What is a Lien and How Can it Affect my Personal Injury Settlement?
Injuries after an accident should always be treated by a medical professional whether you have the means to pay for the services or not. However, the physician who provides the service is entitled to be paid. But it is not just medical providers who may place a lien on your settlement.
Below, the New Jersey car accident lawyers from Lynch Law Firm, PC discuss what a lien is, who can place one on your settlement and what a good attorney may be able to do to help negotiate with your lienholder. If you have more questions, give our firm a call for a free initial consultation.
What is a Lien?
In the simplest terms, a lien is the right of someone to keep possession of property belonging to another person until the debt owed has been paid or is discharged.
Essentially, what it means is that you are in debt to someone or some company and until that debt is paid that entity has the legal right to file a lawsuit against you that would either take your property or garnish your earned wages.
When there is a lien on monetary compensation from either a verdict or settlement, it means that any entities to which you owe a debt may file a lawsuit against you and a judge would require payment of said debt from the awarded sum.
Who May Place a Lien on My Settlement?
A variety of entities may place a lien on an injury settlement. Some are more common than others.
The most common lienholders in most states are healthcare providers like doctors, medical facilities and specialists. But New Jersey is a no-fault state, so your medical services should be covered by your Personal Injury Protection (PIP) if you are involved in an accident, whether you are at fault or not.
Unless your auto insurance policy is denying you coverage for your injuries or you do not have enough coverage for a service, your PIP coverage should take care of things and you should not need to deal with a lien against your settlement.
Health Insurance Companies
If coverage is being denied by your PIP insurance or your treatment needs exceed your policy limits, your health insurance provider may step in to cover the costs of your treatment. But if they cover the costs, they are entitled to recover the money owed for their services. If you cannot pay the bill, the health insurance company is probably going to place a lien on your settlement.
Medicare or Medicaid
Just like health providers, Medicare or Medicaid may step in to cover costs of treatment for injuries caused by an accident if your PIP insurance limits are not enough to cover the treatment. And just like other insurers, they are entitled to their money and may place a lien on your settlement.
One of the less common lienholders when it comes to personal injury settlements are creditors. This usually includes credit card companies, banks, the IRS or other financial institutions to which you owe money. This does not mean that just because you have a loan or a credit card that these creditors are automatically entitled to your monetary compensation. They are only eligible to file a lien against you if you have defaulted on your payments.
Can I Negotiate a Lien?
There are some ways in which a lien may be negotiated so you do not have to pay the full amount. Because most lienholders are medical service providers, you could possibly negotiate a lower rate with them since most insurance companies rarely pay the full price for a service. So, if a medical care provider places a lien on your settlement for an amount you believe is more than what the insurance company covered or would be charged if you had insurance, you could negotiate a discounted rate.
Just like most insurance companies, many lienholders may not want to negotiate with a non-attorney and could possibly give you a hard time. That is why it is important to have the right person on your side.
We May Be Able to Help
Our attorneys are prepared to fight for your interests when it comes to your injury settlement. We have vast experience negotiating not just with insurance companies but also with lienholders to try and maximize the amount of compensation in your settlement.
Have more questions? Call us today at (800) 518-0508