DOR liens and Personal Injury settlements:
If you owe past child support or have a DOR tax lien, and you are also expecting an insurance settlement, you may be in for a surprise. A law took effect on January 1, 1995, requiring any insurance company doing business in Massachusetts to deduct past-due child support payments or any Department of Revenue liens from insurance settlements over $500. These liens are deducted before the check goes to you and your lawyer.
Under this law, every insurance company is required to search a person’s name and social security number prior to releasing a check over $500. If the insurance company discovers that this person has outstanding child support payments that are past due, a lien will be placed on that settlement. At this point, the child’s guardian to whom the support is due, will receive the past-due amount directly out of the settlement and the person will receive the excess amount, if any.
If the child’s guardian was on state assistance or welfare, then the government gets the money back. As you can see, this law could greatly affect your case if you are injured in an auto accident, at work, or as a result of a property owner’s negligence.
Even thought this law has been around for years, not everyone knows about it. Your lawyer won’t know if you have a lien like this until after your case is settled. So, unfortunately the Department of Revenue can, and will, take past-due child support or taxes out any settlement. The good news is that it will pay off your lien and you will not be subject to future wage garnishment or attachment of future funds. So even if you do have a lien, it is worth pursuing your case.