Why is There a Lien on My Personal Injury Settlement?
You are at the point in your Florida personal injury case where you can finally try to negotiate a settlement. Before your Ruskin personal injury attorney sends a settlement demand to the insurance company on your behalf, he/she schedules a conference with you to discuss the value of your case and the amount you’ll be demanding. It’s during this conference that you learn that one or more liens have been asserted against any settlement funds you may recover. Although this may surprise you, rest assured it’s not unusual.
A lien is a legal right that allows a person or entity to take part of your settlement as payment for a debt that you may owe. Liens are very common in personal injury cases when a creditor pays costs upfront for accident-related services. When this occurs, the creditor merely defers receipt of payment for the services until your case has settled.
Who Can Put a Lien on My Personal Injury Settlement?
The most common lienholders in personal injury cases include:
Health and auto insurance providers
Medical providers (hospitals, doctors, etc.)
Medicare, Medicaid, Veteran’s Administration
Workers Compensation insurance provider
Liens with these entities usually arise when accident-related medical treatment has been provided. Although you typically would not have to repay these entities for routine medical treatment, if you’re able to recover from someone else (the at-fault party) for the cost of medical services paid relating to the accident, they will require reimbursement. However, if you don’t recover for these costs, you typically will not have to repay these debts (we will talk about doctor’s liens in a moment).
While the above-listed entities are the most common lienholders in personal injury cases, it’s important to note that anyone can put a lien on your personal injury case, as long as you agree to it. A good example of this is with a legal funding loan. There are companies out there that will loan money to people who have pending personal injury claims. They loan money to the injured person with the express agreement that they will get repaid out of any settlement or recovery. This then becomes a lien on the personal injury case. In addition, although very rare, we have even seen similar agreements involving such things as rental payments owed to a landlord, auto mechanic debts, etc. While we understand that people can suffer financial hardship after an accident, we do not recommend entering into agreements for non-accident related debts. The insurance company will not take these debts into account when they value your claim.
What is a Letter of Protection?
After an accident, many people cannot afford to pay for their medical treatment. Maybe they don’t have health insurance, or they simply can’t afford the copays and deductible associated with their treatment. When this happens, there are doctors who are willing to treat injured victims under what is called a letter of protection (LOP). An LOP is an agreement between the injured person and a healthcare provider wherein the doctor agrees to provide treatment and defer receipt of payment for the medical services until the case has settled or otherwise resolved. This then becomes a lien on the case. However, unlike a health insurance lien, if there is no recovery in the case, the injured person is still responsible for all amounts owed to the medical provider under the LOP.
If you have questions about your Florida accident case, you can download our Free Reports:
5 Medical Mistakes That Will Destroy Your Personal Injury Case
which are available at our website, or you can click the link provided. You can also contact us at (813)419-3866 to talk directly to a Ruskin personal injury attorney now.