Will a Personal Injury Settlement Affect Child Support?

Child Support and Personal Injury Settlements

According to the Bureau of Justice Statistics, plaintiffs win just over half of all civil lawsuits in the U.S.

Perhaps you have just received a personal injury settlement, or maybe you are anticipating one. If so, you might be wondering how this settlement will impact your child support payments.

When the courts award child support, the amount reflects both the needs of the child and the resources available to the parents. When new resources become available—in the form of a personal injury settlement, for instance—the court may adjust your child support payments to account for this new income.

So, settlements might change child support payments, but not in all cases.

The Reason for the Settlement Counts

One of the primary intended uses for a personal injury settlement is to pay for medical bills. For this reason, many injured parents do not find themselves in a position where a settlement leads to more income. If there are documented medical expenses to meet, this money cannot be earmarked for child support.

Sometimes, though, settlement payments compensate the plaintiff for lost wages. When this occurs, the matter becomes of interest to the court. The court may reason that the plaintiff now has more resources available to support themselves. Logically, this money could also be used for child support.

Each case will differ.

Regular Payments vs. One-time Payments

Sometimes, a personal injury settlement is made as a one-time payment. In many states, one-time payments are not included in child support calculations. These payments can include gambling winnings, gifts, and personal injury settlements.

The logic underpinning this is that the parent is not reasonably expected to gain or win that amount at predictable, regular intervals. As such, it is unreasonable to expect them to pay additional amounts at those same intervals.

This scenario can play out differently when the settlement is intended to cover lost income the parent would have earned had they not been out of work recovering from accident-related injuries.

The Court Evaluates the Child’s Needs

Usually, a court does not order one parent to pay a portion of their personal injury settlement to the other parent without first examining the needs of the child and applying the child support formula.

In many states, separate formulas exist for parents with very high incomes. These sometimes apply temporarily when one parent obtains a substantial settlement.

The court has one overarching goal: to ensure the child has access to the same resources as they would have had if their parents were still married. The final court order should reflect the child’s best interests above all else.

How Child Support Orders Change in Line With New Income

You will find that child support payments vary from state to state. Every state utilizes a different formula to determine the income of both parties, as well as the needs of the children concerned. Typically, child support payments decrease as a percentage of income as the parent earns more.

Child support will normally account for the number of overnight stays each parent has with the children.

In some situations, the court does not have to follow the standard child support formula.

Ultimately, each case will play out differently, and there is no guaranteed way to predict what a court will do in any given situation.

If you have or anticipate a personal injury settlement and you either pay or receive child support, you should consult an experienced family law attorney. They will help you evaluate your case and present your issues favorably to the judge.

When a personal injury settlement is intended to compensate the victim for lost wages, that portion of the settlement can be considered income for the purposes of child support.

The court aims to accurately determine the resources available to the parent paying child support when calculating a child support award.

Once a settlement is reached or the suit is resolved at trial, the insurance company issues a check to you and your attorney. This check will be sent to your attorney’s office. Once your lawyer receives the check, they will deposit it into an escrow account. The funds can then be disbursed.

In addition to any child support liens, your lawyer will also pay all other fees and liens from the proceeds of your settlement check. These can include:

• Expert witness fees
• Unpaid medical bills
• Attorney fees
• Court costs

Once all fees and liens are paid, you keep the remainder of your settlement.

Remember that personal injury settlements can influence current child support obligations and impact future calculations. Speak with your attorney to determine whether your settlement will affect your income and the money available for child support as you move forward.

The timeline of personal injury cases varies substantially, with checks sometimes issued in as little as one month, though they can often take months or even years. If your attorney needs to negotiate liens, this can delay the process. If you are facing a lengthy lawsuit, personal injury lawsuit loans may be able to help. Call us today or apply online for a no-obligation consultation.