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Is a Personal injury settlement reduced because of a child support lien or an IRS lien?

West Palm Beach, FL |

In Florida, if I have a lien against me for back-owed child support and/or an IRS lien, are funds from a personal injury lawsuit settlement subject to those liens? Do I need to tell my personal injury attorney that I might have an outstanding child support or IRS lien? If I do have a lien, how will it effect my settlement from the PI case?
What types of liens, if any, can be deducted from a personal injury settlement?

Thank you.

I used to be a personal injury paralegal years ago, and when I wrote settlement statements for clients, I never remember looking around for IRS/child support type liens to deduct from a client's settlement, just medical liens and subrogation from health insurance. How do IRS and/or child support liens come to the surface? Is that something the PI attorney or the Insurance Adjuster looks for? Thank you for your time.

Attorney Answers 3

  1. Best answer

    Yes. A lien can be placed on the proceeds from your personal injury settlement for child support and taxes. Some of the liens that can be deducted from a personal injury settlement are liens for medical bills incurred as a result of the accident, liens from companies that advance money to those expecting personal injury settlements, child support, taxes, Medicare liens for payments made towards the medical bills as a result of the accident, health insurance liens for payments made towards medical bills incurred as a result of the accident.

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  2. Yes, you need to advice your attorney because they can put a lien against the money you receive. Hope that's helpful

  3. We have had these situations arise before for Personal Injury matters our firms have handled. Generally, the liens come directly from the agencies to our firm. Under some situations, the lien holder's name is added to the check for the proceeds of settlement from the BI or UM carrier if the insurance company is notified.

    If you have been notified of the lien by the agency, then you have to advise your attorney. Your attorney may then be able to negotiate down these liens, which we have done successfully before on behalf of clients as well.

    The lien itself should not affect your ability to settle the matter, but will have to be resolved and cleared before the proceeds of settlement can be distributed to you, at least those amounts liened. You should speak with your personal injury attorney about this matter since he or she would be in the best position to advise and assist you regarding this issue.

    Please note that the response above is solely based on the information provided in the question, and limited to in scope to that content. This answer does not qualify or should be construed as legal advice, but rather information to enable to individual to understand what infomation may be discussed with an attorney consulted for potential engagement to assist the posting party with their legal matter. This response does not consistute legal advice, legal advocacy, or constitute an engagement with the attorney or firm to which has answered this inquiry.

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