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Several previous posts have been about the use and effectiveness of a letter of protection. To my surprise, letter of protection still remains the most searched term of this blog. I have wondered in previous posts how people could be aware of the term, yet not know what it was or how to get one.

In brief, a letter of protection is a document produced by an attorney to a billing group, usually a medical provider, promising the provider they will be paid from the proceeds of a settlement, and asking they hold the client's bill in credit until paid. The key factors are first, an attorney-client relationship, and second a willing billing agent.

To my knowledge, only an attorney can issue a letter of protection. The letter of protection is a contract. The contract places a lien on the settlement and the provider must be paid before the client can receive any money. Since nobody else is a party to the settlement negotiations or the contract between the attorney and the client, only the attorney has the power to issue such a letter. The letter of protection is a contract formed is between the billing agent and the attorney. If the attorney fails to pay the billing agent from the settlement, the billing agent can seek to collect from the client and the attorney. If you don't have an attorney, the billing agent will not accept a letter of protection, because there is no new contract created. You already owed for the bill, so a letter of protection is meaningless. Whether a billing agent will accept a letter of protection or not is up to them. As I've stated in previous posts, some providers such as hospitals typically will not accept a letter of protection.

I have seen situations where billing sources not related to the care of the injuries that are being negotiated want a letter of protection. Most reputable attorneys will not agree to issue a letter of protection for a bill unrelated to the case they are working. If an attorney issues a letter of protection for, say as car payment or some other unrelated bill, the attorney is making himself a quasi-creditor of the client, and the attorney is pre-spending a settlement they don't have yet. By issuing such letters the attorney risks promising so much of the settlement away that it will be impossible to close.

In proper practice, a letter of protection is only issued to medical providers who treated the client for the injuries that are the basis of the case. If you have been injured and have billing companies asking you to get them a letter of protection, you need a lawyer. Contact one, and see if your they are willing to take your case. If so, letters can be issued to save your credit rating, get the collectors off your phone, and let you get on with life.