Protecting Workers Comp Benefits from Creditors

[needinfo2012]

I need to know how to set up the bank account for my wcmsa monies so that other creditors can not try to get the monies set aside for my medical bills. any suggestions?

[ladyvol]

yes, only post question once, it pisses off viewers!

[BvIA]

I need to know how to set up the bank account for my wcmsa monies so that other creditors can not try to get the monies set aside for my medical bills. any suggestions?

Simple answer...you can't.
But no one can attach a bank account w/o court order.

[needinfo2012]

Please forgive me for posting twice, I'm not very computer savvy and after trying to post the first question I could not find it so thought I deleted it instead of posting it. I don't know how to delete this thread, but if anyone else knows how to feel free so that no one else is "pissed off".

[complwyr]

That is a great question.

It is a "trust account" in your name but held for the benefit of Medicare and therefore the Federal government, so a bankruptcy judge may well preserve it for that purpose. But I do not know the actual answer to your question.

In some states, such as NC, work comp proceeds are not subject to claims of creditors and therefore the law protects the money. Check with your state law-- you may have that statute too. Ours is in our Workers' Compensation Act. NCGS 97-21

Here is the Illinois statute on point, which I found through the links here on this site. The first sentence seems to cover your question:


(820 ILCS 305/21) (from Ch. 48, par. 138.21)
Sec. 21. No payment, claim, award or decision under this Act shall be assignable or subject to any lien, attachment or garnishment, or be held liable in any way for any lien, debt, penalty or damages, except the beneficiary or beneficiaries of a deceased employee who was a member or annuitant under Article 14 of the "Illinois Pension Code" may assign any benefits payable under this Act to the State Employees' Retirement System. The compensation allowed by any award or decision of the Commission shall be entitled to a preference over the unsecured debts of the employer, wages excepted, contracted after the date of the injury to an employee. A decision or award of the Commission against an employer for compensation under this Act, or a written agreement by an employer to pay such compensation shall, upon the filing of a certified copy of the decision or said agreement, as the case may be, with the recorder of the county, constitute a lien upon all property of the employer within the county, paramount to all other claims or liens, except mortgages, trust deeds, or for wages or taxes. Such liens may be enforced in the manner provided for the foreclosure of mortgages under the laws of this State.
(Source: P.A. 83-358.)

[BvIA]

(820 ILCS 305/21) (from Ch. 48, par. 138.21)
Sec. 21. No payment, claim, award or decision under this Act shall be assignable or subject to any lien, attachment or garnishment, or be held liable in any way for any lien, debt, penalty or damages,

IMHO....if you think this out... it pertains to payments not yet made by a carrier. Once an IW accepts a cash payment, deposits into a bank account there is virtually no way to protect those funds. An "award" by the WC court is not a C&R/cash payment.

Medicare 'recommends' a setaside arrangement, but the law does not demand a seperate account.
Medicare will apply reasonable interest and may demand attestation to those funds periodically/annually, as well as full disclosure once the beneficiary declares the MSA exhausted before they will pay benefits.