Worker’s Compensation and Bankruptcy

Are benefits from worker’s compensation protected from bankruptcy?

Florida Statutes section 440 provides for the exemption of worker’s compensation claims or benefits.  

Courts have held that this exemption for worker’s compensation benefits applies whether the benefits are to compensate for lost wages or for present or future medical expenses. 

Section 440.22 clearly states that:

Workers compensation benefits shall be exempt from all claims of creditors, and from levy, execution and attachments or other remedy for recovery or collection of a debt, which exemption may not be waived. However, the exemption of workers’ compensation claims from creditors does not extend to claims based on an award of child support or alimony.

To add to that, steps taken by bankruptcy trustees and judgment creditors to seize those funds because they have been deposited into personal savings accounts has been rejected by the courts.

The Florida Supreme Court rejected that argument in Broward v. Jacksonville Medical Center, 690 So.2d 589 (Fla. 1997)].

Note it is recommended that such funds be placed in a separate account just to avoid any complications and that worker’s compensation funds not be comingled with personal funds.

Have questions regarding bankruptcy? Looking for a fresh start? Contact attorney Alex Hernandez for a free initial consultation.

Attorney Alex Hernandez

Representing clients in the areas of Chapter 7 Bankruptcy, Family Law/Divorce, and car and motorcycle accidents for 20 years. (904) 712-5565 or (305)-688-LAWS (5297). *Se Habla Español

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