How Liens Work In Personal Injury Settlements

28 August 2015
 Categories: , Articles


The main reason you will hire a personal injury attorney after a car accident is to have help collecting a cash settlement for the accident. While it may take time to receive this check, you can be certain it will come if you are not the at-fault driver. During the time you are waiting for the money, your lawyer will be working on a disbursement schedule for the proceeds. This will include many things, and it might involve liens. Here are three things to understand about liens and your settlement check.

What Is A Lien?

When you get in an accident and incur a lot of medical bills, there is a good chance you will not be able to pay these bills until after you receive your settlement check. Because of this, there may be numerous healthcare providers waiting on the payments you owe them. Each of these providers has a right to collect the money owed for the services they provide, and this is when liens come into play.

A healthcare provider can place a lien on your settlement amount to make certain that the bill will be paid. The healthcare provider will understand that there might be a long waiting period for this money, but a lien will guarantee that the bill will be paid at some point in the future.

It is not uncommon for healthcare providers to place liens on personal injury settlement cases, and your lawyer should be experienced with this issue. Your lawyer will know that liens must be paid out of settlement money before anything else, except for legal fees that might be part of the settlement.

Are Liens Final?

You should also realize that once a lien is placed against your settlement, there are very few ways to get around paying it. In other words, liens must be paid; however, there are times when liens are not accurate.

One task your personal injury lawyer will work on during the case is verification of all liens against the case. When healthcare providers place liens on settlements, they must legally notify the lawyer handling the case. This gives the lawyer an opportunity to look into the bills to make sure they are accurate.

It is important for your lawyer to do this before the other party pays the settlement amount, simply because it can save time if there are problems with liens. For example, if a medical clinic billed the wrong amount and your lawyer can prove this, the lawyer can dispute the lien. If this can be completed before the settlement money arrives, the lawyer will only have to pay the amount agreed upon after the dispute was settled.

In some cases, lawyers will try to negotiate the amounts even when they are correct. If your lawyer is successful at convincing providers to reduce charges, you can end up receiving a larger amount in the end.

Do Liens Affect Legal Fees?

It is common for personal injury lawyers to work on contingency for their services. This means you will not pay the lawyer for his or her assistance during the case until the settlement check arrives.

Because of this, your attorney might try to negotiate with every lienholder on the case to compensate for the legal fees. For example, if the lawyer charges a 30 percent contingency fee, the lawyer should receive 30 percent of the entire settlement amount.

If the lawyer can get each healthcare provider to drop their bills by 30 percent, you will receive more money from your settlement.

It's important to understand how this works before you receive your check because otherwise you might expect more money than you are actually getting. To learn more, contact a personal injury attorney in your area.