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. The claims process is complex. Along with the standard considerations, you may also need to think about a potential lien on your judgment or settlement.
If you’ve never heard about this concept before, there’s no need to worry. Your Chicago personal injury attorney from Thomas Law Offices 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 just what a lien is.
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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, the owed entity can use a lien to get their funds. A lien is a hold placed on money that has or will be awarded at the end of a personal injury claim—whether the resolution is through settlement or a court judgment.
When a company has a lien against your settlement, they can take all or part of your compensation before you ever see it. You’ll know if a lien is being held over your settlement when you or your lawyer is served with a notice.
Liens arise when the injured person does not have the money to pay for treatment. Despite your financial situation, you are entitled to the medical care you need, but it’s your responsibility to pay for the care you received, whether out-of-pocket or via a lien.
State laws determine how long a private insurance company has to administer a lien on your personal injury claim. Your lawyer has the ability to 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 in personal injury cases. The most common parties include the following:
- 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.
- Medicaid and Medicare. Medicaid applicants are required to assign their payments for medical care from a third party to the state. If you’re in an accident and do not pursue a claim while you are on Medicaid, the state has the ability to pursue its own claim. When Medicaid has paid for medical bills, the state must be paid from the proceeds of a case. To ensure payment, it will impose a lien on the settlement.
- 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.
How to Protect Your Personal Injury Settlement
As mentioned above, your attorney will likely be able to negotiate the amount of any liens held against your personal injury claim. For example, insurance companies rarely pay medical providers for the full amount of a bill. Instead, medical providers typically agree to lower rates in exchange for guaranteed insurance payments. Your lawyer can look into an insurance company’s lien to verify if it reflects what they would actually pay.
In the event you disagree with a lien, you have the right to contest it. It’s then up to a judge to decide if the lien against your case is valid. If there are multiple liens against your case, the judge can decide which gets top priority.
Throughout your claims process, an experienced attorney can address any liens that come up as your case moves through the system. This will ensure you receive the maximum settlement award when all is said and done.
Get Help From Thomas Law Offices
Personal injury claims can be hard to navigate. In order to maximize your settlement and have the best chance at recovery, it’s important to consult a personal injury attorney. At Thomas Law Offices, we have experience handling various claims, and we’re prepared to take your on next. To learn more, contact us today.
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