Understanding How Liens Impact Personal Injury Settlements in New Jersey

You’re so close — you’ve been hurt and suffering, and now, you’re so close to receiving a settlement that will cover your damages. But a scary thought pops into your head:

What will happen to my settlement if I have a lien placed on it?

It’s a great question with a complicated answer. Read on to learn more about how liens impact personal injury settlements in New Jersey. And if you want personalized guidance, reach out to the team at Rosengard Law Group today.

What Is a Personal Injury Lien?

A lien is a legal claim by a third party — like a healthcare provider, insurance company, or government agency — against the settlement or judgment you receive from a personal injury case. These entities may have provided services or benefits related to your injury and seek reimbursement from your settlement.

For example, if your insurer covered some of the costs to treat your injuries, they may place a lien against your personal injury settlement. When you receive your settlement, some of that money will go toward reimbursing the insurer. 

Personal injury liens can allow you to obtain services that you may not be able to afford. But they also impact personal injury settlements in ways that prevent you from using all the money you receive.

Types of Liens in Personal Injury Cases

Some common types of liens in New Jersey personal injury cases are as follows:

• A medical lien. This is when you must pay your medical bills with the money you obtain from your personal injury settlement.
• An attorney lien. This is when you have to pay your lawyer with the money you obtain from your personal injury settlement.
• A creditor lien. This is when you pay a creditor with the money you obtain from your personal injury settlement.
• An expert witness lien. This is when you are forced to pay a creditor with the money you obtain from your personal injury settlement.
• A government lien. This is when you must pay what you owe the government with the money you obtain from your personal injury settlement.
• A car repair lien. This is when you have to pay for your car repairs using the money you obtain from your personal injury settlement.
• An insurance lien. This is when you need to pay for your insurance expenses using the money you obtain from your personal injury settlement.

Other types of liens in personal injury cases exist. But the liens above are some of the most common in NJ personal injury cases.

How Liens Impact Personal Injury Settlements

Liens can impact personal injury settlements in several ways:

• You may receive considerably less money from the settlement.
• You may need to give most of the settlement to another party.
• You may experience delays and complications due to the lien holder’s actions.
• You may be unable to control the funds obtained from the personal injury settlement.

A good example of the above is as follows: You receive a settlement of $20,000. But you have to give $10,000 of this settlement to your doctor to pay for the treatment you received after your injury. Now you only have $10,000 left.

Handling a Lien

Three ways to handle a lien are as follows:

1. Ask your attorney to negotiate with the lien holder. In some cases, they may be able to reduce the amount of the lien, meaning you receive a larger share of your personal injury settlement. 
2. Ask your lawyer to ensure that the lien placed against your settlement is valid. Don’t automatically assume that a lien is valid just because you received a letter about it. Mistakes and manipulations can and do happen.
3. Calculate how much of your settlement you will be able to keep after the lien is paid off and make plans to work with that amount of money. It can be helpful to manage your expectations in these kinds of situations.

You don’t have to work with an attorney to recover a personal injury settlement or navigate a lien against your settlement. But many people in your situation find that an attorney can help them not only maximize their settlement, but minimize the impact of the lien they are facing.

Facing a Lien Against Your NJ Injury Settlement? Call Us 

A lien can severely impact the personal injury settlement you receive. And when you’re facing lost wages, medical bills, pain and suffering, and more, that can cause severe problems for you.

Fortunately, an attorney can guide you through the lien payment process — perhaps even negotiating with the lien holder for a reduced amount. Ready to learn more about your legal options? Rosengard Law Group is ready to hear from you. Give us a call at 856-284-6446 or contact us online to schedule a free consultation today.