CHICAGO, IL – The process between filing a claim and receiving payment for a personal injury can feel like it takes forever, especially when you have bills to pay and financial losses to cover. From the moment your claim settles, you can often expect to receive your settlement money within a few weeks.
Quick Overview of Settlements
A settlement is an agreement to resolve a legal claim out of court. When it comes to personal injury cases, the parties to a settlement are usually the injured claimant, an insurance company that has an obligation to pay the claimant’s losses and (when applicable) an individual or corporate entity that has liability for the claimant’s damages.
Most personal injury claims are settled. The typical personal injury settlement consists of an agreement for the claimant to receive an amount of money in exchange for releasing the parties from liability and terminating any pending legal action against them.
Lawyers will negotiate settlements on behalf of the parties to the settlement agreement; however, the decision to settle a claim rests within the parties themselves. No lawyer can agree to a settlement on your behalf without your permission.
Settlements are generally final meaning you usually can’t reopen them, even if later it turns out that you didn’t receive enough money to cover your personal injury losses. You should only settle a claim when it overs the most favorable outcome you can realistically achieve.
Process Involved in Receiving Settlement Money
Receiving settlement money involves completing a series of relatively standard steps. You can expect these steps to take anywhere from two to six weeks to complete, on average.
Executing a Written Settlement Statement
The obligation to pay settlement money usually arises only once a formal, written settlement agreement has been signed, sealed and delivered. In most cases, the settlement only becomes final when it’s put into writing and signed by the parties or their representatives.
Sending the Money by Check or Wire Transfer
The settlement agreement may set terms for the timing of payment. For example, it can require the insurance company or at-fault party to pay the settlement amount immediately, or it might give them a window of time to pay after the settlement agreement has been executed. Whatever the time period agreed, you should expect the payor to wait as long as possible. Payers, particularly insurance companies, prefer to hold on to their money as long as they can.
The settlement agreement may also spell out how they send the payment. Wire transfers are preferable for personal injury claimants because they’re nearly instantaneous. But payers tend to prefer payment by the much slower means of a paper check, which takes a few days to arrive by mail and up to a week or so (depending on the amount).
Placing the Funds in an Attorney Trust Account
When an attorney represents you in a settlement, the settlement money typically goes into the attorney’s trust account which is a bank account the attorney maintains that is separate from the attorney’s business or personal account to hold client funds.
Once the money is deposited into the trust account, the lawyer usually uses it to pay for any existing liens on your settlement. A lien is defined as a formal claim against a specific property. When it comes to personal injury cases, it’s common for the injured person’s creditors to have filed liens against settlement funds.
Creditors who may place a lien on your settlement might include medical providers, your own insurance company or child support. Before agreeing to a settlement, be sure to disclose to your lawyer about any accident-related debts you may owe to other liens you have against your assets so your lawyer can address them in your settlement agreement and when handling settlement funds. Failing to advise your attorney about pending liens can land you in legal hot water with the court, creditors or government authorities.
Deducting Lawyer’s Contingency Fees and Case Expenses
Most personal injury lawyers work on a contingent fee basis. This means the fees for their services consist of an agreed percentage of the settlement amount. Your lawyer may have agreed to pay the cost of pursuing your case, subject to reimbursement from any settlement. Before disbursing the funds to you, your lawyer will deduct these amounts from your settlement.
Paying Out the Remaining Settlement Funds to You
After completing the steps listed above, your lawyer will typically send you the remaining settlement funds in the manner you request: either by wire transfer or check. It’s usually up to you to decide where you’d like your lawyer to send you the remaining funds and the type of account to deposit them in.
Factors That Can Delay Receiving Your Settlement Money
Lawyers know their clients want to get their hands on the funds from their settlement as soon as possible; however, some factors can delay the final disbursement to you which may include:
- Settlement Agreement Negotiations
Even after agreeing on the amount of a settlement, it can take additional time to finalize the agreement in writing. For instance, the lawyers may still need to negotiate the scope of the release you give in exchange for the settlement payment, or whether and to what extend you must keep the settlement confidential.
Your lawyer must balance your desire to receive funds quickly against protecting your legal interests. You can expect your lawyer to keep you informed about any issues that may delay putting the settlement in writing.
- Court Approval
Some settlements require court approval. For instance, the court will review settlements made on behalf of minors who have suffered a personal injury to ensure the settlement terms serve the child’s interests. Adding the extra step of court approval can delay your funds.
- Bank Delays
Depending on the size or source of your settlement payment, it can take time for banks to clear funds as they move from one bank account to the next. Sending money by wire can alleviate some of these delays, but banks must follow clearance and fund settlement procedures. Everyone including the parties and their lawyers must deal with this, even if it means slowing things down.
- Lien Disputes
Disagreements about how much or whether you owe to a creditor who has filed a lien on your settlement proceeds can delay the reimbursement of your money. This can happen in various contexts. For example, you disagree with a creditor about the size of the debt you may owe. On the other hand, you may dispute that you have had to pay certain medical bills out-of-pocket and believe your health insurance company should pay them instead. These scenarios will ultimately delay your funds since your lawyer will need to take necessary steps to resolve a lien dispute before distributing your money.
- Payor Bad Faith or Breach of Settlement Agreement
While it rarely happens, delays may arise when the party owing settlement payments acts in bad faith or breaches the settlement contract. Your lawyer will need to take legal action against a party to force them to fulfill their payment obligations to you. You may have the right to seek additional damages for a party’s bad faith conduct or breach of the settlement agreement if this arises.
Can You Do Anything to Speed Up the Settlement Process?
While you may be frustrated by even a short wait to receive your settlement funds, most of the potential sources of delay in receiving your payment are out of your hands. With that being said, there are things you can do to ensure your process isn’t slowed down, such as:
- Provide your attorney with your contact information and tell them the best way to get ahold of you.
- Respond promptly to any requests from your attorney for the information or give them permission to take action on your behalf.
- Provide your attorney will all information you have about accident-related debts and potential liens on your settlement funds arising from other obligations, including tax liabilities or child support.
- Follow your doctor’s orders and lawyer’s advice while your legal action is pending to minimize the number of disputes that may arise over who has liability or the potential size and/or terms of your settlement.
Contact an Experienced Personal Injury Attorney
The experienced personal injury attorneys at the Dinizulu Law Group are here to guide you through the litigation process of building and settling a claim on your behalf. Our team of skilled lawyers provides you with the greatest chance of achieving the maximum settlement available in your case and disbursing your settlement money as quickly as possible.
To receive a no-obligation and free consultation, contact our attorneys today at (312) 384-1920.