One of the more difficult issues that can evolve during your personal injury case is a third may file a lien against your settlement. The news can come as a surprise, as you believed your fight was over after months (or even years) of litigation. Once the shock wears off, the prospect of a lien being filed against you can be downright scary, especially when you consider a lien on a house or a vehicle. However, settlement liens are a fairly standard procedure. 

What is a settlement lien?

In general, a lien is an interest placed on a party’s personal property to satisfy a debt owed to a third party or entity. A settlement lien is a property interest held by a third party against the financial compensation awarded to you in your personal injury settlement. Liens exist to help individuals and corporations receive the monies they are owed.

If you have a settlement lien filed against you, you may be required to pay a portion of your financial award to a third-party lienholder for any outstanding bills arising from the accident.

Who are third-party lienholders?

Third-party lienholders can affect the potential net recovery of your personal injury case. These entities can include but are not limited to: 

  • Healthcare Providers. In most cases, the injured party’s health insurance does not cover all the medical bills resulting from the accident. Filing a settlement lien provides healthcare providers the opportunity to seek reimbursement for all medical bills.
  • Health Insurance Carriers. Some employers included personal injury settlement liens into their health insurance plans. By doing so, the plan is designed to submit a medical lien on the injured party’s settlement. Government employee insurance plans, ERISA plans, and worker’s compensation are types of valid liens. 
  • Worker’s Compensation. If your injury was work-related, a worker’s compensation lien could be issued if your medical bills have been paid through your state’s worker’s compensation fund. It is important to check if an insurance carrier can submit a worker’s compensation lien against your settlement as laws vary by state. 
  • Government Liens. If any portion of your medical care was paid via Medicare or Medicaid, the government has a right to be reimbursed if you recover money for your injuries from a third party. Under the Medicare Secondary Payor Act (MSP), Medicare should not pay medical bills when payments are made via third-party insurance plans or policies.

Negotiating a Lien 

Many times, balances from certain third-party lienholders can be negotiated down. If you choose to go this route, it’s in your best interest to consult with and retain an attorney experienced in lien balance reduction as the process can be complicated. An attorney will also help minimize the amounts of liens paid to third parties and seek case resolution. 

Our firm has spent more than 35 years fighting for people just like you. At Hudgins Law Firm, you’ll find an attitude that takes no case lightly and attorneys that understand the importance of building relationships with our clients. To set up a FREE consultation, call us toll-free at 800-950-5534, or complete the contact form on our website. If we can help you, we will.