Are personal injury proceeds protected?

Auto_AccidentsI often respond to questions posed by anonymous individuals on www.avvo.com. Recently, someone asked the following question:

In NC, can a Credit Card Co with a judgement against you lien or garnish an accident injury settlement paid to you?

Here is my response:

In NC, proceeds received from a personal injury (“PI”) settlement are exempt from execution except as to medical providers who provided services related to the injury for which the settlement was obtained. So, to answer your question, your son’s PI settlement check is protected from the credit card judgment creditor. However, make sure that he deposits the check to a separate account. If the PI funds are commingled with other funds then they may no longer be exempt. Also, the PI funds lose their exempt status once they are used to purchase other assets. Any assets that he purchases will be exempt- or not- depending on the type of asset he purchases. Your son should discuss this situation with an attorney.

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