Detailed Answer
When you resolve a personal injury case in South Dakota, third parties often claim a portion of your recovery through “liens.” A lien gives creditors or agencies a legal right to be repaid from your settlement before you receive funds. Common liens include:
1. Medicaid Liens
If you received medical care paid by South Dakota Medicaid, the state can file a lien under South Dakota Codified Laws § 28-24-1. The lien secures reimbursement for treatment costs. The Department of Social Services must send you a “Notice of Claim” and you can request a hearing on the amount.
(See: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=28-24-1)
2. Medicare Liens
Federal Medicare covers accident-related care for eligible beneficiaries. Under 42 U.S.C. § 1395y(b) and 42 C.F.R. § 411.37, Medicare has a right of “conditional payment” and can seek repayment after your recovery. You must notify Medicare and obtain a “Medicare Secondary Payer Recovery Demand Letter.”
3. Workers’ Compensation Subrogation
If you filed a workers’ compensation claim and then bring a third-party suit (e.g., against a negligent driver), the insurer can assert subrogation under SDCL § 62-8-53. That statute lets the carrier recover benefits paid from your settlement.
(See: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=62-8-53)
4. Child Support Liens
South Dakota law allows the Office of Child Support Services to intercept sums owed to enforce child support. Under SDCL § 25-7A-65, unpaid support can attach to settlements. The agency issues a notice, and you may contest the amount in family court.
(See: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=25-7A-65)
5. Tax Liens
- Federal tax liens arise under 26 U.S.C. § 6321 after the IRS assesses unpaid tax and issues a Notice of Federal Tax Lien.
(See: https://www.law.cornell.edu/uscode/text/26/6321) - South Dakota does not impose an income tax, but property tax liens can attach under SDCL § 10-59-2 if you owe real property taxes.
6. Health Care Provider Liens
Some hospitals and medical providers assert a common-law lien when they treat you after an accident. They must give written notice of charges and may negotiate a reduced payoff. Always request an itemized bill and lien statement.
7. Attorney Charging Lien
Your personal injury lawyer typically holds a “charging lien” on your recovery to secure unpaid fees and costs. It arises by operation of law; no separate filing is required. You can review your fee agreement to confirm the percentage or hourly rate secured.
Each lien has its own priority and procedure. You should obtain copies of all lien statements, verify balances, and explore reductions when possible.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to protect your rights and handle lien disputes.
Helpful Hints
- Request lien statements in writing and review all charges.
- Meet Medicaid and Medicare notice deadlines to avoid penalties.
- Seek a “Medicare Conditional Payment” report before settling.
- Negotiate medical provider liens; they often accept less than full amount.
- Confirm your workers’ compensation carrier’s subrogation demand early.
- Check the IRS lien registry (https://www.irs.gov/businesses/small-businesses-self-employed/tax-lien-filing-certification) for federal liens.
- Keep copies of all notices and filings in one organized file.