A personal injury settlement lien is quite common today. Lawsuits of this nature could last months or even years; therefore, entities and individuals waiting for compensation from a personal injury settlement may place a lien to secure payment in the future. While you wait for your settlement to be completed, you may be presented with liens.
What Are Settlement Liens?
A settlement lien is one that is placed by the court on personal property to pay a debt to a third party. In regard to a personal injury settlement, the property is the settlement compensation (or a portion that the lien holder is eligible to receive). For that third party to receive payment in the lien, they must file a lawsuit against your settlement amount with the court.
A lien may be filed by any third party that has made payments on your bills that involve the injury specifically.
Common Parties That Place Liens on Settlements
There are some parties that are more likely to place a lien on your pending settlement than others. These include:
- Healthcare Providers: A healthcare provider, such as a physician or hospital, may place a lien on the individual’s settlement. This often occurs because the party does not have health insurance, or health insurance does not cover all associated medical costs. A provider can then file a lien against the pending settlement. However, an injured party may only be able to pay part of the lien; in this case, the plaintiff’s attorney would need to negotiate a settlement with the healthcare provider on his or her behalf.
- Health Insurance: Health insurance will pay a portion of your medical costs while you are being treated for your injury. Because you are being reimbursed for those medical costs, they will want to be paid back from your settlement. Therefore, the most common lien holder is a health insurance company. Government employee insurance plans, ERISA plans, and workers’ compensation can also file health insurance liens against the settlement.
- Medicare: If Medicare has covered a portion of the medical costs associated with your injuries, they may pursue a legal claim against your settlement to ensure payment. The payments must relate to the injury specifically for Medicare to file a lien against your settlement.
- Auto Insurance: If you have medical payment coverage with your automobile insurance company, they will file a lien for reimbursement from the settlement proceeds of your automobile accident suit. However, they typically can only do so if the amount exceeds $5,000.
Protect the Future of Your Settlement
To preserve your settlement and ensure that all applicable liens are accounted for in your settlement total, contact an attorney who understands all aspects of settlement calculations. Van Sant Law, can work to ensure that you receive compensation for your injuries, but also that your liens are satisfied so that you walk away with the compensation you deserve after suffering serious injuries.