How Are Personal Injury Settlements Paid?
Posted on Thursday, September 1st, 2022 at 6:20 pm
If you are involved in a personal injury case, you should understand the process of how personal injury settlements are paid out, so you know what to expect. It’s exciting when you finally settle a personal injury case. You want to deposit your check immediately so you can spend it. However, you likely won’t receive a check for the agreed-upon settlement amount.
Typically, when you settle a personal injury case, the final number isn’t the monetary award the injured party receives. It could be much lower after paying attorney’s fees and debts.
Below you will find a detailed outline of the steps you must follow after reaching a settlement agreement in a personal injury case.
Steps After Settling a Personal Injury Case
There are multiple steps to complete after accepting a settlement offer. You need to go through each one before you receive the final check.
Sign a Release from the Insurance Company
The insurance company should send your attorney a release form for you to sign and send back to them. They want you to agree to the terms of the settlement and confirm you won’t pursue action for more compensation from them in the future. The release form releases them from further liability for the accident and your injury.
You should review the terms of the settlement agreement with your personal injury attorney. Never sign anything from the insurance carrier without having your lawyer look at it first. Sometimes, the terms are confusing or misleading. You might sign something that doesn’t contain the agreed-upon terms or includes unfair conditions.
Your attorney can review the release to ensure the terms discussed during settlement talks are there. They can also negotiate terms on your behalf if there’s something you don’t like about the agreement.
Receive the Settlement Check
Your lawyer will likely receive the settlement check from the insurance carrier. Typically, the check is in your attorney’s name and mailed to their office. They will deposit it in their firm’s account and settle your obligations.
Settle Your Debt
Your attorney can negotiate debt related to your personal injury case. For example, many accident victims have unpaid balances from their medical providers.
Your attorney might have asked your doctors to place your account on hold with a letter of protection. This is an agreement that your doctors will accept payment from your settlement.
You might not owe the full amount of medical expenses at the end of your case. Your lawyer might be able to settle your account for a lower balance than what you owe or convince the medical providers to forgive your debt entirely.
Pay Legal Fees and Costs
Many personal injury lawyers take cases on contingency. That means they don’t charge upfront fees or costs when a client hires them.
Your attorney will take out a percentage of the remaining balance after settling your medical bills for their fees. They might also have to take out some money to cover costs they incurred while handling your case. For example, they need reimbursement for postage to mail letters and charges for copying documents in your file.
Print the Settlement Check
Once your attorney completes all necessary steps, they will print your check. The balance will depend on how much of your settlement they had to use for legal fees, medical expenses, and other costs. When you receive your check, you can do whatever you want with it. There aren’t any limitations on how you spend it.
Personal Injury Settlement Payment Options
If you worry about managing a significant amount of money, receiving your settlement in smaller installments might be an option. You don’t have to recover one lump-sum payment. You could set up a plan to receive a predetermined amount on your chosen schedule.
If you want to use your settlement check for a large purchase or to pay off some debt immediately, receiving the total amount might be the better option. You can bring your check to your bank to deposit it. Whether you put the money in savings or spend it right away is your choice.
Both options are tax-free. The IRS doesn’t impose taxes on personal injury settlements.
Contact Jonathan R. Brockman, P.C. Today
The Georgia personal injury attorneys of Jonathan R. Brockman, P.C. have over 70 years of combined legal experience. We provide our clients with personalized attention and services. You will be our top priority while we represent you in your case.