Many people pursuing a personal injury settlement may start to wonder about outstanding financial obligations and how they will be handled once that settlement is agreed to and paid out. And if you are in arrears in your child support payments in Tennessee, you are justified in your concerns. This is because a non-custodial parent, who has been ordered by a court to pay child support and is currently in arrears, may have their settlement garnished in order to fulfill their support obligations. But it isn’t quite that simple, so let’s take a look at the details.
Child Support 101
Modification of Child Support
As you likely already know if you’ve gone through the process before, child support amounts are decided by the courts using child support guidelines. These guidelines arrive at an amount based on the needs of the child and the income of the parents. So it follows that if the income of one parent increases significantly, the amount of support needs to be adjusted – but it doesn’t happen automatically. After the initial order of support is adjudicated, if the income of the parent paying support increases significantly enough (by at least 15%), the payee must file a motion to modify child support with the court. A hearing will usually be held wherein the court looks at the revised income of each parent, plugs the new numbers into the child support guidelines worksheet, and determines a new child support payment amount based on the current numbers. This is the new support obligation that will be in effect until the child reaches 18 or until a new modification request is filed.
An arrearage – as it pertains to child support – is an amount by which the payor parent is behind in their support payments. Arrearages have been known to get extremely large, particularly if the payor parent attempts to hide or avoid their obligation entirely.
So let’s say that Tom and Marcia got divorced, and Tom was ordered to pay child support in the amount of $100 a week for the support of their child, Manny. Then, Tom finds himself having a very hard time making those payments. And instead of doing something proactive, he moves 4 states away and tries to avoid detection so that he doesn’t have to pay his support obligation. In this situation, it is likely that Marcia will go to court and file a motion to enforce child support, and it is also likely that she will be granted an enforcement order that will be outstanding until Tom can be located and made to pay.
Now, in the meantime, Tom gets hit by a careless driver and wins a settlement in the amount of $400,000. What happens now? His weekly income has not increased, so no modification is necessary. But there is an enforcement order out there stating that he must pay the amount that he is behind. Now let’s say he is behind by $20,000 by this point. What happens?
General Wage Garnishment in Tennessee
In order for most creditors to receive wage garnishment from a debtor, they must file a lawsuit, get a judgement against the debtor in court, and then they can get an order for wage garnishment so that the judgement can be fulfilled. However, it is different for child support.
Child support arrearages are one of the few things that do not require a judgement from a court to be garnished from your wages. Instead, when original child support orders are entered into the court record, they include a child support income withholding order that can be used in the event that the payor parent falls behind in payments. The income withholding order is all that is necessary, and the payee parent does not need a judgement to seek arrearages.
But when you get a one-time settlement, how does that factor into child support and wage garnishment? The settlement is a one time payment and does not increase weekly or monthly income, so a permanent modification is not appropriate. But what is?
Personal Injury Settlements and Wage Garnishment
Under our state laws, any personal injury settlement is regarded as property, and any property can be seized to fulfill a past-due child support obligation. Basically, the state has ways of forcing parents to pay their child support. Tennessee (and most states) take a parent’s responsibility to care for their children very seriously. So if you are in arrears, they can put a child support lien on your property (i.e., the settlement) and send notification of the lien to you and your lawyer. You will likely get something in the mail informing you that you are in arrears in your child support, and this should prompt you to call your attorney to find out the details. Your lawyer can discuss the specifics with you, but ultimately they are obligated by law to authorize payment of the arrearage amount to the custodial parent before releasing the remainder to you.
So in our example above with Tom and Marcia, what happens? Generally speaking, as long as an enforcement order is in place before Tom’s lawyer dispurses his money, Tom’s lawyer will be obligated to garnish the settlement by sending $20,000 of it to Marcia to fulfill Tom’s child support arrearage. Now there are exceptions to this general rule, so speaking to an attorney is critical.
Talk to an Experienced Lawyer
If you have a personal injury settlement coming and have questions about how that will affect your child support obligations, it is in your best interest to contact a knowledgeable lawyer at Batson Nolan PLC. They will be able to assess your case and help you figure out what part, if any, of your settlement will need to go to fulfill your support obligations. Call us today, or contact us online to set up a free consultation in our Clarksville or Springfield office. We look forward to helping you!