Can ajudgement creditor seize my insurance settlement ifI have a re-payment arrangement with them?

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Can ajudgement creditor seize my insurance settlement ifI have a re-payment arrangement with them?

I currently have 2 judgements against me  making payments each month to them) and I just received a auto accident settlement for my injuries. I was wondering if, as long as I was making my scheduled payment, could these judgement creditors take my settlement to satisfy my debts?

Asked on October 18, 2010 under Bankruptcy Law, Illinois

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you have an agreement with a creditor or creditors to pay off your debt, and it is in writing, check the provisions of those settlement agreements to determine if those creditors can simply follow the legal procedures to obtain a garnishment of your insurance settlement.  Also understand that oftentimes if you have judgment creditors after you, these debts are on your credit report, which can cause your credit score to plummet.  Consider reviewing your options and if you can use your settlement monies to pay off the creditors, you might be able to have these debts erased from your credit report. If you do not pay your creditors, your creditors can simply file the proper paperwork in court to attach to your settlement proceeds and garnish them.


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