Personal injury cases often end in a settlement. An insurance company or the at-fault party provides a settlement offer to the plaintiff. If all parties agree on the proposal, the court provides an Order of Settlement, and the settlement check process begins.
While every state has its timeline, most states require that parties in a personal injury case complete the necessary paperwork within 30 to 60 days.
Once the forms are signed and documents prepared, the at-fault party prepares a settlement check, which is sent to the plaintiff’s attorney and deposited into a trust account. When the settlement check clears the bank’s hold, funds are available for your law firm to make a final accounting and disburse the balance of your settlement award.
While your lawyer will receive your settlement check, it is not theirs to keep. Your personal injury attorney acts as a mediator between all parties involved in the lawsuit and individuals or entities with claims against the settlement award. You must sign the settlement check before your attorney deposits the check in the trust account held by the law firm.
Is It Possible for My Attorney to Cash My Settlement Check?
Your attorney can’t cash your settlement check on their own. You must sign the check before your attorney deposits it into a trust account.
The trust account is a special account owned by the law firm and designated only for settlement funds. Using a trust account ensures that your lawyer does not commingle client funds with other cash associated with the law firm.
Once the settlement award clears the bank, your attorney will begin a final accounting to disburse the funds. Check clearance may take up to 10 days.
Did My Lawyer Take My Settlement?
No, your lawyer has not taken your settlement. While you may wonder why your lawyer is holding on to your money, your attorney is required to act as a mediator when your final settlement arrives.
Your personal injury attorney has a legal obligation to conduct a final accounting of the settlement, ensuring that you pay all unpaid medical bills, medical liens, and other expenses.
The attorney will also deduct their legal fees from the settlement. At the beginning of the case, you signed a contingency fee agreement. The contingency fee agreement gives your lawyer a certain percentage of your final settlement.
You are likely tired of waiting, especially if you have fought a long legal battle to get a settlement award. However, the legal process is not known for being quick, and you are at the tail end. The balance of your settlement is usually available within 30 days of your lawyer receiving payment from the at-fault party.
What Is the Settlement Check Process for Personal Injury Cases?
While certain variations may occur, there are typically six steps in the settlement check process. You and your experienced personal injury attorney must complete each step before receiving the balance of your final settlement.
Step 1: The Signing of Forms
The settlement check process begins with a settlement agreement and release forms.
The at-fault party’s law firm prepares a release form. This form releases the defendant from further legal action by you concerning the injuries you sustained. The release form also releases the defendant from being held at fault — the exact terms of a release form will vary.
Once you and your personal injury attorney review and agree to the terms, you must sign the release form. Your attorney will send the signed release forms to the defendant’s legal team to begin the settlement check release process.
Step 2: Insurer Processes and Sends the Check
After the insurance company receives the signed release forms, they will submit your settlement check for internal processing. Settlement checks are sent to your attorney when the insurance company’s accounts payable team has completed their accounting practices.
Usually, an insurance company sends the settlement check within seven to ten days. In rare cases, internal processing may cause a check to be unreasonably delayed.
Step 3: Your Lawyer Deposits the Check into a Trust Account
Sometimes, people become nervous when they hear their personal injury attorney deposits their check into a trust account. After all, you were the one who sustained injuries and started the case — why should the attorney have control over your money?
State laws require that attorneys hold settlement checks in a trust account to ensure that the defendant has settled their debt and that the money clears. While you may feel the trust account process is unnecessary, the law protects you from bad checks.
If the check bounces, your legal counsel will notify the defendant and the court, and the court will extend the settlement check process. A large settlement may take longer to clear the bank’s hold.
Step 4: Your Legal Counsel Repays Your Debts
Once your lump sum payment has cleared the bank, your attorney prepares a final accounting of the case. Your lawyer prepares a statement of unpaid medical bills, liens against your settlement award, lawsuit loans, and other expenses. Once your lawyer has properly documented all costs, they will pay the debts using funds from your settlement check.
Step 5: Legal Fees Are Paid
Next on the payment list are legal fees. The contingency fee agreement you signed when assigning your case to your lawyer awards them a percentage of the settlement amount. Your contingency fee, plus any other legal fees that your attorney incurred to represent you, are deducted from your settlement amount.
Step 6: Balance of Your Settlement Funds Are Sent to You
Finally, the remaining balance of the settlement you’ve received from your personal injury case is mailed to you by your law firm. Once you receive the check, you can deposit the settlement funds into your personal account and use the money however you see fit.
What Causes Settlement Check Delays?
Sometimes, the settlement check process can take some time to complete. You now understand the steps that you and your personal injury attorney must complete in the process.
If you have signed the release forms and six weeks have passed, you need to find out where your check is. There is no reason for an insurance company to delay your payment any further.
Common reasons for delays in receiving your check include:
Improper Signing of Release Forms
Occasionally, delays may occur due to improperly prepared or signed release forms. If the court or the insurance company finds that documentation is incorrect, the at-fault party’s legal team will need to redraft the documents. Your personal injury attorney will notify you if something is wrong with the signed forms or documents.
Your Check Is Still Waiting to Clear the Bank
The check hold process can take some time, especially for large settlement awards. Usually, seven to ten days is long enough for settlement funds to clear. Occasionally the process will take longer. Contact your law firm to determine whether your settlement amount has cleared the bank.
Settlement Agreement Involves an Estate or Minor
Occasionally, a personal injury case will involve an estate or minor. A personal injury case whose parties include an estate or child is subject to specific procedures that your attorney must follow.
For example, if an estate is a party to the settlement agreement, the estate’s representative must agree to the settlement. Additional procedures can delay your check.
Attorney Is Negotiating with Lienholders or Debtors
An experienced personal injury attorney doesn’t take debts at face value. Sometimes, your attorney may attempt to negotiate the balance of your debt with your creditors.
If your attorney refuses to pay the debts outright, they may be able to reduce the amounts you owe. While this can delay your settlement check’s payment date, your settlement balance may increase due to your attorney’s efforts.
So, if you’ve been wondering, “can my lawyer cash my settlement check?” you now completely understand the process. Your law firm does cash your settlement check, but you are required to sign it.
Thus, you will be aware that the at-fault party has sent payment, which is in your attorney’s hands. However, your lawyer must conduct a final accounting and fulfill specific requirements before they send the balance to you. If you’re unsure where your lawyer is in the process, contact your law firm for assistance.
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