How are Personal Injury Settlements Paid Out?
Personal Injury - May 26, 2021
Personal injury settlements are crucial for those who have sustained an injury caused by the careless or negligent actions of another individual. However, the process of obtaining a settlement after an injury occurs can be fraught with challenges. Individuals in these circumstances often have to use a personal injury attorney because handling these situations alone can be nearly impossible. This is especially true when going up against well-funded insurance carriers. However, after a settlement has been reached, how do injury victims receive the money? Here, we will discuss how personal injury settlements are paid out.
We Need to Look at Who is Owed Money
When a settlement is agreed upon in a personal injury case, the matter is truly over with. There is no way to reopen an injury claim after a settlement has already been made. In these situations, the insurance company involved will require the injury victim to sign a release of all future claims to assure them that you will not reopen the matter moving forward.
A settlement check will show the total amount paid for the injury claim. In general, the recipients of the check will not have a list of how this total amount is categorized. The reality is that there are various parties that will need to be paid from the proceeds of the final settlement. Once a settlement check comes through, it will go directly to your attorney, who will then disburse the funds where they need to go.
Medical bills and liens
In most personal injury cases, there will be unpaid medical bills that need to be satisfied out of the settlement amount. Often, doctors will work with you and your attorney to reduce your bills if necessary to leave you a reasonable settlement amount. However, there are times when medical providers will file a lien against the injury claim. They do this in order to protect their right to collect any unpaid medical bills from the settlement you received. A lien will result in the medical provider’s name appearing on your settlement draft along with your name and your attorney’s name.
Legal fees and costs
If you work with an attorney for your injury case, it is very likely that the attorney will operate on a contingency fee basis. This means that the injury victim owes no upfront or out-of-pocket costs while their case is ongoing, but they will have to pay their attorney an agreed-upon percentage of the final settlement once the case is over. The percentage of the settlement or judgment that an attorney keeps will vary depending on the initial agreement, but this generally hovers around the 30% to 33% range.
We do want to point out that, even though this may seem like a large percentage to pay an attorney, most injury victims generally receive larger settlements when they work with an attorney, even after all of the legal fees have been paid. An attorney is an invaluable asset who will have the resources and legal knowledge necessary to navigate these tricky claims.
Your final compensation
After all of the medical bills and legal fees have been paid, you will keep the remainder of the settlement. In general, a large portion of the money that you keep will revolve around the compensation for non-economic damages (your pain and suffering) and lost income.