Most every client I have ever represented will tell you my favorite expression: "It isn't how much money you settle for that is important; it's how much you get to keep."
This article is devoted to helping you keep the very most possible amount of your personal injury settlement, as well as to answer some of the most commonly asked questions we receive about settlements.
A) Is it taxable?
You should always consult your tax advisor on all issues pertaining to taxes. However, generally personal injury recoveries ARE NOT taxable.
B) Do I owe any of this settlement money to anyone?
To fully answer this questions there are a couple of variables that have to be considered. First, what paid for your medical care?
- If it was Medicare or Medicaid then YES.
They have a very strong lien and it is you or your attorney's obligation to get to the bottom of what they are owed. They are somewhat negotiable, but rarely will they take anything less than 70% of their stated amount expended on your behalf.
- If Health Insurance paid, then the answer is: It depends.
1. Does the policy require you to pay them back? This is called their right of subrogation.
2. Even if the health insurer has policy language that requires you to pay them back, have they put you on notice of their intent to be paid back?
3. Lastly, even if they have done everything correctly to properly preserve their right to subrogation, understand that these companies are often very negotiable as to how much they will accept less than full amount. We can often get health insurance to take 50% or even deeper cuts depending on the circumstances.
- If a Hospital was involved in your care, and there was not a payer source, it is likely that there is a hospital lien that has been recorded with the Colorado Secretary of State.
These liens are very serious and they do not even have to tell you that they recorded a lien. If you settle and fail to resolve the hospital lien, they can and likely will sue you not only for the medical expenses but also for attorney fees based on your infringement of their lien. These hospitals are often quite negotiable, but you have to deal with them early after settlement. If you can help it, the time to negotiate with your hospital is NOT after they sued you.
- If your own automobile insurance paid for your medical expenses, through your MedPay coverage, then the question of whether you have to pay it back is largely a question of when your auto accident occurred.
If your collision occurred after January 1, 2009, by state statute, your auto insurance company IS NOT entitled to be paid back AT ALL from any settlement proceeds. If however, your accident was in 2008 or earlier, your insurance company would have a right to pursue subrogation.
C) Who needs to deal with these post-settlement issues?
If an attorney settles your case, that attorney should take responsibility in handling these post-settlement matters.
From my experience the quality of legal work and the tenacity in the post-settlement negotiations really separates the men from the boys. At Anderson, Hemmat & McQuinn, we look at our job, as it relates to getting our client as much of the settlement as possible, as yet another way of building good will with our clients. The amount of settlement dollars we deliver to our clients is a point of pride and even bragging rights for us.
At Anderson Hemmat & McQuinn, we recognize and live by our motto "It isn't how much money you settle for that is important; it's how much you get to keep." Let us put that motto to work for you by calling us today.