By Ryan C. Wood
If you were served with a summons and complaint the clock is ticking. If you want to answer the complaint and defend yourself seek the counsel of a civil litigation attorney in your area. If you just want it to go away and you have other debts as well that you cannot pay it is probably time to sit down with an experienced bankruptcy lawyer in your area. The credit card company or creditor who sued you will most likely obtain a judgment against you eventually. Once they have a judgment against you they can enforce the judgment.
The most common and convenient way for a judgment creditor to get paid or enforce the judgment is to try and garnish your wages. Of course you must be employed for your wages to be garnished.
Can Private Disability Insurance be Garnished?
In California our California Code of Civil Procedure Section 704.130 provides that disability benefits are exempt from garnishment. See below. But what about the income once it is deposited into a bank account. Well, the insurance money is then commingled with other money. It is then possible for the insurance money to be garnished. The best course of action is to have separate bank accounts so that you can always trace your private disability insurance to one account and there is no question about the source of the funds.
California Civil Procedure Code Section 704.130
(a)Before payment, benefits from a disability or health insurance policy or program are exempt without making a claim. After payment, the benefits are exempt.
(b)Subdivision (a) does not apply to benefits that are paid or payable to cover the cost of health care if the judgment creditor is a provider of health care whose claim is the basis on which the benefits are paid or payable.
(c)During the payment of disability benefits described in subdivision (a) to a judgment debtor under a support judgment, the judgment creditor or local child support agency may seek to apply the benefit payments to satisfy the judgment by an earnings assignment order for support, as defined in Section 706.011, or any other applicable enforcement procedure, but the amount to be withheld pursuant to the earnings assignment order or other procedure shall not exceed the amount permitted to be withheld on an earnings assignment order for support under Section 706.052.
How Can Private Disability Insurance be Garnished?
Like everything there are limitations to protections. If you are paid money to pay for health costs and choose not to pay the health costs, then the health provider you owe money to can obtain and judgment and garnish your private insurance benefits. Your benefits can also be garnished if you have children you must pay court ordered support to. Generally any court ordered payment can be taken out of benefits. For more information about your specific situation consult a bankruptcy attorney in your jurisdiction or state.