Liens are legal claims against personal property, used to secure a debt. A residential mortgage is a common type of lien. A lien claim might be a part of your case if you have a large amount of debt stemming from the accident and you cannot pay it out of your own pocket. This is particularly common with debts for medical care. If this is the case, the hospital or other medical provider that you owe money to can eventually put a lien on your settlement, or on your home or other property. Liens make it difficult to sell or otherwise make changes to the property.

Resolving lien claims can be difficult because of the many complex laws that apply to them, and because holders of lien claims are often slow to respond in writing to questions about their liens. Unfortunately, the law does not always say that lienholders are required to respond to requests for a lien amount within a specific time, and it sometimes takes months to get an appropriate answer. This delay prevents prompt payments of settlement funds to clients like you, and can be frustrating for you and your lawyer. Your law firm should work hard to obtain this information and resolve these issues, so that the settlement can be distributed and you can resolve your case.

For example, if Medicaid or Medicare has paid health care providers for treatment you needed because of your accident, they are entitled to reimbursement of those payments. To ensure that they are paid, they may place a lien on your settlement. Your lawyer will probably have to hold back a part of your settlement equal to the debt until you can negotiate an agreement and pay the agency.

When multiple insurers or debts are involved, this can become quite complex. For example, you might run into complicated lien problems when you have your own private insurance (including a settlement from a personal injury case) but are using Medicare as a secondary insurer. When it is not certain whether Medicare is a primary or secondary insurer, Medicare will make a conditional payment. If it is later determined that some other party was responsible for that payment, Medicare is entitled to a refund from that party, or from you or the health care provider, if one of you was paid by that party. The federal government may place a lien on your property to recover this type of conditional payment. (It might also be entitled to make a subrogation claim against your settlement.) Again, your settlement funds cannot be distributed until you reach an agreement and pay Medicare.