What Is a Lawsuit Settlement Lien?

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There are different ways a lawsuit lien can be placed on you and your assets. After the courts have ruled against you and issued a settlement to the plaintiff, you will be required to pay the settlement or a lien will be placed on your assets.

Definition

A lien is a court order placed on your personal property for a specific amount of money owed another party involved in a lawsuit and/or settlement. Liens can be placed on anything of value, such as your home, vehicles or other valuable assets. A lien may also be put in place on future government refunds or payments, until the settlement has been paid in full.

Court Orders

For a lien to be placed on an individual, you must go through the court system and file suit against the other party. You may be able to file a claim for a car accident, personal injury case or other lawsuit resulting in a settlement. A lien may be put in place if the judge has ordered the settlement in your favor and the defendant has no alternative method to pay you the full amount of the settlement.

Personal Injury

If you have been involved in an auto accident or other personal injury case, and have been found at fault, the courts may issue the other party a settlement. If you do not have any insurance or cannot pay the full amount of the settlement, a lien may be put in place. The lien remains on your assets until you either sell the property or pay the settlement. Funds from the sale of the property go to paying off the settlement before anything else.