Liens are used to enforce court orders and get companies or individuals to pay their debts. A lien is simply a court order that officially states that Party A owes money to Party B. But the court order is attached to the title of property that Party A owns. From that point on, the property cannot be sold, transferred or given away. If Party A does try to sell the property, Party B will be paid the money they are owed out of the proceeds of the sale.
Liens often come into play in personal injury cases, but there are different ways they can be used. A judgment lien is used to enforce your rights as the victim if you win your case. On the other hand, a lien against a settlement is used to make sure the victim gives insurance companies their fair share of the award. We’ll look at both below.
Judgment Liens
Imagine that you are hit by an uninsured motorist. You take them to court and the court awards you money for your injuries. The uninsured motorist is now supposed to pay you out of pocket—but what if they don’t? This is a case where your lawyer would likely place a judgment lien against them.
The judgment lien could be put on a car, a boat, real estate that they own or even their home (although there are often limits for putting a lien on someone’s primary residence). If they do what they’re supposed to do and pay off the money they owe you, they can have the lien removed. But if they do not, you will eventually get your money when they sell their property. This kind of lien protects you.
Liens against Your Settlement
In the example above, who paid for your medical treatment before you got the money from the uninsured motorist? You might have paid out of pocket, but you might have gotten your treatment covered by your own medical insurance. In this case, your insurance company paid for something that the other driver should have paid for. In other words, your insurer lost money.
That means that they have a right to some of the money the other driver pays you, known as subrogation. After all, if they paid $10,000 in medical expenses, they should get $10,000 of the money the driver pays you for your injuries. In this case the insurance company may place a lien against your settlement.
This kind of lien stays in place until you finally get money from the party who caused the injury. The lien then guarantees that the insurer gets their share of it.
Have you been injured? John Foy & Associates offers a free consultation with some of the most experienced and respected personal injury lawyers in Georgia. Fill out the form to your right or call us at 404-400-4000 to get your FREE consultation today.