A lawyer working with the words, "Can a Lien Affect My Personal Injury Settlement?"

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When you have been injured in an accident, whether it is a car accident or work injury, you have the right to file a personal injury lawsuit against the negligent party to seek compensation for damages and medical expenses. While the process can be complicated, a personal injury attorney can help you claim the compensation you deserve. However, many individuals often do not think about the potential of a lien being placed on the judgment or their settlement. 

The dedicated personal injury attorneys at the Hernandez Law Group, P.C. have created this guide to help create a better understanding about what a lien is and how it can affect a settlement.  Here is what you need to know:

What Is a Settlement Lien?

A settlement lien is a process that insurance, hospitals, or auto companies use to get the money that is owed to them after an accident. The lien will place a hold on any money that has been or will be awarded at the end of a personal injury claim. This applies to any compensation that is awarded through a settlement or court judgment.

If a company has a lien against your settlement, they have the right to take all or part of your compensation before you get a chance to have it. This ensures that the company can get the money back that is owed to them. A notice will be served to you or your attorney if you have a lien against your settlement.

Why Would I Have a Lien Against My Settlement?

El asesor legal presenta al cliente un contrato firmado con martillo y leyes legales.

Liens are placed against an injured person when that individual doesn’t have enough money to pay out of pocket for medical treatment or to repair damages. No matter what your financial situation is, all hospitals have to provide the medical treatment you need to keep you safe and healthy. However, it is still your responsibility to pay for the care you need, whether it is out of pocket or through a lien.

A lien must be filed by the recorder’s office of the county where the hospital is located within 180 days after you are released from the hospital. The lien will need to have your proper name, address, address of the hospital, and the dates of service. If the hospital fails to do any of this properly, then the lien will be denied.

When it comes to liens from insurance companies or auto insurance companies, a partial lien may be placed to obtain the money owed to them. However, for most companies, these liens can only be applied for services that exceed $5,000. An experienced personal injury attorney can negotiate the lien amount and try to reduce it.

Who Can Hold a Lien Against a Personal Injury Settlement?

Only certain types of companies can hold a lien in a personal injury case. They are as follows:

Health Insurance Providers and Medical Providers

When it comes to liens on personal injury settlements, the most common to hold a lien are healthcare providers and health insurance companies. If the injured party does not have health insurance or their health insurance isn’t strong enough to cover all of the medical bills, healthcare providers will often use a settlement lien to recover the expenses for the treatment.

In some cases, either the insurance provider or the healthcare provider will present a lien agreement to the injured party and their lawyer before the settlement or the final court judgment. In these instances, the attorney can attempt to argue for a partial lean instead of having the injured party responsible for paying back the full amount owed or even a full release of lien in some circumstances.

Medicaid and Medicare Companies

Couple talking to a lawyer about filing a wrongful death claim

All Medicaid applicants are required to assign their payments for any third-party medical care to the state. When you are in an accident and decide not to pursue a claim against the negligent party, the state has the right to pursue its claim against the negligent party. This is because Medicaid has paid for the medical bills and the state needs to be paid back. This often comes from the proceeds of the case. Whether you or the state pursues compensation, a lien will be placed against the settlement.

Auto Insurance Carriers

When a car insurance policy provides medical payment coverage, the insurance company will be entitled to reimbursement from the settlement. However, the payments must exceed $5,000 for them to have the right to put a lien on the personal injury settlement.

Need Help Negotiating the Lien On Your Personal Injury Settlement?

A personal injury attorney will be able to help you negotiate the amount of the liens that you may  be facing. The dedicated attorneys at the Hernandez Law Group, P.C. can look into insurance company’s liens and check to see if they paid a lower rate to medical providers. If this is the case, we can argue to lower the amount of money that is being placed on the lien to reflect it with what they paid.

Many individuals feel like they can not contest a lien, but it is your right to do so. We work with our clients so that they understand their legal rights and we work to ensure the best outcome for them. If you need help with a personal injury case or negotiating a lien against your personal injury settlement, our team can help! Contact the Hernandez Law Group today for more information on our services or to schedule a free, no-obligation consultation.