Will a judgement be taken out of an auto accident settlement?

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Will a judgement be taken out of an auto accident settlement?

$5000 in judgements from other debt. The auto settlement check should be within a year.

Asked on February 10, 2011 under Accident Law, South Carolina

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

South Carolina is one of those states that is better for the debtor rather than the creditor.  It appears that they have a very broad interpretation on what is known as Exempt property from garnishment.  Wages - or salary from "personal service" - are believe it or not, exempt.  Money, though, that could be considered income held by a third party - such as rent - is not.  I would speak with your attorney on the matter. Certain other monetary instruments - such as annuities - can also be exempt so maybe how you structure the settlement will matter her.  However, you should consider paying off the creditor rather than avoiding the judgement. 

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It could be. Not automatically; it's not as if, without anything else happening, some portion of the settlement payable to the debtor will be diverted to his or her creditors. However, if the creditors are or become aware of that money, they could seek a court order garnishing some of the payment when made. So it would be possible for the creditors to get their hands on the money. Or alternately, after the debtor has the money, they could seek to garnish money in or her bank accounts. To avoid spending yet more money on lawyers fighting, when fighting may be a lost cause anyway, the debtor is probably best off simply paying the debt when he or she has the money. That will also start the process of the debtor's credit recovering.


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