Settlement Checks: What Every Client Needs to Know

It’s a relief when you’ve agreed to a settlement for your personal injury case. At this point, the end of the legal phase is in sight. However, you are probably wondering when you’ll have your check and how much will end up in your pocket.

In this post, we’ll arm you with some basic information about settlement checks, dispersals, and what happens next. Of course, you should always rely on your attorney for details about your case.

In this blog post, we’ll cover:

General timeframes for receiving settlement checks
Who gets paid from a settlement check
How much money to expect from your settlement check
Payment options
Important things to know once you’ve deposited your money

When will I receive my settlement check?

In general, the insurance company will issue a check about 30 days after you’ve arrived at a settlement agreement. But this does not mean you’ll have your portion of the money that soon. There are a few steps that need to happen before your lawyer delivers your check. Those steps could add a few more weeks. Given this, it may take around 60 days from settling your claim until you have a check in hand.

You should be aware that hiccups can happen that are outside your lawyer’s control. Unfortunately, these can delay the process further. Examples include:

Insurance company or defendant delays payment
Settlement check errors, such as incorrect amount
Unexpected paperwork
Determining/negotiating final medical care amounts

Your lawyer knows that you’re keen on getting your money quickly. It’s reasonable to expect to hear from your lawyer or their team more frequently during this stage. However, please know that you can always reach out and ask for updated timeframes on your money.

How does my settlement get dispersed?

Once your settlement check arrives, your lawyer takes on crucial responsibilities. One of the most significant tasks is ensuring that all parties owed money in connection with your case are paid. This process is called disbursement, and it must be completed prior to you receiving your check.

While every case is different, here is the typical process of how an injury settlement is dispersed:

Insurance company issues the check to your lawyer on your behalf.
Your lawyer deposits the check in an IOLTA account. This is an account reserved for handling client monies and is separate from a law firm’s operational accounts.
Once the check clears, your lawyer will pay any lienholders. A lienholder is someone who paid for your medical care or other services upfront. For example, common lienholders in a motor vehicle accident include healthcare providers, hospitals, and health insurance companies.
The attorney will deduct their fee. Typically, this is a percentage of your total settlement and was agreed upon upfront.
Any other costs associated with your case are also deducted. Examples could include filing fees, copies, or hiring outside experts.
The net proceeds are paid out to you. Your lawyer should also provide a final statement that details who was paid and how much.

What amount do I get from my settlement?

You will receive the portion of your settlement remaining after attorney’s fees, liens, and other costs are deducted. As you might imagine, this can vary greatly from case to case.

Here is a hypothetical situation, to give you an idea:

Tom’s case settles for $25,000. He agreed to pay his lawyer the standard 33 1/3% fee, and his medical costs were $7,500. His lawyer paid an additional $250 in costs related to Tom’s case. Here’s how this would breakdown:

$25,000 Total Settlement
-$8,325 Attorney’s Fee
-$7,500 Medical Liens
-$250 Case Costs
$8,925 Net to Tom

An experienced lawyer can do a few things to put more money in your pocket. For instance, they can negotiate a higher total settlement and negotiate a reduction in your liens. When a lawyer presents you with a settlement offer from the insurance company, make sure to know what portion of that you would receive.

Will I get my settlement in one payment?

Most personal injury victims receive their settlement check in one lump sum. However, there are times when it may be beneficial to receive your settlement in multiple payments, spread over time. This is referred to as a structured settlement.

Here are three instances when it may be in your best interest to talk to your attorney about setting up a structured settlement:

You have serious injuries that will require ongoing medical care. Getting an annual payment may help you rest more easily, knowing that you will have enough funds each year for your medical needs.
You are unsure how you’ll handle a large one-time payment. If you doubt your ability to manage a large financial windfall, a structured settlement might be helpful.
The victim is a minor. A structured settlement can help protect a minor’s financial future.

Do I need to do anything after I’ve deposited my settlement check?

Once you’ve deposited your settlement check, usually there is nothing further you need to do. However, there may be a few things you’d like to consider:

Outstanding liens. We hope that you notified your lawyer of all the doctors and providers who gave you medical care for your injury. If you did, the lawyer took care of those bills once your settlement check came in. However, if there were any you missed, you are now on the hook to pay for those bills.
Tax implications. In many cases, a personal injury settlement is considered non-taxable income. Yet, everyone’s financial situation is different. For this reason, it’s a good idea to double-check with your tax advisor.
Financial management. Did you receive a sizeable settlement? If so, you may want to reach out to a financial advisor for help on how to best manage those dollars. Remember, you can’t go back and seek more money from this same claim.

Finally, if a lawyer did a good job on your case – and we hope they did! – consider giving them a positive review. Trust us, this always means a lot.

Need to speak with a Tacoma personal injury attorney?

Were you hurt in an accident that someone else caused? If so – you can reach out to us at any time for a free consultation. Call us at (253) 272-5226 or fill out the short form on our website.