When your personal injury case finally settles, the first question on your mind probably has something to do with when you get your settlement check. After months or years of hard work and patience, you’re ready to get paid — and you’re ready right now. With all of the bills that have likely piled up and plans you’ve made, the excitement is certainly understandable.
Unfortunately, there are a few more hoops that you and your attorney will need to jump through before the defendant delivers the check to your attorney. At that point, your attorney also has obligations to attend to before the firm can release the balance to you. The actual time it takes to deliver your check will vary from case to case, and depends on several factors.
One of the first forms you’ll have to sign after agreeing to a settlement is a release form, stating that you will not pursue further legal action against the defendant for the incident in question. Simply put, the defendant (or their insurance company) will not issue a check for any damages until the release form is signed, releasing them from any future financial liability.
In cases where you have concurrent lawsuits against the same defendant, you obviously won’t be expected to give up those cases when signing this form. The release form should spell out which claims you are agreeing to release the defendant from, and in some cases it may explicitly exclude the other pending cases. Your attorney will read through the release form before you sign to ensure the terms are fair and accurate, and don’t pose a risk to your other pending cases.
Note that you may have multiple release forms when several parties are involved. The defendant may require one, their insurance company will certainly require one, and any other parties with a financial stake in the case or settlement may require one. Again, your attorney will read through all of these, and ensure they’re signed and submitted in a timely manner so that they don’t hold up your check.
In rare cases, you may run into a speed bump if your attorney or the opposing counsel comes across a line in the release form that they disagree with. The release form may need to be redrafted to correct the mistake or include the requested provisions requested by either side. Such instances are fairly rare, but when they occur they can delay your settlement check.
Internal Processing Delays with the Defendant
Many states have laws that dictate how long a defendant (or their insurance company) has to issue a settlement payment once the release form is submitted. Unfortunately, there are plenty of loopholes that organizations can take advantage of to delay processing your check.
The most common delay you’ll see after a settlement is an exaggerated “processing time” after the organization receives your release form. Whether your state requires they issue a check within 10 days or 30 days, the law applies to when the release form is formally received by the organization. As such, their processing department may take a few days to a week to scan in your form and formally accept it. Once this is taken care of, your attorney should receive your settlement check fairly quickly.
Waiting for the Check to Clear
In most cases, the settlement check will be sent to the attorney of record. At that point, the attorney may hold the check in a trust or escrow until it clears. This can take up to 5 – 7 days, especially for large checks.
As soon as the check clears, the law firm will deduct their share of the settlement amount to cover the cost of legal services. If the firm made any advancements to cover the cost of your ongoing case (e.g. paying expert witnesses, court fees, etc.), they’ll recover these costs, too. You should have a clear understanding of these charges ahead of time, so there shouldn’t be any surprises.
Settling Outstanding Liens and Bills
Depending on your case, your attorney may have advised you to not pay associated medical bills during negotiations. You have an obligation to pay these as soon as the case settles, and your attorney will use settlement proceeds to settle any outstanding liens as soon as the check clears. Settling liens is usually a fairly quick process — unless the government is involved. If you have liens from Medicare, Medicaid, or other government-funded aid programs, it could take months to resolve these outstanding balances. Unfortunately, your attorney cannot release your check to you until these are covered in full.
In addition to settling liens, your attorney will need to pay outstanding bills related to your case. Examples include bills for expert witnesses, private investigations, medical tests, etc. Most of these involve fixed bills, but there are situations where your attorney will need to negotiate a final payment amount. You don’t want to rush a negotiation and wind up with a bigger bill, so it’s best to exercise patience when negotiations are ongoing.
The Final Distribution
Once your attorney has fulfilled his or her obligations to pay outstanding liens and case-related bills, they’re free to deliver your check. Depending on the situation, you may receive the funds by check or wire transfer.
You deserve to celebrate and spend your settlement check as you see fit, but remember that you still have an obligation to pay any bills that your attorney didn’t already cover. Before you start spending your settlement check, take inventory of all related bills and make sure every single one is covered (to the extent that your settlement check can cover them, of course). Too many settlement recipients make the mistake of spending their funds before settling applicable debts, leading to significant financial troubles.
How to Speed up the Process
Most of the steps on this list are outside of your hands, but there are a few things you can do to grease the wheels and hurry the process along. When you believe a settlement is imminent, consider drafting and signing a release form ahead of time so it’s ready as soon as you reach an agreement. Work with your attorney to take an inventory of your outstanding liens and bills while the release form is processing, recording current account balances and collecting recent account statements so your attorney can pay them the moment the check clears. Above all, comply with your attorney’s requests in a timely manner, understanding that waiting until the next day to respond to their email or phone call may delay receiving your settlement check.
Should you find yourself in a situation where you need the proceeds of the settlement check while it’s still pending, talk to your attorney about collecting a portion of the settlement check in advance. Not all law firms are in a position to advance a portion of a settlement check, and an attorney is under no obligation to do so, but it’s a kind gesture that can help you get by while the defendant is taking their time processing the release form, or while your attorney is working with Medicare to settle outstanding medical bills.
Call Personal Injury Attorney Jared Everton at (480) 467-4392 to discuss your case today.
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