Personal injury settlements can be garnished in Nevada under certain circumstances, but limitations apply and garnishment procedures must be followed. In some cases, a personal injury lawyer may be able to help people structure their settlements to minimize the impact of garnishments.
What Is Garnishment?
A garnishment is a court order that allows creditors to collect the assets of their debtors to satisfy judgments. Through a court order, wages, bank accounts, and other resources may be taken to satisfy the amounts people owe. Creditors may pursue garnishments for consumer debts, student loans, child support, overdue taxes, and other debts.
Debt Collection and Personal Injury Settlements
Like other funds and assets, Nevada law allows creditors to take action to garnish the funds from personal injury settlements. However, the law also imposes limitations to ensure people are not left destitute or otherwise without the financial resources they need as a result of garnishment. Among other exemptions, the first $16,150 of personal injury settlements, excluding any payment for pain and suffering, is protected from garnishment. Creditors also cannot take payments awarded for the loss of future earnings.
Establishing Property Exemptions
While the law provides exemptions for a portion of personal injury settlements and other assets, this protection is not automatic. To exempt their settlements from garnishment, people must file a claim of exemption form with the creditor and the court within 10 days of the notice of garnishment. Unless the creditors object to the exemptions, any property, including personal injury settlement monies, must be released back to people within nine days of filing their claims of exemptions.
Should creditors object to the exemption claims for people’s personal injury settlements or other exempt assets, a hearing is held to determine the validity of the claims. After reviewing proof of the exemption, which may include bank statements, medical service invoices, and the court order awarding the personal injury settlement, the judge will decide whether the funds qualify as exempt. If the court rules in favor of the personal injury settlement holders, it will order the release of the exempt garnished property.
In many cases, a personal injury lawyer can help clients structure their settlements to minimize the impact of garnishments.