How to Protect Your Personal Injury Settlement


You might think the work on your case will end when you receive a personal injury settlement. However, there are still steps you need to take to protect the money you receive from an insurance company or defendant. Protecting your settlement means making sure a creditor cannot file a lien against it or take it – even if you declare bankruptcy. You may need a San Antonio personal injury attorney’s assistance to fully protect your settlement in Texas.

How to Protect Your Personal Injury Settlement

Understand Your Rights

First, learn a few key facts about your rights as the recipient of a personal injury settlement in Texas. State law says that money awarded in personal injury and workers’ compensation settlements are exempt from creditors seizing it. This means that even if you owe a creditor or debt collector money, and even if you declare bankruptcy, creditors legally cannot seize settlement money from your bank account to use to pay off your debts. To ensure this type of protection, however, you must be proactive in safeguarding your settlement.

Keep Your Settlement Separate

Keep your personal injury settlements separate from other forms of income, including wages from your job or Social Security Disability benefits. Rather than depositing the settlement check directly into your standard bank account, keep the settlement money in its own separate account. This can help you keep it safe from creditors that may try to garnish your wages by taking the money you owe directly out of your bank account.

Mixing your personal injury settlement money with your regular income can bring the risk of a creditor subtracting part of your settlement to pay off debt rather than taking it only from your disposable income. Although this is technically illegal, the creditor might not be able to distinguish between money from your personal injury settlement and money from your typical paychecks. Avoid this issue by keeping the two sources of money separate.

Use a Prepaid Debit Card

Another way to protect your personal injury settlement is by using a prepaid debit card rather than your normal debit card that is connected to your bank account. Using a prepaid card to spend your settlement money on bills or in an emergency gives you a way to spend the money conveniently without exposing it to creditors.

A prepaid card is a simple way to keep your settlement money out of your traditional bank account while still being able to use it as your family needs. Be aware, however, that some prepaid cards come with fees and have balance limits. Furthermore, some retailers and companies do not accept prepaid debit cards.

Maintain Careful Records

It is critical to, maintain careful financial records as the recipient of a personal injury settlement in Texas. Properly documenting your settlement money can create a paper trail that will allow you to easily prove how you spent the financial compensation later.

Keep records of where the settlement money came from, when you received your check and exactly how you spend the money. Keep an organized folder with all bills, receipts, and invoices connected to payments you made with your settlement check.

Work With a Personal Injury Attorney

If you are in a difficult financial position, you may find yourself subject to wage garnishment from creditors. By law, your personal injury settlement is protected from seizure by creditors. It is important, however, to take steps to ensure the protection of your settlement money, just in case.

An attorney can help you protect the money you won from a defendant in a personal injury lawsuit. A personal injury lawyer in San Antonio, Texas can take steps to protect your settlement from creditors and prevent settlement garnishment after the resolution of your claim. Discuss your individual case in more detail with an attorney today for more information.

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