How is Personal Injury Compensation Paid Out After the Settlement?
Presenting a personal injury claim is not always a smooth process. There may be months of negotiations or a lengthy court battle. As you head toward the finish line, your case might be on the verge of settling. Or, if your case is in litigation, you might receive a jury award in your trial. Understandably, you are likely wondering what happens next. When will I get my money? How are personal injury settlements paid out?
Unfortunately, there is no one answer on how long payment will take. Numerous variables can influence that time-frame. If you hired a personal injury attorney to represent you, they could provide answers to many of the questions you have. Here’s a look at some of the most common questions about personal injury settlement payments.
How Are Settlements Paid Out?
How the settlement will be paid out will depend on what happened in your case. It will also depend on who the settlement is from. If you were negotiating with the negligent party’s insurance company, they would be the ones to issue the check. If your case resolved through an award at trial, there may be appeals and post-judgment motions that need to be addressed first.
In the event you were negotiating directly with the negligent party, you may end up going back to court to try and collect on a judgment award. It’s frustrating to hear, but just because you received an award doesn’t mean the negligent party will honor the court order.
For claims with more than one defendant, there may be multiple parties issuing your settlement funds. Examples of multiple defendant cases can include defective products, commercial truck accidents, and medical malpractice.
How Long Will It Take to Get the Settlement Check for My Personal Injury Case?
Unfortunately, you can’t assume that the day your case resolves is the day you’ll get a check. Unless there is a court order or a signed settlement agreement that stipulates when payment is to be expected, it may take a while. The negligent party’s insurance company may draft a release of all claims for you to sign. That means that it has to get to your attorney and then to you for signatures.
Once it’s signed and sent back, they will review it and issue payment. The payment may not come directly to you either. A check may be addressed to you and your attorney. This means you need to visit your attorney’s office to sign the check. Then, it will be deposited in the attorney’s trust account. In other situations, multiple checks may arrive. One could be issued to you and your attorney, while another check might be made out to the healthcare provider directly.
The terms of your settlement agreement may also dictate how soon you get payment. Do not assume that if you get a six-figure award that it will be paid out in a lump sum. The agreement may stipulate that the money goes in a trust, or it may be in the form of a structured settlement. This means you could be looking at periodic partial payments for a specific length of time.
Cases involving Medicare or other governmental entities may take longer if there is a pending subrogation claim. A subrogation claim is one that is submitted by Medicare to another party for reimbursement of monies paid out in connection with your case. Perhaps Medicare covered a portion of your damages. If you collect an award, they expect to be reimbursed for what they paid out on your behalf.
How Will Outstanding Medical Bills and Liens Be Paid from the Settlement?
Before you receive your final award amount, all medical bills and any outstanding liens must be taken care of. When a medical provider files a lien, it means they are protecting their right to collect for any outstanding bills. If there is a valid lien in your case, the settlement check may even have the provider’s name on it too.
For outstanding bills, your attorney will use the deposited funds in their trust account to pay all necessary providers. This is why attorneys negotiate with providers on their billing rates. The more reductions they can negotiate, the more funds you will receive out of the settlement. Resolving medical bills in a car accident settlement is a high priority. No attorney is likely going to just hand over the check to you and make you resolve all of the outstanding debts owed on your own.
How Will My Attorney Be Paid from the Settlement?
Once liens and medical bills are settled and paid, your attorney will then take their fees and costs. In most cases, your attorney will take a percentage of your settlement award as their legal fee. This is known as their contingency fee.
Instead of charging you an hourly rate, most personal injury attorneys use contingency arrangements. Contingency fees vary. Some attorneys may take 30% of your settlement while others may take 40%.
Your attorney will also repay their up-front costs. Some advance costs can include court filing fees, postage, copies, costs to obtain medical records, a mediator’s fees, and more. In many personal injury cases, the cost expenditures are rather low unless the case goes to trial. With complicated cases, the costs advanced might be higher.
For example, if your attorney needed to hire multiple experts to prove liability or that your treatment was necessary, the fees might be significantly more.
What Can I Do if I Need Cash Immediately?
In cases where settlement funds may take a while to be received, you do have an alternative. Consider a post-settlement loan. Post-settlement loans can be useful for many people waiting on their settlement checks. If your settlement will take months, or even years, it’s understandable that you may need money now.
There are several requirements that you must meet before you can qualify for a post-settlement loan. When you contact Nova Legal Funding, we can walk you through our Fund My Lawsuit Now qualification process. Be advised, though; several states prohibit these types of loans. Currently, post-settlement loans are not available in Arkansas, Colorado, Maryland, South Carolina, and Tennessee.
To qualify for a post-settlement loan, you must have an attorney representing you. You need to have a settlement offer on the table or be waiting on settlement checks. Showing that the negligent party has extended a settlement offer is important as it can increase your chances of approval.
Additionally, only certain types of cases are eligible for funding, including personal injury claims.
When using services like Nova Legal Funding’s Fund My Lawsuit Now, your loan payments will include interest. Interest rates on post-settlement loans are typically high as there is always a risk with cash advances. On average, you are looking at annual interest rates of 36%, but it can be as high as 60%.
At Fund My Lawsuit Now, we offer some of the lowest interest rates in the industry. We offer clients monthly interest rates between 1% and 3%. That is between 24% and 36% annually.
Are There Any Restrictions for What I can Spend the Settlement Money On?
Provided that all of your outstanding medical bills, liens, and attorney’s fees are satisfied, the remaining settlement funds are yours. You can spend the money on whatever you want, but it’s always best if you save some. This is especially important if your settlement award includes money for future medical expenses or loss of earning capacity.
Once your case is resolved, you are expected to cover future expenses with the funds you received. If you decide to go on a shopping spree, you can’t come back asking for more money to cover new medical bills.
You may be tempted to spend it all now, but it’s worth looking into investment options to see how you can maximize the funds you are receiving. There are some situations where a portion of your settlement may be taxable. Considering meeting with a financial advisor to help protect you from losing your funds to a hefty tax bill.
Contact Nova Legal Funding Today
If you have a personal injury settlement headed your way, but you need cash now, look into a post-settlement loan. This is a convenient way to access a portion of your settlement funds now to cover expenses you may have.
For more information on how post-settlement loans work, or to apply for one, contact Nova Legal Funding today. You can speak with a funding specialist for a free consultation by calling 866-670-6131 or through our online form.
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