How Are Personal Injury Settlements Paid Out?

The Journey of a Personal Injury Settlement Check

You’re eager to put your accident, medical bills, and case behind you. But for most injured people, that’s tough to do until you have been compensated for your injuries. Understanding the process of how it gets there can make things a bit easier.

1. You Sign the Release Form

Once all parties, including their attorneys and insurance companies, have agreed to an injury settlement amount, it’s time to sign the paperwork. You’ll sign multiple documents, but the most important one is the release.

The release confirms that you won’t try to get any more compensation from the at-fault party or their insurance company and releases the at-fault party and insurance company from any future liability or damages.

Sometimes, the involved parties can’t agree about the terms of the release, even after they’ve agreed on the settlement amount, and this can cause delays. Cases involving minors can also make things more complicated and may have to be approved by the probate court.

2. The Insurance Company Writes a Check

The signed release goes to the at-fault party’s insurer, which will write the settlement check. The check will be made out to you and your attorney and sent to the law firm.

3. Your Attorney Deposits the Check

Your settlement money is now with your legal team but must go through a few more steps before getting to you.

One of the reasons the check was made out to your lawyer (as well as to you) is so they can deposit it into their legal trust account.

4. Your Lawyer Works to Negotiate Past-Due Medical Bills and Other Debts

It’s very common for injured people to owe portions of their settlement to third parties, such as medical providers. Often called “liens,” these debts can be negotiated, and your attorney will fight hard to reduce how much you owe.

Liens against a personal injury settlement often come from:

• Healthcare providers: Typically, health insurance isn’t going to cover all medical expenses, and in cases of serious injury and/or long-term care, the costs can add up fast.
• Government health insurance programs: Sometimes, the state has the power to pursue compensation. For example, if Medicaid paid medical bills, they have rights to the final settlement, and even to file a claim if the injured person doesn’t.
• Group health insurance carriers: If your health insurance company paid your medical bills and they file a valid lien, you may have to reimburse them for the amount they paid. Some health insurance companies do not qualify; your attorney will determine if they have to be reimbursed.

Once all liens are agreed upon, your attorney will pay the lienholders out of the settlement funds.

Be aware that there can be a significant amount of back and forth in this part of the process, and it could add to your wait time.

5. You Get Your Money

Once all liens, expenses, and legal fees are finalized, you will meet with your attorney to finalize your case. They will provide a settlement packet containing a copy of your release and all paid expenses. You’ll then review all documents and sign your final paperwork.

After that, you will receive your check and be on your way! This may be completed in person or remotely and your check can be in paper form or ACH. The peace of mind can do wonders to ease emotional distress long after your accident case is closed.

Speeding Up the Process

You and your personal injury attorney can do a few things to speed up the process:

• Draft a release form as soon as it’s clear what the settlement will be, so you’re ready when it’s official.
• Submit all necessary documents as soon as possible so that the insurance company has what they need to cut the check.

Get a handy guide on the journey of a settlement check when you download our free infographic.

RELATED: How Much is a Fair Herniated Disc Settlement in Georgia?