and ensure that your rights are fully protected.
The General Rule
For one reason or another, an obligor can get behind on their child support responsibilities. When this happens, the State of Texas has strict rules on the status of such a debt. Generally speaking, if an obligor recovers compensation from a personal injury settlement, but has outstanding child support obligations, the State of Texas Attorney General’s office child support intercept division will attach a lien to the claim. This means that the obligor must satisfy their child support debt before the Texas Attorney General’s office will lift the lien and allow payment to the obligor.
Overview of Child Support Obligations
Obligor Definition: An obligor is an individual who is legally required to pay child support. Circumstances may arise where the obligor falls behind on these payments due to various reasons, such as financial hardship or other personal issues.
State Regulations: Each state governs child support through its own laws, and in Texas, the rules regarding outstanding child support debts are particularly strict.
State of Texas Regulations
Debt Status: When an obligor has overdue child support payments, the State of Texas treats this debt seriously. The consequences can affect the obligor’s ability to receive funds from various sources, including personal injury settlements.
Lien Attachment:
If an obligor receives a personal injury settlement while having outstanding child support obligations, the Texas Attorney General’s Office will intervene.
The Child Support Intercept Division is responsible for attaching a lien to the settlement claim. This lien acts as a legal claim against the settlement funds.
Implications of the Lien
Satisfaction of Debt: Before the obligor can access any part of their personal injury settlement:
They must first satisfy the child support debt that led to the lien.
The Attorney General’s office will not lift the lien until proof of payment or an agreement on repayment has been established.
Impact on Settlement Funds: This means that the obligor will receive a reduced amount from their personal injury settlement, as the necessary funds will be diverted to pay past due child support.
Do I have to pay ALL my back child support debt before I can receive compensation for my injury?
Generally speaking, the answer is yes. Your attorney can always reach out to the Texas Attorney General’s office and ask that an amount be taken by child support that is less than the total amount outstanding. In some circumstances, they are willing to work with the obligor. Depending on your specific circumstance, you should ask your attorney to reach out to the Texas Attorney General’s office.
What about my medical bills? What about the fee for my attorney?
Your attorney’s fees, as well as any medical bills you accrued as a result of the injury, are deducted from your settlement offer before your child support lien is addressed. This ensures that you are not creating new debts by attempting to pay existing ones.
It is always important to know your legal rights. If you have ever been involved in a motor vehicle collision, you may be confused about the process and what to do next. The attorneys at Herrman & Herrman PLLC are always on standby to help! If you have any questions about a potential claim or would like to sit down for a consultation and discuss your issue, please contact us immediately. At Herrman & Herrman PLLC, we always strive to put our clients first!
*This blog is for informational purposes only. It is not intended to be, and should not be construed as, legal advice.
