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If you have been injured in an accident due to someone else’s negligence, you can file a personal injury claim against that negligent party to recover monetary compensation for your damages. Nonetheless, you’ll be burdened with proving that your injuries were caused directly by the other parties’ negligent actions. If you can satisfy the burden of proof, you may be entitled to significant compensation. However, certain parties may impose a lien to be paid out of your settlement. It is imperative to be aware of any liens that may be placed on your settlement proceeds, as they can reduce the amount of money that you receive for your damages. Please continue reading to learn how they work and discover how a competent New Jersey Personal Injury Lawyer can help you secure the fair compensation you deserve.

What is a lien on a personal injury settlement?

A lien is a legal claim that allows a third party to take all or some of your settlement proceeds. Essentially, it is a debt that must be paid out of your personal injury settlement to reimburse those that rendered services to you for your injuries. In some cases, a lien is imposed because the law requires that certain debts be reimbursed. For instance, if your health insurance is a self-funded ERISA plan that covered your medical costs from the accident, under Federal Law, there will be a lien on your settlement. Additionally, government-based benefit programs such as Medicare and Medicaid may have paid for some of your medical expenses. If this is the case, statutorily, the government must be paid from your settlement proceeds to ensure they are paid. Nevertheless, in other cases, you may have signed a lien agreement stipulating you must reimburse those that rendered services out of your settlement.

Who can impose one?

Only certain third-party entities can legally impose a lien on a personal injury settlement. One of the most common sources of liens is those imposed by healthcare providers. If your health insurance does not cover the total cost of your medical bills resulting from the accident, to obtain the necessary treatment and services, you typically will have to sign a lien agreement. This contract ensures that their expenses will be reimbursed from your settlement proceeds. As mentioned above, government-based benefit program providers and private insurance providers can also impose liens. Furthermore, workers’ compensation insurance providers can also put a lien on a personal injury settlement. If an insurer covered the costs of your medical expenses and your lost wages, they have the right to recover at least 2/3 of the money they paid for your injuries.

It is critical to note that in some cases, an experienced lawyer can negotiate the terms of a lien in your favor. However, companies that impose medical and health insurance for liens are not required to accept lower payments for their liens. That said, it is in your best interest to retain the legal services of a seasoned New Jersey personal injury lawyer at the Falcom Law Firm today. Our firm is prepared to help you negotiate a lower payment for your liens.