There are many types of liens that may have to be repaid from a settlement. Some are mandatory and must be repaid even if you are not notified. Others are contractual where you may have agreed to repay a lien. You should be aware of all possible liens when settling your case.

Mandatory liens must be paid out of the settlement by law. Medicare has a statutory lien under federal law and there are substantial penalties and interest if you fail to pay back Medicare. If you are a Medicare recipient, you must notify Medicare of the settlement and repay them. They will reduce their lien by a pro rata share of attorney's fees and expenses.

Medicaid has a lien under Maryland law. You must repay Medical Assistance and any other plans that offer such benefits. There are rules governing reduction of the lien for attorney's fees and they also state the lien cannot be more than 50% of the net to the client.

Workers' compensation insurance companies also have a mandatory lien. They must reduce their lien by a pro rata share of attorney's fees and expenses.

Other liens are contractual. If you have health insurance and they pay bills related to an accident, your contract may say that they can assert a lien. Their lien may not be mandatory, but if you fail to pay them they may come back later demanding their money or you may never hear from them.

If you receive medical treatment, your doctor or physical therapist may have you sign an authorization and assignment form. This requires that they be repaid at the time that you settle the case. Hospitals often have you sign these forms as well.

There is one situation where an insurance company cannot assert a lien. If your insurance company pays medical bills and lost wages under you PIP (Personal Injury Protection) coverage, they cannot assert a lien under Maryland law.

In conclusion, you must consider all liens that will need to be repaid before settling your case. Otherwise, you may be in for an unpleasant surprise later.