Can Settlement Money From a Car Accident Be Garnished?

Sometimes, a person involved in a car accident will be compelled to settle with the other party involved in the accident, or his insurance company, for a set sum of money. The party that is financially responsible for the accident will be required to make payment to the other party. If the financially responsible party fails to do so, the other party may sue her in court and, if necessary, have her wages garnished.

Car Accident Settlement

After a car accident has occurred, the insurance companies representing the drivers will attempt to determine who caused the accident and who is legally responsible for the expenses arising from the accident. While this may be decided in court, more often the parties involved in the crash will settle outside of court, with one party agreeing to make restitution to the other, either verbally or through a written contract.

Civil Suit

If the party that has agreed to pay money stemming from the accident fails to do so, he may be sued in court. This suit will likely be a breach of contract suit, as the person failed to uphold his end of the legal agreement to make a payment to the injured party. If the plaintiff wins, he may be awarded damages. If the defendant refuses to pay them, the judge may order a garnishment.

Garnishment

When a defendant's wages are garnished, it means that money is extracted from his paycheck by his employer and given to the plaintiff. In most states, garnishments can be ordered for the collection of damages from civil suits. However, the judge must first receive a petition from the plaintiff for garnishment and, upon agreeing to it, issue an order of garnishment to be presented to the defendant's employer.

Exceptions

Certain types of individuals are exempt from garnishment. For example, many states forbid low-income individuals from having their wages garnished. In addition, some income streams cannot be garnished. For example, federal benefits, such as Social Security payments, cannot be forcibly seized by private creditors. So, in some cases, a plaintiff may not be able to issue a garnishment order against a person who has failed to make good on a settlement.