Section 32 Settlement Check

Previous | Next
 rated by 0 users
Latest post Mon, Mar 16 2009 11:32 PM by The Insider. 2 replies.
  • Fri, Mar 6 2009 4:42 PM

    • LIMAMA
      Consumer
    • Top 50 Contributor
    • Joined on Tue, Jun 10 2003
    • Posts 1,542

    Section 32 Settlement Check

    Since it appears that we are finally getting to the end of this long process, I am worryed about how my Mom will cash her settlement check once she receives it. She has no bank account, and I can't open one for her for fear of creditors swooping down and freezing the account (this lump sum is the only asset she will have). I could put it in my bank account to clear, but I'm not sure my bank account would allow it. And due to the amount, I don't think a check cashing place is viable.

    Could I ask our lawyer to insist that the check be a bank check, a cashier's check, or a check making me the payee on Mom's behalf, or even a direct deposit into my account? Mom is 75, in poor health, living on SS and a puny pension. She is not trying to defraud anyone, if the settlement was large enough I would try to negot with these creditors, but it's not. She desperatley needs an operation (doesn't have anything to do with her injury), and I am trying to do what is best for her.

    Or is that a Worker's Comp settlement is not subject to a creditor's levy, which means she could open a bank account to deposit the check. I had this problem once before when a creditor froze my account because I deposited her SS check in my account (different bank).  I got the money back, but not before several checks bounced.

     

  • Fri, Mar 6 2009 5:33 PM In reply to

    Re: Section 32 Settlement Check

    "Since it appears that we are finally getting to the end of this long process, I am worryed about how my Mom will cash her settlement check once she receives it. She has no bank account, and I can't open one for her for fear of creditors swooping down and freezing the account (this lump sum is the only asset she will have)."

    Unless her creditors already have judgments, they won't be able to "swoop and freeze".

    "I could put it in my bank account to clear, but I'm not sure my bank account would allow it."

    I'm not sure.

    My bank wouldn't take a two party endorsement when my sibs and I tried to deposit a check made out to my mother's estate when the executor endorsed it. We had to open an estate checking account and then disburse funds from it.

    You could always just have your Mom endorse the check and you take it to your bank and try to deposit. Worst that can happen is the bank says no.

    "And due to the amount, I don't think a check cashing place is viable."

    And you probably wouldn't want to pay the fee.

    "Could I ask our lawyer to insist that the check be a bank check, a cashier's check, or a check making me the payee on Mom's behalf, or even a direct deposit into my account?"

    You could ask, and he could insist, but I doubt if the WC would issue the check in anything but the claimant's name.

    "Mom is 75, in poor health, living on SS and a puny pension. She is not trying to defraud anyone, if the settlement was large enough I would try to negot with these creditors, but it's not. She desperatley needs an operation (doesn't have anything to do with her injury), and I am trying to do what is best for her."

    Unfortunately, that's not going to make any difference with how the check is made out. 

    "Or is that a Worker's Comp settlement is not subject to a creditor's levy,"

    I don't see an exemption for WC settlements in the exemption statute. Take a look:

    http://caselaw.lp.find...

    "which means she could open a bank account to deposit the check. I had this problem once before when a creditor froze my account because I deposited her SS check in my account (different bank).  I got the money back, but not before several checks bounced."

    Does that mean she already has judgments against her?

    If yes, then opening an account in her name could be a problem.

    One thing occurs to me. When the lawyer gets the settlement will she have to endorse it over to him so he can deposit it into his trust account to get his share, then write a check to her for her share?

    If yes, you might see if the lawyer will make the check out to you. He probably won't but it's worth asking. And if he doesn't, maybe you can get him to write several smaller checks that might be more easily deposited in your bank with two-party endorsements.

     

     

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Mon, Mar 16 2009 11:32 PM In reply to

    Re: Section 32 Settlement Check

    The issue of creditors and comp payments can be confusing. A creditor (other than child support) can not file a lien against your comp payment. They can not legally even know if you have a claim. But once you actually get the money, they can not file a lien against the carrier to get whatever money you have received from the settlement. But once it is in a bank account, they can sue to get it.

    But you do have an alternative. In some cases, §32 settlements are not done through a lump sum payment. They are given out in weekly, bi-weekly, or monthly amounts, often deposited into a special checking account, for a fixed period of time until the entire settlement is paid out. And in such cases, should the recipient return to work or die, those final payments are still due. When you open the account, you can get the power of attorney for the account and, in effect, have control over the small weekly payments that are transferred into it. Or you can arrange for a large initial payment with the balance to be paid out over time so that you can get the up-front money you need for the operation but keep the rest coming into slowly.

    Equally important is that the settlement itself, in fact the existence of the settlement, is confidential and the comp carrier is not allowed to share that information with anyone.

    I am not a supporter of hiding money from a creditor but there are some laws that can protect someone like your mother. If your comp attorney can not help you, and they may not be able to as ths is another area of expertise, you may have to seek legal advice elsewhere.

Page 1 of 1 (3 items) | RSS

My Community

Community Membership New Users: Search Community