The “Big Four” Types of Liens Against Personal Injury Settlements and Judgments

A lien is a claim or encumbrance on property for payment of some debt, obligation or duty.  In New Jersey, there are four types of statutory liens that can be legally enforced against personal injury settlements and judgments.  They are (1) Medicare/Medicaid liens; (2) Workers’ Compensation liens; Healthcare Insurance liens under the Employee Retirement Income Security Act (“ERISA”); and Liens for unpaid child support.

It is important that your personal injury attorney understands the nature and operation of these liens when negotiating a settlement on your behalf, and that all potential lien holders are notified of the personal injury matter.  Liens may be disputed and/or reduced under certain circumstances, resulting in a larger net recovery by the personal injury plaintiff.  Unpaid liens can result in significant fines, and do not simply go away after conclusion of a case.  It is thus imperative that you and your attorney identify any potential liens against the recovery in your personal injury lawsuit at the outset of the case.