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You were hurt on the job and you are getting workers' compensation, which helps. But your debts are many and you worry that your creditors are going to come calling.
You'd happily pay everyone what you owe if you could but you have no funds to spare and there is no way to pay off debt with the little you get now. Will your worker's compensation be garnished? The short answer is probably not. Let's look at some details.
Both federal and state laws regulate the amount of money that can be garnished from a person's income. The type of income that a creditor seeks to garnish will impact the ability to collect as well.
Generally speaking, worker's compensation payments cannot be garnished by regular debt collectors, although there are some exceptions with respect to government garnishment for spousal and child support, depending on the state. In Ohio, for example, a garnishment for family support doesn't even require a court order reportedly.
If you were earning regular income, your creditors could garnish up to 25 percent of your total disposable income or whatever you earn that exceeds 30 percent of federal minimum wage. Individual states may have different specifics that apply, however, so do look up the local laws.
Protecting Injury Settlements
Workers' compensation generally exists to minimize employee lawsuits for injury on the job. But that does not entirely rule out civil suits stemming from work-related injury against a party other than your employer, say a manufacturer of a defective product. Although your workers' compensation settlements should be safe from creditors, generally speaking you should be aware of the fact that injury settlements are subject to creditors' liens.
Many patients are suing hospitals who they say overcharged them by collecting money from insurance companies and from the patient with a lien on an injury settlement. But the rules are complicated and everything will depend on the details of your situation. For example, say your health insurer claims a portion of a car accident settlement, that may just be written into your policies.
Talk to a Lawyer
If you are concerned about workers' compensation, speak to a local lawyer. An attorney can give you invaluable guidance that applies to the specifics of your situation. Many lawyers consult for free or a minimal fee and will be happy to discuss your case.