Can Settlement Money Be Garnished for Child Support?

Many divorced and separated people are required to pay child support under the terms of an agreement or court order. Back due child support is relatively common. According to data from the United States Census Bureau, more than 55 percent of non-custodial parents owe at least some level of back due child support. In Nevada, wages may be garnished to cover child support obligations. 

At Naqvi Injury Law, we are skilled, results-focused advocates for injured victims. Our lawyers want to make sure that you have the information and resources that you need to effectively navigate the legal claims process. Here, our Las Vegas personal injury attorneys explain the most important things to know about settlement money and child support garnishments in Nevada. 

Nevada Law: Non-Custodial Parents Have a Responsibility to Support Children

As a starting point, it is important to emphasize that non-custodial parents— defined as a parent who does not have a primary physical possession of a child— may be required to pay child support to their co-parent. Nevada has standardized child support guidelines in place to help determine how much child support should be paid. 

In general, the guidelines work by looking at a non-custodial parent’s net income and the number of children that they have to support. Though, Nevada guidelines can deviate from the child support guidelines when deemed appropriate. In some cases, they may consider other assets— potentially including the proceeds of a personal injury settlement— that are owned by the non-custodial parent. 

Child Support and Personal Injury Settlements: Terms You Need to Know 

If you are navigating the intersection between personal injury settlements and child support obligations, there are some important legal terms that you need to know. Here are three key terms that you are likely to run into: 

• Arrears: Arrears is simply a legal term that refers to money that should have already been paid. A past due financial obligation is in a state of arrears. When child support is delinquent, it is in arrears. 

• Garnishment: Garnishment is a legal process whereby money that is meant to be paid to one person is taken to satisfy an outstanding debt that they owe. Wages can be garnished. Personal injury settlements can be garnished. Tax refunds can be garnished. 

• Lien: A lien is a security interest in another person’s property. A lien could be placed on real estate, personal property (vehicle, a bank account), or even a future legal judgment/settlement. 

Nevada Law: Personal Injury Settlement Money Can Be Garnished—With Restrictions

Personal injury settlement money can be garnished in Nevada. A person who owes back due child support and receives a personal injury settlement or verdict may end up seeing some of their money intercepted and re-routed to the custodial parent. That being said, there are some restrictions on when and how personal injury settlement money can be garnished in Nevada. To better understand how this works, it is useful to consider personal injury compensation in general. A personal injury settlement is not “free money”—far from it. With limited exceptions for punitive damages, a settlement or verdict is designed to compensate for their actual losses, including: 

• Property damage;
• Medical bills;
• Future medical costs;
• Lost wages; 
• Pain and suffering; and
• Long-term disability/impairment. 

The extent to which a personal injury settlement or verdict can be garnished for back due child support in Nevada depends on the reason why compensation is being granted in the first place. As explained in the official Nevada Child Support Enforcement Manual, the amount subject to seizure depends on the impact a settlement or verdict has on the net financial resources of the victim. In general, settlement funds for medical bills will be paid directly to healthcare providers. The injured may not see those funds, and thus will not need to worry about a child support garnishment. In contrast, settlement funds for lost wages are clearly a form of net income— those funds could be seized to cover back child support. In some cases, an injured victim may be allowed to claim an exemption to keep settlement funds protected from a garnishment to pay their own bills. 

Garnishment is Not Automatic—and Neither are Personal Injury Garnishment Exemptions 

In Nevada, garnishment of a personal injury settlement for child support is not automatic. Likewise, personal injury exemptions to protect funds for a child support garnishment are not automatically applied. Each situation is handled on a case-by-case basis. Here are four things you should know: 

• Funds May Be Garnished if Child Support Enforcement is Involved: Back due child support cases take many different forms. Some parents are years behind on their obligations. Others may only be a month or two behind on child support. In general, a personal injury settlement is only at risk of a garnishment if child support enforcement— either by state authorities or a private attorney— is involved.

• Personal Injury Claims are Reported to Enforcement Agencies: The Nevada Child Support Enforcement Manual clearly states that new laws (January 1st, 2020) are in place to require all insurance companies to report “personal injury, liability claims, workers’ compensation claims and life insurance claims to the Child Support Enforcement Program.” In other words, the Nevada Division of Welfare and Supportive Services (DWSS) will likely be aware of a personal injury claim far before it is settled if the injured victim owes back due child support. 

• Significant Discretion for Negotiating Garnishment: As noted previously, every personal injury claim is unique. Compensation is paid out on a case-by-case basis, with a careful review of the victim’s economic and non-economic damages. While Nevada DWSS has powerful authority to seize a personal injury settlement to cover back due child support, it also has significant discretion to negotiate an appropriate garnishment amount given the victim’s medical bills and other financial obligations. 

Whether a person owes child support or they are trying to collect child support from a personal injury settlement, proactive measures are a must. You can put yourself in the best position to protect your financial interests by working with an experienced attorney.

Naqvi Injury Law Protects the Financial Interests of Clients

Personal injury claims are complicated— even more so for people who owe delinquent child support. Assuming the Nevada Division of Welfare and Supportive Services is actively enforcing the case, there will be an attempt to garnish any personal injury settlement or personal injury judgment. How much (if any) funds will actually be taken out of a settlement/verdict depends entirely on the specific circumstances of the case. Many different factors matter, including: 

• The total amount owed; 
• The length of the child support delinquency; 
• The amount of the personal injury settlement/verdict; 
• The victim’s medical bills; and
• The victim’s general ability to pay. 

An experienced Nevada personal injury attorney can help you sort out these issues. With delinquent child support and personal injury claims, it is important to be proactive. At Naqvi Injury Law, we have the skills and legal knowledge to help ensure that our client’s financial interests are properly protected, including taking action to make sure that any personal injury settlement is structured in the proper manner. 

Contact Our Las Vegas Personal Injury Lawyers Today

At Naqvi Injury Law, our Las Vegas personal injury attorneys are compassionate, effective advocates for our clients. Our mission is to protect your rights and interests. If you have any specific questions about personal injury settlements and child support obligations, we are here to get you answers that you can rely on. Contact our legal team now for your free, confidential case evaluation. We provide personal injury services in Las Vegas, Clark County, and throughout Nevada.