How a Lien Can Affect Your Injury Settlement

If you’ve been injured in an accident, whether it was a car crash, a fall on someone’s property, or an instance of medical malpractice, you have the right to file a personal injury claim to seek compensation for your losses. Along with the legal considerations, you may want to think about a potential lien on your judgment or settlement. Your lawyer from Gritton and Gritton PLLC can explain what a lien is and how it could impact your recovery. To understand how injury settlement liens work, let’s start by defining it.

What Is a Settlement Lien?

When a third party, like an insurance company or hospital, is owed money after an accident where a personal injury claim is filed, they can use a lien to get their funds. A lien is a hold placed on the money that has or will be awarded at the end of a personal injury claim. When a company has a lien against your settlement, they can take all or part of your awarded money before you ever see it.

Liens arise when the injured person does not have the money to pay for treatment. Despite your financial situation, you are entitled to medical care, but it is your responsibility to pay for the care you received, either out-of-pocket or via a lien.

State laws determine how long a private insurance company must administer a lien on your injury claim. Your lawyer can negotiate the lien amount, and an experienced attorney will likely be able to reduce that amount.

Parties That Can Hold Liens

Certain entities are more likely to hold liens on personal injury cases. The most common parties include:

1. Health Insurance Carriers: Healthcare providers are some of the most common personal injury settlement lien holders. If you, as the injured party, do not have health insurance or your health insurance does not cover all of your medical bills, healthcare providers will look to recover the medical expenses with a settlement lien. Depending on the situation, a partial lien could be possible. Sometimes, liens are created by prior agreement. The agreement is typically signed by the injured party and their lawyer and is USED to pay back the healthcare provider with funds from the settlement or final court judgment.
2. Medicaid and Medicare: Applicants are required to assign their payments for medical care from a third party to the state. When Medicaid has paid for medical bills, the state must be paid. To ensure payment, it will impose a lien on the settlement.
3. Auto Insurance Carriers. When a car insurance policy provides medical payment coverage, the insurance company may be entitled to reimbursement from a settlement for payments exceeding $5,000.

Personal injury claims can be hard to navigate. To maximize your settlement and have the best chance at recovery, it’s essential to consult a personal injury attorney.