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What is a Lien and How Can it Affect my Austin Personal Injury Settlement?

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Many claimants are surprised to learn that their settlements or court awards have been reduced by liens. In fact, many wonder what a lien even is. Better understanding the lien process can help you better protect your claim. If you have been injured by someone else’s negligence and concerns regarding a lien – or the possibility of a lien – don’t wait to discuss your claim with an experienced Austin personal injury lawyers.

What’s In This Guide

What Is a Lien?

The Legal Information Institute (LII) defines a lien this way: A security interest of legal right acquired in one’s property by a creditor. The definition goes on to share that liens typically remain in effect until the originating obligation is fulfilled, and when the obligation isn’t ultimately fulfilled, the creditor in question may have the right to take possession of the asset in question. In other words, a lien is a legal claim on an asset that is brought by a third-party, and the asset in question can be a legal settlement.

If a third-party whom you are indebted to files the correct paperwork and serves you with the appropriate notice to collect, the settlement or court award you receive in relation to your personal injury claim can be reduced by the amount involved. If the lien’s validity is properly established, the lienholder can obtain the amount represented by the lien from your compensation, and any amount that is left will then come to you.

Who Can Place a Lien?

Liens can be placed by a variety of both public and private entities, including individuals.

Government Agencies

Government agencies sometimes place liens on personal injury settlements. For example, if you are behind on your taxes, the Internal Revenue Service (IRS) may place a lien on your personal injury settlement. Medicaid, Medicare, and the Veterans Administration also sometimes place liens. It’s important to recognize that liens placed by the government tend to take precedence over any others.

Private health insurers commonly place liens on personal injury claims because claimants are often unable to keep up with the cascading medical costs associated with serious accidents. When injured claimants can’t cover their medical expenses upfront, claimants’ personal insurance providers sometimes front the bills – but ensure that they will be repaid by the responsible party by placing liens on claimants’ settlements. Healthcare providers can also impose liens.

Child Support and Alimony

If you owe back child support or alimony (called spousal maintenance in Texas) or are going through a divorce, a lien against a personal injury settlement is a possibility.

Garden Variety Creditors

If you have any outstanding debt such as in the form of bank loans or credit cards, your creditors may have the legal right to pursue payment via a lien against your personal injury settlement.

An important note about liens is that just because an entity and/or individual says that you owe them money does not make it so. If you question the validity of a lien, you may be able to contest it. At that point, it’s up to the judge to determine if the lien in question is valid. In large personal injury cases in which the damages are substantial, it’s not unusual for at least one lien to be involved.

Can a Lien Affect My Personal Injury Settlement?

Ultimately, a lien can directly affect your personal injury settlement. If a valid lien is placed against your personal injury claim’s settlement (or court award), the lien will be paid prior to you receiving any of the settlement amount, which means that the lien will come right off the top. This makes assertively advocating for the compensation to which you are entitled in your personal injury settlement that much more critical.

Your Personal Injury Settlement

Your Personal Injury Settlement

Your personal injury settlement – or court award if your claim goes to trial – will be based on the physical, financial, and emotional damages you’ve suffered as a result of the at-fault party’s negligence. In addition to property damage (such as to your car in a car or another kind of traffic accident), your losses (or legal damages) will be classified in specific categories.

Medical Expenses

Medical expenses for even a relatively minor injury can be immense, and if your injuries are serious, you could be looking at ongoing expenses (and at ongoing health concerns). Common medical expenses include:

  • Emergency treatment at the scene of the accident and emergency transportation to the hospital
  • Surgery, follow-up care, and hospitalization
  • Medical treatments, procedures, and tests from doctors, specialists, and other medical professionals
  • Physical therapy and occupational therapy
  • Rehabilitation
  • Pain management
  • Chiropractic care
  • Prescription medications
  • Home health care

[Learn More] What Happens if my PIP benefits run out in Austin, TX?

Lost Earnings

While you are receiving the medical attention that you need and are recovering from your physical injuries, you can expect to require time off from work, which typically means lost earnings. If your injuries are such that they interfere with your ability to do your job and/or to continue advancing your career, you can expect these losses to be even more considerable.

Pain and Suffering

Being physically injured by someone else’s negligence is not only physically painful but can also effect significant emotional pain and suffering that can lead to PTSD-like effects, including:

  • Increased anxiety
  • Depressive episodes
  • Severe mood swings
  • Sleep disturbances
  • Difficult concentrating
  • Accident flashbacks
  • A tendency to self-isolate

The overall damages associated with personal injury claims are often extensive, and a critical consideration of your claim is ensuring that your complete damages are well represented.

Don’t Wait to Consult with an Experienced Austin Personal Injury Attorney

If someone else’s negligence leaves you injured and you’re concerned about a lien being placed against your settlement or court award, having professional legal guidance in your corner is paramount, and the distinguished Austin personal injury attorneys at The Patel Firm are here to help. Our focused legal team understands your concerns and has a wealth of experience successfully protecting the legal rights of clients like you. To learn more, please contact or call us at 361-400-2036 today.

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