What Are Liens and How Will They Affect My Settlement?

You may have many unpaid bills and debts after an accident in Omaha. It is common for an accident victim not to have the means to pay for expensive medical treatments and property repairs out of pocket. This can result in liens, or legal claims to a portion of your settlement. 

What Is a Lien?

A lien is a claim placed on something that you own by a creditor. A lien gives the creditor (also known as a lienholder) the legal right to take the property in question if you fail to repay your debt. If there is a lien against your vehicle, for example, a creditor can retain ownership of your vehicle and sell it to pay off your debts if you don’t make a payment by the deadline. Liens are often part of an agreement to purchase an item, such as a vehicle or home. Liens can also be part of a legal action.

Common Types of Liens in Personal Injury Cases

It is possible to have a lien against your settlement or judgment award in a personal injury case. The most common type is a medical lien, brought by a hospital or health care provider to pay for an injured accident victim’s medical costs. In many cases, a hospital will pay for the costs of an injured accident victim’s care upfront and seek reimbursement from another party later, such as the patient’s health insurance company.

The party that pays for your medical care may make you sign a lien agreement before treating you. This document states that you agree to pay the health care provider back, either out of your own pocket or out of a settlement achieved with a personal injury lawsuit. It also gives the health care provider the right to take a part of your settlement to pay off your medical debt. You may also be able to provide a letter of protection from an attorney promising the health care provider a portion of your settlement if the provider offers care.

Other types of liens that may be involved in a personal injury suit include a Medicaid or Medicare lien, a Veterans Affairs lien, a mechanic’s lien, a private insurance provider lien, and a workers’ compensation lien. You may also encounter a judgment lien if someone wins a lawsuit against you. If you are found liable for someone else’s injury, that person may become a lienholder if you cannot pay the full amount of the settlement or judgment award upfront.

How Are Liens Paid?

If there is a lien against your settlement or judgment award in Nebraska, it will be paid before you can keep the remaining amount of the award for yourself. First, your lawyer will file your personal injury claim and fight for the financial compensation that you deserve for losses such as your medical expenses, property damage, lost wages, and pain and suffering. If your personal injury case is successful, the defendant will have to pay for your injuries and related losses.

Before you can keep a settlement or judgment award, however, you will be legally obligated to pay off any outstanding liens. Priority typically goes to a medical lien to pay off your health care debts. Then, the remaining amount of your award will pay off any other liens and debts, as well as paying your attorney. Only then will you be able to keep the remaining award – usually the amount awarded in pain and suffering.

Can You Negotiate Liens Down?

Yes, it is possible to negotiate the value of a lien down. The best way to do so is with help from a personal injury lawyer in Omaha. A lawyer can assess all of the liens against your personal injury settlement and contact the creditors directly to try to negotiate the liens down to a fairer value. A lawyer can also carefully review your medical bills and other invoices for discrepancies, such as a hospital billing you for a test that you did not receive. A lawyer can take many steps to protect you against liens that maximize your financial recovery after an accident and injury.