What Types of Liens Commonly Apply to a Personal Injury Settlement in North Carolina?
North Carolina Personal Injury Liens: What You Need to Know
Detailed Answer
After a car collision, fall, or other accident, your net recovery can shrink because third parties claim a right to be repaid from the settlement. In North Carolina, the most common liens fall into seven categories:
Medical Provider and Hospital Liens
North Carolina gives doctors, hospitals, and ambulance services an automatic lien on settlement proceeds under N.C. Gen. Stat. § 44-49 and § 44-50. Key points:
The lien covers reasonable charges for accident-related care, but only up to 50 % of your net settlement (after attorney fees and costs) unless the provider agrees to accept less.
Providers must furnish medical records and itemized bills within 30 days of request to perfect the lien.
Health Insurance Subrogation
Private health insurers often reserve contractual rights to reimbursement. North Carolina follows the made-whole doctrine, but federal law can pre-empt this rule for self-funded ERISA plans. Always review the policy language to confirm whether the plan is fully insured (state law applies) or self-funded (federal law applies).
Medicaid (NC Medical Assistance) Liens
The Department of Health and Human Services may claim reimbursement for accident-related payments under N.C. Gen. Stat. § 108A-57. By statute, Medicaid’s recovery is capped at the lesser of:
One-third of the gross settlement, or
The total Medicaid payments for accident care.
Medicare Conditional Payments
Under 42 U.S.C. § 1395y(b), Medicare must be repaid in full for accident-related payments, though waivers or reductions are possible when hardship exists. Failing to resolve a Medicare lien can trigger double-damages against both the injured person and the insurer.
Workers’ Compensation Liens
If the injury happened on the job, the workers’ compensation carrier receives a statutory lien under N.C. Gen. Stat. § 97-10.2. The North Carolina Industrial Commission may reduce or extinguish the lien if fairness requires, but you must petition the Commission before settlement funds are distributed.
Child Support Liens
Past-due child support can be intercepted from lump-sum settlements under N.C. Gen. Stat. § 110-136.4. The county Child Support Enforcement agency can issue a legal notice to the insurer or your lawyer requiring payment of arrears before you receive the balance.
Attorney’s Lien for Fees and Costs
North Carolina recognizes an attorney’s charging lien on settlement proceeds for agreed fees and reimbursable costs. Your lawyer must satisfy or compromise all other valid liens before disbursing funds to you.
Priority Rules
In most cases, attorney fees and costs pay first. Statutory medical, Medicaid, and workers’ compensation liens then share the remaining funds, followed by any contractual or child-support claims. Negotiation is critical because many lienholders will accept less than the face amount when presented with limited insurance proceeds.
Helpful Hints
Tell your attorney about every health-care plan that paid your bills so that hidden liens do not surface months later.
Request medical bills and records early; providers cannot assert a statutory lien until they comply with § 44-49.
Keep copies of Explanation of Benefits (EOBs) to match charges with payments—this helps dispute duplicate or unrelated items.
Update Medicare’s Benefits Coordination & Recovery Center online; failure to report can delay settlement checks.
If multiple liens exceed available coverage, negotiate proportional reductions or seek a court order allocating funds.
Bottom Line
Liens can drastically change how much money you actually receive after an injury. Clear identification, verification, and negotiation of every lien must happen before you sign a release.
Call to Action
Unsure which liens apply to your case—or how to reduce them? Our North Carolina personal injury attorneys have years of experience protecting clients’ recoveries. Call us today at 919-313-2737 for a free, no-obligation consultation.
