Can permanent worker's compensation checks be garnished by collections?
I was seriously injured on the job and was finally awarded permanent workers comp disability. This is not a lump sum payment but a disability check just like social security disability. My wife and I have about $41,000 in outstanding medical bills at this time plus a judgement for a repossessed car against us. The collection agencies want their money and we would like to know if they can touch my disability check. We have no other income or assets.
Generally speaking, workers compensation benefits are exempt from collection of private debt. Here lies the problem: when the money is direct deposited in to a bank account the judgement creditor sometimes attempts to levy on the account with the protected funds. Although there is a new law that went in to effect regarding the freezing of accounts in just these type of situations, sometimes things slip through the cracks. So I would place the bank on notice that the funds being deposited are worker's compensation benefits and that is all that is going in to the account and that they are exempt from levy. Some states have forms that you can fill out regarding this as well. Speak with a debt counselor about your situation as well. Good luck.