Sophisticated reply: The hospital lien instantly attaches to any settlement or insurance coverage proceeds, and chapter does NOT discharge that lien.
Usually, your insurance coverage proceeds/settlement are exempt, or protected from collectors (and the chapter trustee) underneath Utah regulation. See
Utah Code 78B-5-505 (1)(a)(x) “A person is entitled to exemption of… proceeds of insurance coverage, a judgment, or a settlement, or different rights accruing on account of bodily harm of the person or of the wrongful loss of life or bodily harm of one other particular person of whom the person was or is a dependent to the extent that these proceeds are compensatory.
Nonetheless, earlier than you file chapter, your hospital collectors have a chance to file a “hospital lien,” which is a lien or declare towards these insurance coverage monies.
Under, I’m going to cowl the hospital lien statute in a bit extra depth and provides a current Utah chapter case coping with when the lien attaches.
Hospital Lien Statute (Utah Code 38-7-1):
The hospital lien attaches mechanically, however is simply perfected after:
- medical providers are offered
- discover of the lien is given
- the lien is then perfected when verified written discover is filed within the state district court docket the place the hospital is situated, and
- the discover of lien have to be despatched by licensed mail to the individual/events chargeable for the accidents and to the insurance coverage service.
Actually, the hospital can good its lien after you file chapter. Submitting chapter does NOT eliminate their lien, and their perfection of that lien does NOT violate bk regulation.
Now what in the event that they haven’t even offered discover of the lien earlier than submitting chapter? I’m undecided. Somebody goes to need to take that argument earlier than the chapter court docket.
The US Chapter Court docket for the District of Utah lined this problem in In Re Cloward, 608 B.R. 759 (Financial institution.D.Utah 2019) right here.
