Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
When you resolve a personal injury claim in New York, various parties may assert liens against your settlement to recover expenses they advanced on your behalf. Understanding these liens helps you and your attorney allocate net proceeds correctly. Common liens include:
1. Hospital Liens
Under New York Lien Law Article 50 (Lien Law § 80–§ 86), a hospital that treated you for injuries may file a lien against any recovery for reasonable charges. The lien applies to suits, settlements, or judgments and takes priority over most other claims.
2. No-Fault Insurance Liens (Auto Accidents)
In motor vehicle accidents, New York’s No-Fault Law (Insurance Law § 5102) provides Personal Injury Protection (PIP) benefits. Insurers pay certain medical bills and lost wages, then have subrogation rights to recover what they paid from your settlement.
3. Health Insurer Subrogation
Private health insurers and government programs such as Medicare or Medicaid often have contractual or statutory subrogation rights. For example, Medicaid can claim reimbursement under Social Services Law § 104-b. Federal law (42 U.S.C. § 1396a(a)(25)) obligates state Medicaid programs to seek recovery from third-party settlements.
4. Workers’ Compensation Liens
If your injury arose out of employment, the New York Workers’ Compensation Board can assert a lien for benefits paid (WCL § 29). The board’s lien attaches to third-party recoveries.
5. Attorney’s Charging Liens
Under New York Judiciary Law § 475, your attorney automatically holds a charging lien on any settlement or judgment to secure payment of fees and costs. The lien survives discharge and binds the client’s recovery.
6. Judgment Liens and IRS Liens
Creditors with a valid judgment against you may record a lien in the county clerk’s office under CPLR Article 52. Similarly, the IRS can impose a tax lien under 26 U.S.C. § 6321, which may attach to settlement funds.
Each lien has its own notice, filing requirements, and priority rules. Your attorney will investigate every potential claim to ensure net settlement funds are distributed correctly.
Helpful Hints
- Notify your attorney of all medical providers, insurers, and benefits programs that paid on your behalf.
- Review lien statements carefully; challenge amounts that look excessive.
- Negotiate reductions—hospitals sometimes settle liens for less than full billed charges.
- Understand priority: hospital liens and No-Fault subrogation often outrank private judgments.
- Keep detailed records of all payments and correspondence regarding liens.