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  1. #1

    Default Is Bodily Injury Award/Settlement Funds from Accident Exempted from Garnishment

    My question involves collection proceedings in the State of:WA
    Hello everybody and Happy NEW Year. I filed my answer to garnishment/ by default judgment,claiming my bodily injury award funds (from a accident settlement) as exempted from garnishment according to RCW 6.15.010(3)(f), but judge denied it.

    i know pain and suffering is not exempted from garnishment so is that means my whole bodily injury award will be considered as a pain and sufferings. somebody please explain why judge denied my BI award fund exemted from garnishment' Thank You.

  2. #2
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    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    You just stated that your entire award was for "pain and suffering", which would appear to take it outside of the statute.
    Quote Quoting RCW 6.15.010. Exempt property.
    Except as provided in RCW 6.15.050, the following personal property shall be exempt from execution, attachment, and garnishment:
    (1) All wearing apparel of every individual and family, but not to exceed one thousand dollars in value in furs, jewelry, and personal ornaments for any individual.

    (2) All private libraries of every individual, but not to exceed fifteen hundred dollars in value, and all family pictures and keepsakes.

    (3) To each individual or, as to community property of spouses maintaining a single household as against a creditor of the community, to the community:
    (a) The individual's or community's household goods, appliances, furniture, and home and yard equipment, not to exceed two thousand seven hundred dollars in value for the individual or five thousand four hundred dollars for the community, said amount to include provisions and fuel for the comfortable maintenance of the individual or community;

    (b) Other personal property, except personal earnings as provided under RCW 6.15.050(1), not to exceed two thousand dollars in value, of which not more than two hundred dollars in value may consist of cash, and of which not more than two hundred dollars in value may consist of bank accounts, savings and loan accounts, stocks, bonds, or other securities;

    (c) For an individual, a motor vehicle used for personal transportation, not to exceed two thousand five hundred dollars or for a community two motor vehicles used for personal transportation, not to exceed five thousand dollars in aggregate value;

    (d) Any past due, current, or future child support paid or owed to the debtor, which can be traced;

    (e) All professionally prescribed health aids for the debtor or a dependent of the debtor; and

    (f) To any individual, the right to or proceeds of a payment not to exceed sixteen thousand one hundred fifty dollars on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or the right to or proceeds of a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor. The exemption under this subsection (3)(f) does not apply to the right of the state of Washington, or any agent or assignee of the state, as a lienholder or subrogee under RCW 43.20B.060.
    (4) To each qualified individual, one of the following exemptions:
    (a) To a farmer, farm trucks, farm stock, farm tools, farm equipment, supplies and seed, not to exceed five thousand dollars in value;

    (b) To a physician, surgeon, attorney, clergyman, or other professional person, the individual's library, office furniture, office equipment and supplies, not to exceed five thousand dollars in value;

    (c) To any other individual, the tools and instruments and materials used to carry on his or her trade for the support of himself or herself or family, not to exceed five thousand dollars in value.
    For purposes of this section, "value" means the reasonable market value of the debtor's interest in an article or item at the time it is selected for exemption, exclusive of all liens and encumbrances thereon.

    (5) Tuition units, under chapter 28B.95 RCW, purchased more than two years prior to the date of a bankruptcy filing or court judgment.

    We have no access to the pleadings, court arguments, judge's decision, or anything about your case beyond what you tell us.

  3. #3

    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    Sorry MR Knowitall, for the confusion. I didn't meant to say that my entire bodily injury award was for pain and sufferngs. WHAT i Mean to say that I allready have read those RCW 6.15.010 (3)(f) AND I know that I can not claim pain and sufferings as a exempt money, but my boddily injury award money is rxmpted from garnishment according to RCW 6.15.010(3)(f).

    So I claimed it in my exemption claim along with my social security money diposited in the bank in the same accounts in which money was sitting for 5 yrs. But the plaitiff agreed that he can see that those social securty funds direct diposits from the government from last six months and bodily injury award funds from last five years were sitting in that accounts but objected it to prove the funds deposited and withdrawl were the exempted funds, that means each and every transactin I made in last five years was exempted money. Ii is very hard to prove/ trace the money from last 5 yrs unless (cpa) accountant's help. So the judge has denied my exemption claim and gave me 10 days time for reconsideration if I can prove that the money they took was exempted.

    My argument is that, my average minimum balance had never gone below the the balance of exempted money I have deposited in my bank since last five years that means my exempted mony was sitting in my bank since last five years in other words I never touched/withdrawn that money from my bank .

    So that is my exempted money which they have garnished, so I claimed my exepted money and the judge denied my claim. Is my argument is unacceptable? If I hire a accountat to prove it, its gona cost me a lot. so please help me with your advice. Thank You.

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    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    So the issue is that you've been putting non-exempt money into the account and taking it out over a period of years, and when your claimed exemption was challenged by the creditor the court ordered that you demonstrate why the funds should still be treated as exempt as opposed to representing the non-exempt funds that were flowing in and out of the account over a period of years? That's not an infrequent result of the commingling of funds. That's a pretty typical consequence of commingling. Money is fungible, so arguing, "The exempt money went in first and thus the current balance should automatically be treated as exempt" is unlikely to persuade the court.

  5. #5

    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    Good Morning Mr Knowitall, I will try to explain with an examplele similar to mine. For instent,

    I started my RETIREMENT FUNDS as a SELF EMPLOYED Five Yrs ago AND I deposited $10,000. EXEMPTED MONEY(that include bodily injury money from accident settlement and Social Security FUNDS) IN MY BANK accounts with $40,000. NON Exempt MONEY. I spend all my $40,000. NON Exempt Money IN 5 YRS and left $10,EXEMPTED Money sitting there. In 5 YRS My average balance never go below that $10,000. EXEMPTED MONEY.

    Finding my self in CRITICAL situation I Withdraw $3000 EXEMPT MONEY from my bank as a cash to use in case emergency leaving $7000. EXEMPTED MONEY there but I put it back(deposited) after emergency gone, making $10,000. again as a EXEMPTED MONEY in my accounts. Now creditor took all my $10,000. EXEMPTED MONEY through GARNISHMENT. Will the judge accept this argument/motion. I have all my bank statements (few missing) from last 5 yrs as a evidence to support my claim. THANK YOU
    ,

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    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    What sort of retirement account are we talking about? Retirement accounts such as IRA's, 401K's, etc., are normally exempt from garnishment, whatever the source of the money they contain.

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    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    two things come to mind.

    1. how do you prove the $3k you put back in was the same money? How do you determine that the money you withdrew (the $40k) was non-exempt money and you left the exempt money in the account? That is exactly what Mr. K was speaking of with the commingling of funds. You cannot say this $1 bill was from the exempt money deposits and this other $1 bill is from the non-exempt money. Once you commingle exempt and non-exempt funds, you cannot clearly define which is which.


    2. since this was a settlement, how do you determine any of it was BI? Unless specified, it is neither BI or P&S payments. It is simply a settlement to cause you to release your claims for BI and P&S.

  8. #8

    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    THANK YOU MR Knwitall for quick Response.
    I DON'T have any of the above mentioned accounts. Since, last 20 yrs i'm working as a self emplyed I have saved my retirement money in the form of my personel savings/checking and CDs accounts. I didn't have any knwledge before until after I FACED this kind of problem, that how to open above mentioned accounts.

    Quote Quoting jk
    View Post
    two things come to mind.

    1. how do you prove the $3k you put back in was the same money? How do you determine that the money you withdrew (the $40k) was non-exempt money and you left the exempt money in the account? That is exactly what Mr. K was speaking of with the commingling of funds. You cannot say this $1 bill was from the exempt money deposits and this other $1 bill is from the non-exempt money. Once you commingle exempt and non-exempt funds, you cannot clearly define which is which.


    2. since this was a settlement, how do you determine any of it was BI? Unless specified, it is neither BI or P&S payments. It is simply a settlement to cause you to release your claims for BI and P&S.

    Q 1. MY ANSWER IS, I am saying this in a sworn affidavite under perjury ,that the left over money is EXEMPTED, with a EVIDENCE (copy of my bank statements) in the support of my exemption claim, throwing the ball to the plaintiff to prove with EVIDENCE that the money I have in my accounts is NOT EXMPTED.

    Q 2, ANSWER is. The money I received from attorney in the form of check written "BODILY INJURY" on the check, which I have deposited in my bank. thank you.

  9. #9
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    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    Q 1. MY ANSWER IS, I am saying this in a sworn affidavite under perjury ,that the left over money is EXEMPTED, with a EVIDENCE (copy of my bank statements) in the support of my exemption claim, throwing the ball to the plaintiff to prove with EVIDENCE that the money I have in my accounts is NOT EXMPTED.
    You are missing the point. There is no way to determine what money was left in the account. Once it is commingled, it is simply money in the account. They have just as valid of an argument that the first $10k you took out was the settlement money. Neither is provable.

    Then you obviously took out $3k. You might claim you never spent that $3k but simply redeposited it but how is anybody to know? Pulling $3k in cash, in the possibility of a need is a really poor position. You are asking the court to believe you thought you might need the $3k (in cash no less) so you took it out and put it under your mattress. Then when you realized you didn't need the $3k (in cash), you went and redeposited it back into your account. Unless those were marked bills or the serial numbers recorded, I doubt you will get anybody to believe that story.






    Q 2, ANSWER is. The money I received from attorney in the form of check written "BODILY INJURY" on the check, which I have deposited in my bank. thank you.
    that takes care of that then.

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    Default Re: Is Bodily Injury Award/Settlement Funds from Accident is Exempted from Garnishmen

    Insurance awards for bodily injury are exempt from income tax. Are they exempt from garnishment in WA? That is the primary question. If they are, then you would have to prove the money taken was the same money. Civil cases of any sort are based on a preponderance of the evidence, but the law has to agree with you in the first place. The fact you were keeping the money for retirement is immaterial. You screwed yourself in that regard by keeping the money in a standard bank account rather than a real retirement account. You also screwed up getting sued in the first place and losing that civil action, so you rather did it to yourself.

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