Disability Law

Weekly Wage Benefits are Exempt from Garnishment

By Jodi Ginsberg

A workers' compensation claim can result in many unpleasant changes in your life.   Besides the health issues and the stress that you have to deal with, financial problems also often arise.  Recently one of my workers' comp clients called me to say that he was very concerned that he was about to be sued for past due credit cards.  In addition, he had other debts and was receiving daily phone calls and threatening letters.

He wanted to know if he should consider bankruptcy.  As you may know, my husband, Jonathan Ginsberg, has been a consumer bankruptcy lawyer for many years and I asked him to speak with my client.   Here is what Jonathan has to say about dealing with these debt issues:

The Georgia Workers' Compensation law specifically provides that workers' compensation benefits are exempt from the claims of creditors.  This means that no judgment creditor can garnish your benefits, or levy on any funds in your bank account.   However, it is always easier to prevent a garnishment than to try and get your money back.  First, you should not co-mingle your workers' compensation funds with your spouse's money or any other money you may have.  You don't want to give a judgment creditor an angle to grab money that is not directly tied to your workers' compensation benefits.

Secondly, your workers' compensation money may not be protected from claims related to child support or taxes.  In my mind there is some inconsistency within Georgia law about this and federal law would trump state law on one or both of these issues.  If you have child support, alimony or tax claims outstanding, you should let your lawyer know.

Here is the text of a letter that you may want to send to creditors:

Dear Sir or Madame:

You have recently contacted me about a debt you allege I owe.  Please be advised that I am currently not working because of an on-the-job injury.  I am currently disabled and receiving workers compensation benefits.

Georgia law (O.C.G.A. Section 34-9-84) specifically provides that Georgia workers? compensation benefits are ?exempt from all claims of creditors.?  I deposit my weekly wage benefit payments into my checking account and I do not co-mingle these funds with any other money.    This protection will extend to any fund I might receive should I settle my workers? compensation case.

My attorney advises me that any effort by creditors to levy or garnish workers? compensation funds would be actionable.  I would therefore respectfully advise you not to take any action with regard to this debt.

To the extent that any Fair Debt Collection Practices Act rights are involved I hereby assert those rights as well.

My physicians have advised me to avoid stress and I therefore request that you or your agents refrain from contacting me by telephone.

Thank you for your attention to this matter.

I would recommend that you send this letter to registered mail, return receipt requested to all creditors and creditor lawyers that are asserting claims against you.

Full post as published by Georgia Workers Compensation blog on February 24, 2009 (boomark / email).