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So you’ve made it through the gauntlet of getting injured, making a claim, and finally you reach a settlement to compensate you for your damages. Hopefully, it was a good outcome! Now, you want to know the all-important question – when do you get your money?
Cue the Jerry Maguire “Show Me the Money! line…
This is the most frequently asked question we get about what happens after a settlement.
The answer is not always as simple or straightforward as we would like because there are numerous moving parts that must work together to conclude a case and get a check sent out. Let’s jump in and look at what you can expect (typically).
After settling your case, the timeline for receiving your settlement funds typically ranges from a couple of weeks to a few months. Here are the main factors that impact this and why that timeline can vary so much:
Paperwork Processing:
Once a settlement is reached, you will be required to sign a release of liability, preventing you from pursuing further legal action related to the incident. Your personal injury attorney will typically work with the insurance company on finalizing the release language and terms. Depending on the complexity of your case this can be straightforward or quite complicated and contentious. Ultimately though, a release will be agreed upon which you will be required to sign before your settlement check is mailed by the insurance company. For smaller claims, the release should only take a couple of days at most, and oftentimes it can be done the same day as the settlement is reached. For larger claims, it can take weeks, if not longer.
In Plain Terms
In exchange for them paying you money (settlement), you agree you can’t pursue any further legal action against the at fault party in the future (release). This is why this step must take place before an insurance company will mail the payment.
Insurance Company Payment:
Once the release is finalized and you sign it, the insurance company will process the payment, which can take several weeks. Some insurance companies are notoriously slow in issuing settlement checks! Despite my strong desire to name names, I’ll resist and just say this can vary by insurance companies. Additionally, the larger the amount of money paid to you, the longer it tends to take because more people are involved in approving the release of the funds. They may also require additional documentation before releasing the funds such as lien handling instructions and other issues related to the settlement proceeds. More on that below…
In Plain Terms
Some insurance companies pay quickly; others can take a couple weeks. The more money you are being paid, the longer you can expect it to take. Big money paid out = more approval from the big dogs in the insurance company required.
Deposit Into Trust Account
When your check is mailed out from the insurer it will be sent to your attorney. The check will be made out to your attorney’s firm and to you personally. That check will be endorsed (signed) by you personally and your attorney. It will then be placed in your attorney’s trust account where it will typically take three to five business days to clear. This is required by law. Once the check clears, the money can be disbursed. But that leads to our next bullet point…
In Plain Terms
Insurance checks must be put in a trust account to make sure the funds are clear. Expect about 3 business days. When it clears, the funds are available.
Lien Resolution
Any outstanding liens (e.g., medical liens) need to be resolved before you receive your portion of the settlement. Your attorney will handle that but since liens and other rights of subrogation (i.e. reimbursement) often involve health insurance companies and governmental entities such as Medicare and Medicaid, this can at times create delays at this stage. Of all the variables, this step is the one most likely to delay when you receive your money. But the delay is worth it because your attorney can often use beneficial laws to obtain reductions for you, which puts more of your settlement money in your pocket.
In Plain Terms
If you have unpaid bills or liens, these must be paid from your settlement. But you want to reduce what you have to pay out because every dollar you get those bills/liens reduced goes directly into your pocket. For some liens, you can’t start trying to get reductions until after you know your settlement amount so this is why it can take some time, particularly with Medicaid and Medicare.
Once the check clears, and your attorney has resolved all the liens and bills, you will get your check. Obviously, there can be other factors involved, but these are the primary issues impacting the timing of when you get your money, most of which are beyond your control and the control of your attorney.
In general, for smaller claims, I would plan on it taking about three to four weeks after your settlement to actually have your money in your hands. For more complex claims plan on it takes longer.
AND MOST IMPORTANTLY… never spend your settlement money before you have your money in hand. Too many things can happen that delay payments. Oh, the stories I could tell you about clients violating this rule… but that will have to wait for another post.
