Plaintiffs often find themselves in dire financial trouble due to the long, drawn-out legal process, and they wait every day for their deserved funds so they can move on with their lives. While personal injury settlements are being finalized, plaintiffs must continue paying bills even if they are unable to work. The finalizing process of a settlement isn’t simply about a check being dropped in the mail by the insurer. While it is characteristic that many personal injury settlements are finalized in about six weeks, there is a somewhat complex process required to get to this stage.
Knowing what to expect may make it easier to navigate through the procedure. The following are some general steps.
Signing Documents and Releases
Once a settlement is reached, the attorneys will be tasked with drafting the necessary release forms. The circumstances of a settlement dictate how complex or simple these forms must be. Attorneys will carefully scrutinize each document to ensure that all conditions and terms are accurate.
Of course, the process of reaching a final settlement can be somewhat tumultuous if negotiations go back and forth. Once the negotiations are done, though, release forms can be drawn up in a final state. At this point, the plaintiff will review them and sign them.
The Release is Processed by Insurer and a Check is Cut
After the signed release forms reach the insurance company, they will be processed. A settlement check will ultimately be issued, made payable to the plaintiff and plaintiff’s attorney. This check is typically sent to the attorney.
In a perfect world, this whole process would run smoothly without a hitch. In the real world, however, things can happen that delay the payment, things like clerical errors or system malfunctions. If there is a lengthy delay after all release forms are sent to the insurer, it is wise for the plaintiff to reach out to his or her attorney for help.
Insurance Check Reaches Lawyer
When the check reaches the attorney’s office, it is promptly deposited into an escrow or special trust account. This step is part of the mandatory settlement process. After the check clears the banking system, the attorney is then allowed to distribute the settlement money.
In most cases, there are various liens and unpaid debts that must be paid first. The following list shows examples of items that need to be paid:
- Medical expenses
- Repayment to health insurers if accident-related charges were paid by them
- Any unpaid child support
- Medicaid if medical care was covered by this entity
- Medicare if medical care was covered by this entity or if the plaintiff qualifies for Medicare Set-Aside
The above lien items need to be immediately resolved through settlement funds. Serious penalties face individuals who ignore liens from government agencies, medical providers, or insurance companies. If a plaintiff has questions about payment of such liens through settlement proceeds, it is advisable to discuss them with the attorney.
Legal Costs and Fees
After all liens are paid, the plaintiff’s lawyer will then deduct the legal costs and fees. Generally, there is a certain percentage of the settlement amount that has been agreed upon and written into the initial contract between the attorney and the client to cover the lawyer’s personal fee. Other expenses that have accrued during the case could include costs for:
- Collecting medical evidence and records
- Expert witness charges
- Court reporting and deposition charges
Most attorneys will provide an itemized statement that includes a breakdown of all legal expenses. Again, if there are questions about any of the charges, these should be discussed with the attorney. After payment from the settlement funds for all liens and legal fees, the balance of the settlement money goes to the plaintiff.
Settlement With Structured Payments
On occasion, a personal injury settlement will involve the plaintiff being given portions of the funds at various intervals over a period of time. This type of arrangement is typically done if the plaintiff is a minor or if the injury is so catastrophic that there will be very expensive and ongoing medical treatments and nursing care required.
In such cases, the insurer usually funds an annuity for the plaintiff. Annuities are insurance contracts that guarantee fixed payments on a regular schedule. The payments can be made on a monthly or yearly basis, or even every couple of years.
While structured settlements may appear to be sensible, there is a drawback. Many annuities only make payouts during the lifetime of the victim, so they stop when the victim dies. Obviously, there could be remaining funds that never get disbursed. When considering a structured settlement, it is wise for the plaintiff to discuss all angles with the attorney.
If a Settlement is Delayed
The typical time frame for receipt of funds after a settlement is reached is about six weeks. However, nothing is set in stone, and delays happen occasionally. Plaintiffs are encouraged to stay in contact with their attorney who can explain and possibly resolve any delays.
When delays are not quickly managed, though, plaintiffs can encounter serious financial issues. House payments or rent can fall behind. Medical bills and prescription medications can have a major negative impact on any savings on hand. Just putting groceries on the table can become a serious problem if an unexpected delay occurs.
Legal Funding Could be the Answer
Individuals who find themselves waiting for a legal settlement and are also experiencing a lack of finances to handle everyday expenses should consider the pre-settlement funding services provided by The Legal Funding Group. We have the resources to provide a lawsuit cash advance for plaintiffs to use on bills and other expenses.
There is no financial history report or credit check required. More information about our legal funding services can be seen on our How It Works page.
Just complete our online application or give us a quick call at (912)-777-3997.