The Effect of Child Support Liens on Personal Injury Settlements for Car Wreck Claims

You should understand how a child support lien on a personal injury settlement may change your compensation before you consider it entirely yours. If you’ve been hurt in a car wreck and pursue a personal injury claim, you may already understand that health insurance liens and subrogation interests, rights of repayment, and healthcare provider liens can all take a bite out of your settlement. But one matter people forget to consider is a child support lien.

All states, including North Carolina, have the ability to assert a lien against your personal injury claim if you also owe back payments for child support. While your medical provider and health insurance liens are paid back first, child support liens come out of your own share of the personal injury settlement or jury verdict. Some states are willing to negotiate liens, and others are not.

It’s critical to understand how a personal injury settlement is factored into child support, including your base income. If you have questions about what is required or you’ve received a notice of a lien and need clarification, don’t guess—speak to an attorney about your rights. Many states will hold you in contempt if you settle a car accident claim without paying back what you owe for child support from your settlement.

The North Carolina Department of Health and Human Services (DHHS), which runs the state’s child support program, uses data collection and tracking systems to discover when a non-custodial parent who owes backpay has filed an insurance claim as a beneficiary or personal injury victim.

The custodial parent may also report this information to the child support caseworker. The DHHS agent or custodial parent may then petition the court to apply a lien on the settlement.

Most liability insurance carriers also run a background check to determine whether you have a child support obligation and may not agree to release any funds directly to you until the lien is resolved.

There’s no law limiting how much a child support agency may take from a personal injury settlement to pay back the obligee, but North Carolina requires the personal injury settlement to be equal to or in excess of $3,000 to attach a lien.

After personal injury liens and subrogation interests are paid, the balance of the personal injury settlement, if it reaches $3,000, could be used as repayment on owed child support. On one hand, this can be a good way to quickly catch up on payments, but it can also cause hardships in other areas.

If a non-custodial parent is up to date on their obligation, a child support lien cannot be placed on their personal injury settlement.

There are a lot of pitfalls when it comes to liens in general, and child support liens are no exception. Let us help you navigate these legal processes to maximize your settlement. Miller Law Group attorneys offer 50 years of expertise and experience in over 100 jury trials. Contact us today for a free consultation—we’ve got your back.