Being injured can be financially devastating in addition to physically debilitating. In many cases, personal injuries can incur extensive medical bills, which can cause a lot of headaches many months after an injuring incident. Knowing how personal injury settlements are paid out is important so you understand when you’ll get money from an at-fault party.
To learn more, please continue reading. Alternatively, you can reach the legal representatives of Schwartzapfel Lawyers by calling 1-516-342-2200 or visiting us online to schedule your free consultation and so much more!
What Are The Types Of Personal Injury Settlements?
When you are due to receive a personal injury settlement — either out-of-court or at the conclusion of a personal injury lawsuit, that settlement can take one of two forms: a structured settlement or a lump-sum payout.
Structured Settlement Payouts
A structured settlement payout provides you with your personal injury settlement over a set period of time. You’ll usually receive the same amount of money each month or year over the settlement period.
For example, if a defendant in a personal injury lawsuit owes you $100,000, you may not receive the full $100,000 all at once. Instead, you might receive $10,000 per month over the course of (10) months until the entire amount is paid.
Structured settlements can be very useful in a variety of cases. For instance, consider:
- You, the plaintiff, are dealing with a catastrophic injury with permanent side effects from a slip and fall accident. The structured settlement will likely fund an annuity policy via the defendant’s insurance company, guaranteeing you a consistent flow of income over a certain amount of time.
- You want to consider taxes and fees. If you receive a large lump sum from a personal injury settlement, you might need to pay a substantial portion of that to the federal or state governments in taxes.
On the other hand, a lump-sum payout is exactly what it sounds like: a full payout of what you are owed from a personal injury settlement.
With a lump-sum payout, you receive the full amount of money the other party owes. Your attorney will likely then deduct any expenses associated with their services and provide you with the rest of the cash.
A lump-sum payout can be advantageous in many situations, including but not limited to those in which:
- You need your personal injury settlement in a lump sum to pay a debt or medical bill
- You don’t want to have to wait for the full value of the money
- You want to put the money into a savings account
- And more!
Note: Either type of settlement can be agreed before ever setting foot in a courtroom.
But if you’re unsure about which personal injury settlement type best fits your needs, you should speak with knowledgeable legal representatives like the ones at Schwartzapfel Lawyers. Our NYC personal injury attorneys can help you determine whether a structured settlement or lump-sum payout schedule is better for your financial and personal situation. Call us at 1-516-342-2200 to get started!
What Is The Personal Injury Settlement Payout Process?
So, what can you expect when you are due to receive a personal injury settlement? While the exact steps and timelines will vary, the general payout process follows the below sequence in most cases.
You Sign The Release Documents
First, the defense attorney in a lawsuit will likely prepare a document called a release. The release will likely describe all the terms and conditions of the settlement, and its length can vary depending on how complex the settlement is.
You and your attorney will likely oversee the release documents and read through them carefully. It’s a good idea to hire a knowledgeable lawyer to read through the documents to ensure that there aren’t any loopholes or mistakes.
If the release documents are in order, you’ll sign them. The signature on those documents is a binding agreement: it’s imperative to read the release carefully since, once you sign, you may not be able to petition to change the settlement’s nature or amount later on.
If you or your attorney do discover that there’s something wrong with the release documents, you’ll have to send them back to the defense team to have them redrawn.
The Insurance Company Processes The Release
At this stage, the insurance company for the paying party (the defendant) will likely receive the signed release documents and any other relevant forms. Over a few days, it will likely process the release and cut a check.
In most cases, you cannot receive your personal injury settlement via cash or a direct payment to your bank account. There might be some exceptions, although you’ll have to work them out with your case’s judge and defense team (as well as the insurance company responsible for paying your personal injury settlement).
For more on this, speak with a Schwartzapfel Lawyers personal injury pro by calling 1-516-342-2200 today.
Check Is Sent To Your Attorney’s Office
Once an insurance company (or any other paying party) cuts you a check, the check will likely be made payable to you and your personal attorney. Most personal injury settlement checks are sent to your attorney’s law firm rather than sending the check to you or your mailbox, where it could be lost or stolen.
Note: In most cases, this step is completed within three (3) weeks. However, a variety of factors can come together to potentially impede the process, such as clerical errors, bad weather, and so forth.
Note that in some personal injury cases, you might have one or more liens placed against you. A lien is an obligation that says you must use your money to pay an outstanding debt, like a medical bill.
If you have one or more liens placed against you, the law office that receives your settlement check will likely deposit it into a trust account or escrow account. New York law requires that settlement checks sit in escrow until they clear; at that point, your lawyer will likely disperse whatever portion of the settlement you owe to your bank account, after which you’ll get your settlement money.
At this stage, your lawyer will likely also take their percentage-based fee, if applicable. For instance, if you work with a seasoned lawyer who operates on a contingency fee basis, that means they’ll only take a fee if they recover financial compensation on your behalf. If that fee is 5%, your lawyer will take 5% of the settlement funds as payment for their services.
Furthermore, your lawyer will likely pay your liens filed against you before giving you access to the rest of your settlement money. You might have a lien against your personal injury settlement for such things as:
- Payments for outstanding child support payments
- Payments for unpaid medical bills with a medical provider
- Reimbursements or payments to your insurance company or the Medicare or Medicaid programs
- And more!
Note: You shouldn’t skip this step of the process, as it’s vital to ensuring that you don’t face other legal consequences that can result in a forfeiture or reduction in your total settlement allowance.
How Long Does It Take To Receive Personal Injury Settlement Funds?
On average, it should take less than six (6) weeks for you to receive any personal injury settlement funds, whether they arrive as a lump sum or as part of a structured settlement payment plan. However, please keep in mind that your payment can be delayed for any number of reasons.
Moreover, you can always check in with your law office about your personal injury settlement status. And while it’s unlikely that they will be able to accelerate the process, they can check in with the defense team and any other relevant organizations to confirm your settlement payment timeline.
Contact Schwartzapfel Lawyers Today
As you can see, the personal injury settlement payout process isn’t designed to create undue hardship. Still, you might have questions about when you’ll receive your money and what form that money might take.
To this end, Schwartzapfel Lawyers’ knowledgeable attorneys are among the best to contact if you have further questions. Our experienced team can ensure that you receive your maximum settlement money in a timely fashion and will know exactly when it should show up in your bank account.
Call us now at 1-516-342-2200 or visit us online to schedule your free consultation and/or case evaluation today. It will be our honor and privilege to fight – and win – for you!
DISCLAIMER: Nothing on this page should be considered legal advice. You should seek the appropriate counsel your situation requires. For more information, call 1-516-342-2200 now!