What are Liens and How Will They Affect Your Personal Injury Settlement?

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Many people are surprised when they learn that in certain situations, a third party may have a claim against your personal injury settlement. These third parties may include health insurance providers, health insurance carriers, workers compensation, and even the government.  This can sound scary, especially when one thinks about a lien on a car or house. Liens relating to personal injury claims, however, are standard procedure.

What is a settlement lien?

In general, a lien is an interest placed on one party’s personal property to satisfy debt owed to a third person or entity. In the context of a settlement, the personal property is a portion of a settlement award that the lien holder is asserting a right to. In a personal injury context, liens can be asserted by an entity that paid any of the injured party’s bills arising from the accident. Liens exist to help people and companies get what they are owed.

Third Party Lienholders

Third party lienholders may include, but are not limited to, the following entities:

Healthcare Providers – In many cases, the injured party does not have health insurance or the party’s health insurance does not cover all the medical bills arising from the accident. Healthcare providers will seek to recover all medical bills with a settlement lien.

Health Insurance Carrier Personal injury settlement liens may be included into the health insurance plans of certain employers. These plans create rights to assert a medical lien on the injured party’s settlement. Valid liens include government employee insurance plans, ERISA plans, and worker’s compensation.

Worker’s Compensation – If you were injured in a work-related accident, a worker’s compensation lien may be issued if your medical bills have been paid through your state’s worker’s compensation fund. Worker’s compensation laws vary by state. Therefore, it is important to check if a carrier can assert a worker’s compensation lien against your settlement.

Government Liens for Unpaid Medicare and Medicaid – Generally, if the government paid for any portion of your medical care, they have a right to get paid back if you later recover money for your injuries from another party. Depending on the specific type of government program, some government agencies have different rights when it comes to asserting a lien against your settlement.

Negotiating a Lien

Liens balances from certain types of lienholders can be negotiated down. However, negotiating liens properly can be complicated and it is in an injured party’s best interests to consult with and retain an attorney to assist in seeking lien balance reductions. This will ensure that the client’s interests are protected and that savings are maximized where possible.

A good personal injury attorney will always try to get as much money in their client’s pockets as possible. Hiring an experienced attorney can help you avoid paying high amounts of liens to third parties and better resolve your case.  

Seek Legal Assistance

If an entity asserts their lien rights, it’s important to ascertain what language in the insurance policy or applicable law gives them the right to make a claim. Lien law is very complex. An experienced attorney may find ways to reduce or even eliminate a lien. If you are injured, give Quintana Law a call for a FREE consultation at (602) 418-0733.