What Liens Are Paid Out of a Car Accident Settlement?

liens paid car accident settlement

YouTube video

When dealing with a car accident settlement, you’ll have to pay out for liens. Knowing what liens are is crucial to know how your money is distributed once you get your settlement check. If you have more questions about liens, call us today, and we’ll help you.

Continue reading this guide to learn what liens are paid out in a car accident settlement in Colorado Springs, Colorado:


I’m Jake Kimball. I’m one of the owners at Springs Law Group, and I want to talk to you about liens and which ones you can expect that would need to be paid out of a settlement if you’ve been in a car accident.

First of all, let’s talk about what a lien is. A lien is if you think of a mortgage, a mortgage is a lien against your house; it has to be paid off if you sell your house or you’re going to refinance. So the same thing is true with a settlement; there are liens against the settlement that must be paid out before you get any money.

The primary liens that you’re going to see are hospital liens. So that’s because the first place someone goes is the ER or the urgent care. So if they go to the ER, it’s a hospital, it’s hospitals entirely paid back, if your health insurance doesn’t pay them off, or doesn’t pay him at all, then that hospital may have a hospital lien, which needs to be paid off at settlement.

So then you’ll also have liens if you have Medicaid, Medicare Veterans Administration benefits, or TRICARE. So those are liens dictated by federal statute; you need to pay them back. You don’t have a choice. A lot of people are upset at that. Because they say, well, for example, if it’s TRICARE, you know, I thought my health insurance was free. Well, you don’t have to pay a premium for it, but you do have to pay them back. If they pay for anything related to the accident, you have to pay them back.

Same with Medicare and Medicaid, even though you might think it’s an entitlement program where you don’t have to pay for the premium. However, you do have to pay them back out of settlement; you don’t have to pay them back for all the treatment they paid for. You pay them back for all the treatment they paid for related to the accident.

So if, for example, you have a knee issue that you’ve been treating for years and you get some treatment for that, well, you don’t have to pay that back because that wasn’t the accident; that’s from a chronic condition. So you don’t have to pay back stuff related to the accident.

Then you have a private lien. So private liens would be like health insurance, so your health insurance is entitled to be paid back. So Anthem, Humana, or Cigna, any of those folks, that those companies that pay for treatment related to your accident will want to be paid back.

Then you can have contractual liens. So those are liens where you say to the treatment provider, hey, I would like you to pay for treatment out of this treatment related to this accident, and in exchange, I’ll agree to pay you back out of the settlement. So that’s an excellent way to get treatment if you don’t have health insurance, so that’s a contractual lien where you have agreed to do it as opposed to a statutory lien like hospital liens or TRICARE or Medicare, whereas the statute says you got to pay them back.

Either way, whether it’s contractual or statutory, you got to pay it back out of the settlement. It’s not optional. You get sued if you don’t, and no one wants to get sued. So those are the types of liens you’ll need to be aware of if you have a personal injury settlement.

Now that you know the different types of liens, you will know who needs to get paid after you receive your settlement check. Of course, give us a call today if you have more questions about liens or your specific case.

Find more helpful resources: