Detailed Answer
Under Vermont law, several liens can reduce the net proceeds of your personal injury settlement. You should identify each potential lien early and negotiate or resolve them before finalizing your recovery.
1. Medical Assistance (Medicaid) Liens
If you received Medicaid benefits for treatment related to your injury, the State of Vermont has a statutory right to reimbursement from your settlement. See Vt. Stat. Ann. tit. 33, § 2048 (link).
2. Medicare Liens
If Medicare paid for your medical care, federal regulations require you to reimburse Medicare out of any personal injury recovery. See 42 C.F.R. § 411.20 (link).
3. Workers’ Compensation Subrogation Liens
If you received workers’ compensation benefits for an on-the-job injury, your employer or its insurer can seek reimbursement from your third-party recovery. See 21 V.S.A. § 664(a)(2) (link).
4. Child Support and Alimony Liens
The Office of Child Support can place a lien on your settlement to satisfy past-due support. Vermont law authorizes this under 15 V.S.A. § 155 (link).
5. Federal and State Tax Liens
If you owe back taxes, the IRS can file a Notice of Federal Tax Lien under 26 U.S.C. § 6321 (link). Vermont may also file a state tax lien under 32 V.S.A. § 3202 (link).
6. Attorney’s Charging Lien
While Vermont law does not create a statutory lien for attorneys on personal injury cases, courts recognize an equitable charging lien. This lien secures your lawyer’s fees and costs from your recovery when you and your attorney agreed to contingency-fee representation.
7. Medical Provider Liens by Contract
Providers may require you to sign an assignment of benefits or a lien agreement before treatment. Those contracts allow them to collect directly from your settlement. Always review any document before you sign.
Identifying all liens early helps you negotiate reductions or payment plans. Failing to address a lien can delay your distribution and expose you to lawsuits.
Helpful Hints
- Compile a List: Track all entities that paid your medical or living expenses.
- Request Payoff Statements: Get written payoff amounts for each lien holder.
- Negotiate Reductions: Many providers will reduce their lien in exchange for prompt payment.
- Budget for Reimbursement: Factor liens into your net recovery when evaluating settlement offers.
- Consult Early: Talk to an attorney about potential liens before you finalize any settlement.
Disclaimer: This article does not constitute legal advice. It provides general information about Vermont law. Consult a qualified attorney to discuss the specifics of your case.