How To Use Liens To Protect Your Credit In Your Personal Injury Case


One of the downsides of a personal injury case is waiting months or years for the settlement check. While the wait will be worthwhile when you get the check, your credit may suffer in the meantime. If you want to avoid developing bad credit from the medical bills incurred from the accident you were in, you could talk to your lawyer about getting liens placed on the accounts.

What Is A Lien?

A lien is something that is normally held against someone for a debt owed, but liens can be used in two different ways in personal injury cases. If you were injured in your accident and had medical care, you would have received a bill for the care. You legally owe this money to the healthcare provider that offered the services, but you might not be able to pay the bill until you receive your settlement from the personal injury case.

This would give the healthcare provider the right to put a lien against your settlement, and the lien gives the provider rights to some of your settlement money.

What Types Of Liens Are There?

The healthcare provider that offered the services could place a lien on your settlement if they do not receive the payment within a certain amount of time, and this is the first type of lien. If this happens, you would be notified about the lien, and you would have to pay the entire bill when you receive your settlement check.

The other type of lien is one your lawyer can ask the healthcare provider for. This lien works in a way that is similar, but your lawyer will have some say in how the lien works. In most cases, a personal injury lawyer will request a lien from a healthcare provider. If the provider agrees, the attorney will ask that the healthcare provider agree not to submit the debt to a collection agency or to the client's credit report.

What Are The Benefits Of Offering Liens?

If you can prevent the healthcare providers from placing liens of their own on your bills, you will have some control over the liens that are placed on the debts. The main control you have is protection of your credit. By stating that the providers cannot put the debts on your credit report, you will never have to worry about jeopardizing your credit score from the medical bills you cannot yet pay.

If the providers place liens on their own, they may also end up reporting the debts to credit bureaus, and this could ruin your credit.

To learn more about protecting your credit through your personal injury case, talk to the personal injury lawyer that is handling your case.


25 August 2015

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