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When Can a Lien Be Put on Your Personal Injury Settlement?

You've won your personal injury lawsuit, which is fantastic. But it turns out you still have some bills to pay, and perhaps to some people you didn't expect. If those bills go unpaid, creditors, insurance companies, or medical providers may try to secure a "lien" against your settlement. A lien is essentially a legal attachment to your property, saying you owe a debt to someone else, and liens against personal injury awards can mean those debts can be paid out of your personal injury settlement first.

So here's what you need to know about liens in personal injury cases:

Pre-Settlement

It's best to get a handle on possible liens before you settle your personal injury claim. There could be statutory liens where state or federal laws require you to pay back Medicare, ERISA health insurance plans, the Veterans Administration, or workers compensation insurance plans from your settlement amount. Or, there could be contractual liens that arise from private insurers or medical providers.

If these bills haven't been paid or resolved at the outset of your case, they will still be there waiting after you settle, even if your injuries were someone else's fault. You and your attorney should work to figure out which bills have been paid and which remain outstanding. Not only will this help in determining the value of your personal injury claim, it will make sure any and all possible lien holders will be compensated. You may even want to keep lien claimants in the loop during settlement negotiations.

Post-Settlement

Once you've settled your personal injury claim, you'll want to reach with the lien claimants, confirm that you've an agreement. After that, you and your attorneys should make sure that any and all creditors, medical providers, and insurers are paid promptly and confirm the payment is the full and final satisfaction of any claim they may have arising out of your case.

The sooner potential lien claimants are identified and paid, the sooner you can get on with your life, and the less chance you'll have liens placed on your personal injury award. This kind of work is best left to the professionals, so talk to a local personal injury attorney about your settlement today.

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