Personal injury lien | Why liens on personal injury settlements?

Why are their personal injury liens on settlements?

by | Nov 9, 2016 | Blog

Most people do not realize that when they are injured in a car accident or most accidents for that matter, there are various liens that attorneys are legally obligated to pay out of your settlement or jury verdict. Most people have health insurance and if your health insurance company pays any of your medical bills from your accident, then they have a “lien” on your case. In other words, a lien is something you have to pay (even though you may not think it is fair) to a company who has paid out medical benefits on your behalf. This is by federal and state law and if you ignore these liens, you will be in big trouble and can definitely be sued for not paying the lien.

For example, let’s say you are in a car accident and you go by ambulance to the local Emergency Room. You also have health insurance with say Anthem Blue Cross/Blue Shield. So, the billing department asks for your health insurance policy number and files a claim for your bills with Anthem. Anthem then pays their part of your ambulance and ER bills. As soon as they pay any part of your medical bills, they instantly have a “lien” on any recovery you get against the at-fault driver’s insurance company. You cannot ignore this lien and must always think in the back of your mind that there will be liens such as this which must be paid from your settlement monies, that is the law!

Let’s say you have Medicaid or Medicare. It is the same situation and they have a lien on any recovery you get against the at-fault driver. In some cases, a good attorney can negotiate these liens and pay back less than the total lien, thus putting a little more money in your pocket. Again, these liens are very dangerous and if you ignore these liens, you will be sued in court. Also, attorneys have an ethical and legal obligation to search and pay back all liens on your case. If an attorney ignores the lien, he can lose his license to practice law. Thus, attorneys are very responsible for making sure all your “liens” are repaid out of any settlement. Of course, if there is no settlement, then the liens disappear as there is no recovery to base the lien upon.

A personal injury lien is very similar to a contractor or carpenter who does work on your house. If you do not pay this carpenter, then he will have a lien and will file a lien with the proper agency in your city. This lien, if not paid, will gather interest and start to increase in value. If you try to sell your house without paying the lien, then it will not be possible to sell your house. The lien is recorded and in order to sell your house, you must pay the lien or negotiate the lien as the buyer cannot receive clear title to your house.

It is very similar in personal injury cases. Doctors, hospitals, chiropractors, physical therapists all file liens on your case so that they will wait until your case settles and so that they are guaranteed to be paid from your settlement. In actuality, this is to your benefit for a doctor to wait to be paid until your case settles. Without lien rights, a doctor would make you pay upon each visit and this will be very expensive to you and you may not be financially able to pay $100 per visit or whatever the doctor charges per visit. This way, with a lien, the doctor will not charge you until your case is finished and settled. Again, your attorney is legally obligated to pay your doctor and medical bills out of your settlement money.

Hopefully, this explains “liens” and how they work in a personal injury case. If you have any questions, please contact me and I would be more than happy to answer any type of question involving this important topic.

Why are their personal injury liens on settlements? Colorado Springs Personal Injury Attorney

What is a lien in a personal injury settlement? A lien is a payment you or your attorney are required to make in a personal injury case.