Your case is finally settled. You’re eager to start spending that money.
Not so fast.
Once you’ve settled your personal injury case, there remains a time period before you can put a check into your bank. Behind the scenes, your attorney and the insurance company are ironing out the final details and tying up all loose ends.
All cases are unique. Most personal injury settlements finalize within 30 days, but any number of factors could speed up or slow down that timeline. You might be lucky and be able to deposit that money in a week. In complex cases involving Medicare you might have to wait six months. There is no hard and fast rule. If you have appropriate expectations, this process is easier to handle.
Keep reading for the six-step process to receiving a personal injury settlement check.
1. Sign a release and other legal documents
Once a settlement in your case is reached, the lawyers will draft a series of release forms. While it’s not necessary for these documents to be long, some defense lawyers and insurance companies may produce 10 to 20-page release documents.
Your attorney will read the release carefully and iron out any issues. This process may take days, but they’ll generally reach an agreement. If the settlement is controversial or paints the defendant in a poor light, the other side may insist on a confidential settlement. That will slow down the settlement considerably.
Once the release is approved by your lawyer, they’ll have you sign it. Read it carefully and discuss any questions you have with your lawyer before signing. There is no going back. You will usually have to sign it in front of a notary.
- Click here to see a sample settlement release form.
- Why are some personal injury settlements confidential?
2. Insurance company processes release and writes a check
After the insurance company receives your signed release forms, they’ll process them and send a check to your attorney. This check will be for the agreed upon amount, but as you’ll see below, many things need to happen before you put money in your bank account.
Insurance companies typically send a check within 7-10 business days. While this process should be smooth and quick, insurance companies vary on how and when they’ll issue payment. Reasons include:
- Clerical errors
- Holding onto money as long as possible to accrue interest
3. Lawyer deposits check into trust account
Once your attorney receives the insurance check, they will then put it into a special trust or escrow account, as required by law.
Your settlement check must clear the bank. Banks require that the check be “good” before they’ll issue funds. Once this happens, your lawyer and their legal team can proceed to the next step.
Most banks require funds to be held for seven business days to make sure the check is good and has cleared. While delays such as this may be frustrating, they are unavoidable and required. It doesn’t always seem fair, but holding your check is necessary to prevent you from writing bad checks on your account.
Some people wonder what happens to the interest on these trust accounts. Interest on Lawyer Trust Accounts (IOLTA) programs exist in all 50 states, Washington, D.C., and the U.S. Virgin Islands. These programs exist to help fund non-profit organizations that provide civil legal aid for low-income people.
- Click here to read about a mother that used settlement check from her son’s death to steal from law firm.
4. Lawyer pays off your debts
After your settlement check clears through the trust account, your attorney will use the money to pay off your various unpaid debts, known as liens. If you’ve been in an accident, it’s unlikely that you had the cash available to pay out-of-pocket for your treatment. Therefore, your attorney has probably set up liens.
Your attorney might have to send portions of your settlement money to:
- Medical providers with unpaid bills for treatment
- Insurance companies (if they paid for medical treatment)
- Collection agencies
- Settlement advance companies
There are serious penalties for ignoring liens. Doing so puts you into collections. It is important that you and your lawyer resolve these right away.
5. Lawyer deducts legal fees and other costs
Once all your liens are resolved, your attorney will deduct legal fees and costs from your settlement. This shouldn’t come as a surprise, however. Your attorney fees will amount to a certain percentage of your settlement, as outlined in the contract you signed when you hired your attorney.
Various other legal costs and expenses are accrued throughout your case. Countless factors are involved here, and depending on the length and complexity of your case, may include:
- Gathering medical records and evidence
- Expert witness fees
- Filing fees
- Service/process fees
- Paying for deposition transcripts
Some people believe that they’re entitled to recover their attorney fees from the other party if they win. That is not the case. In the United States, each party is responsible for their own legal fees, regardless of the type of case.
Lawyers and their staff should keep detailed records of all legal costs. If you have any concerns about the costs associated with your case, ask for an itemized report and discuss with your attorney.
- Click here to see a sample personal injury contingency fee agreement.
- Click here to read more about attorney fees and costs.
6. You receive a final settlement check
Once all your liens, legal fees and costs have been taken out, you receive the remainder of your settlement money.
How to deposit an insurance settlement check
You’ve gone through the entire process outlined above. The check is finally in your hands. Now, how do you go about depositing it?
Deposit the settlement check just like any normal check. Yes, most personal injury firms still issue paper checks to their clients. When you hand the bank teller the check, they may bring over a manager for authorization, especially if the amount is quite large.
It may take a week to 10 business days for the check to clear and for you to have full access to the funds. Don’t be alarmed. This is normal. After you’ve deposited the check, your bank will likely call the issuing bank to verify that the account has the proper funds for the check to clear.
How to cash an insurance check — without a bank account
You don't necessarily need a bank account to cash an insurance check.
Yes, that's right. No. Bank. Required.
It may require a small fee, but you'll be able to cash the entire amount without a bank account. You’ll have the cash in your hands before the day is over.
If the issuing bank has a location near you, tell the bank teller you'd like to cash the check. Present your identification — a driver's license or state-issued ID — and depending on the bank, there may be a small fee.
Capital One, Citibank and SunTrust offer this service for free. Others charge between $7-20.
You can also cash an insurance settlement check at a Walmart, Kroger or 7-Eleven. At Walmart, the maximum amount that can be cashed is $5,000, with a $6 fee. Checks are cashed instantly.
There is no registration process at Walmart.
At 7-Eleven, some locations have VCOM kiosks that cash checks 24 hours a day. First time customers must complete the membership process, which includes providing ID. Money is available instantly.
You may also cash an insurance check at a check cashing store. Amscot cashes insurance settlement checks up to any amount. All you need to provide is a photo ID and pay a fee.
Moneytree and Check ‘n Go are other check cashing options. Fees and regulations vary based on location.
What to know about structured settlement payments
In some rare cases, a personal injury claim is paid through a structured settlement. A structured settlement is a legal settlement paid out as an annuity rather than in a lump sum, usually with certain tax advantages for the recipient and a savings for the payer.
Structured settlements usually occur when the victim is a minor, or a catastrophic injury results in ongoing and expensive medical treatment and care.
The insurance company will fund an annuity for the victim, a type of insurance contract that pays out guaranteed amounts on a fixed, regular schedule. An annuity might pay out on a monthly or yearly basis.
These type of settlements involve a level of risk for the victim. Certain annuities are only payable during your lifetime — once you die, all payments are terminated. If this seems like a concern for you, speak with your attorney about the terms of your structured settlement.
Davis Law Group Can Help
If you or a loved one has suffered an injury in Washington state, the legal team at Davis Law Group, P.S., is here to help you get the compensation you deserve. Attorney Chris Davis has been practicing law in the Evergreen State for nearly 25 years and has recovered millions in damages for his clients.
Don’t wait another day to contact an experienced personal injury lawyer. Contact Davis Law Group today. Call (206) 727-4000, use the chat feature below or fill out the form on this page for a free case evaluation.