NEW ORLEANS, LA — Can your child support debt be seized from your personal injury settlement? If you are a non-custodial parent with a pending lawsuit or settlement, it’s important that you are current on all child support obligations. Federal law classifies personal injury settlements as assets subject to seizure in cases of child support delinquency; therefore, if you are behind in your child support, your settlement will be seized to settle your obligations. In the past, custodial parents who are owed support would have to appeal to Child Support Enforcement to collect on a settlement. Today, this process is automatic.
When a non-custodial parent goes into arrears on his or her child support payments, that parent’s name is entered into a statewide database. In Louisiana, this database is known as the Louisiana Insurance Intercept Database. Insurance companies register with the LIID, providing the database access to information on all individuals making claims against the insurance company. LIID computers then scan claimant information against records of child-support debtors, looking for matching social security numbers and other identifying information. When a match is found, the LIID notifies the state Child Support Enforcement Office, the insurance company, and the debtor himself. A Notice of Income Assignment is generated, which transfers the delinquent parent’s right to the settlement income to the beneficiary of the child support order. Finally, the insurance company notifies the debtor’s attorney, who must comply with the Child Support Enforcement Office and the Notice of Income Assignment. After legal fees, medical bills, and property damage claims, the remainder of your settlement will be applied to your child support debt, and you will only receive whatever funds remain after your child support debts are satisfied.
Should a non-custodial parent feel there has been a mistake, and he does not owe child support, he may file a petition to stop the income assignment. He will then be required to go before a judge, so that the court can determine whether or not the debt is valid. If the debt is proven to be valid, the non-custodial parent will also be ordered to pay for the cost of the court proceedings.
Most insurance companies participate in the LIID, and your attorney is bound by law to comply with any child support enforcement orders and liens. Therefore, it’s essential that all non-custodial parents paying child support verify that they are not in arrears on their support payments, before they file a personal injury claim.
If you are in doubt about whether or not child support arrears can affect your recovery after an accident, contact an attorney at The de Boisblanc Law Firm today.