What is a Lien in a Personal Injury Case?

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If you win a personal injury case, you may notice that one or more entities have placed a “lien” on your settlement. This can seem annoying or unfair, but it is perfectly legal in many circumstances. Our Monmouth County personal injury attorneys can help you understand how a lien works, which liens are fair, and even if a lien can be negotiated.

Who Can Place a Lien on a Settlement?

If you have a lien on your settlement there are a few likely sources. Some common culprits include:

Health insurers: If you had to receive medical care after your accident, your health insurance provider probably had to pay out some money. Once you begin pursuing legal action, they realize that they can get that money back if you win. So if you get a settlement, expect your insurance provider to want a piece of it. That applies to private companies and government benefits plans.

Healthcare providers: Sometimes a hospital or healthcare provider will make you sign a lien agreement if you plan to pursue a personal injury case. They do not charge you right away, and instead agree to take the cost of your medical care out of your settlement.

Can My Lawyer Help When There is a Lien on My Settlement?

Your lawyer can continue to help you once your personal injury suit is won and there is a lien on your settlement that you have questions about. Your attorney can:

Tell you if a lien is legitimate: A few different entities do have the right to put a lien on your personal injury settlement, but some do not. Your lawyer can tell you which liens actually need to be paid off, and then they can work to get rid of the ones that are just taking your money for no good reason.

Negotiate some liens to lower them or dismiss them entirely: A health insurer or another party who placed a lien has no obligation to lower their payment, but sometimes they will through negotiation. They might prefer to get some of their money now instead of pursuing litigation to get all of it.

Will a Lien Reduce My Compensation Amount?

Unfortunately, yes. That is why you need an experienced lawyer on your side, to help you reduce the amount of the lien if possible.

Let’s say that you win $150,000 in your personal injury case. When you were injured, you received medical care and your health insurance company covered $30,000 in care. Your compensation would end up being $120,000 after paying that $30,000 lien, but your lawyer may be able to negotiate with your health insurance company. So the more effective your attorney is at negotiating, the more of your settlement you get to keep.

Talk to Our Legal Team

If you are planning to pursue a personal injury case, contact the Wilton Law Firm. We can schedule a free consultation and tell you more about your legal options. Let us put our decades of experience to work for you.