How Long Does It Take to Get Paid After a Settlement?

The Factors That Influence Your Settlement Payout Timeline

There is no single, one-size-fits-all answer to how long it takes to get paid. The timeline is influenced by various factors unique to your case. The path from a verbal or written settlement agreement to having funds in hand is a multi-stage process governed by legal procedures, administrative tasks, and financial protocols.

The key elements that determine the speed of your payout include:

• The Insurance Company: The size and efficiency of the at-fault party's insurance company play a significant role. Large, bureaucratic insurers sometimes move slower than smaller, more agile ones. Their internal procedures for approving and issuing payments dictate the initial part of the timeline.
• The Complexity of the Settlement Agreement: A straightforward settlement for a car accident with a single plaintiff and defendant is processed faster than a complex case involving multiple parties, significant future medical costs, or a wrongful death claim.
• The Presence of Liens: This is one of the most significant factors. If other parties have a legal claim to a portion of your settlement funds, these claims, known as liens, must be resolved. This includes claims from health insurance providers, hospitals, Medicare, or Medicaid. Negotiating and satisfying these liens takes time.
• Your Promptness: Your cooperation in signing documents, such as the final release agreement, is essential. Delays in returning signed paperwork to your attorney will naturally delay the entire process.

Your attorney proactively manages these factors, working to streamline the process and resolve any issues that arise as quickly as possible.

The Step-by-Step Journey of Your Settlement Funds

To understand the timeline, it is helpful to see the specific steps that must occur after you and the opposing party agree on a settlement number. The process is designed to protect all parties involved and ensure every financial and legal obligation is met.

Step 1: Drafting and Signing the Settlement and Release Agreement

Once a settlement amount is agreed upon, it is not yet final. The agreement must be put into a formal, legally binding contract. The defense attorney or the insurance company’s representative will draft this document, known as a Settlement and Release Agreement.

This document does more than just state the payment amount. It includes specific legal language outlining the terms of the settlement. It contains a "release" clause. By signing the release, you formally give up your right to pursue any further legal action against the at-fault party for the same incident. It is a full and final resolution of your claim.

Step 2: The Insurance Company Processes the Paperwork and Issues the Check

After the signed release agreement is sent back to the insurance company, their internal processes take over. They will process the paperwork, secure internal approvals, and cut the settlement check. This part of the process typically takes anywhere from two to six weeks, depending on the insurer.

The settlement check is not sent directly to you. According to legal and ethical rules, the check is made payable to both you and your law firm.

 It is then mailed to our office. This is a critical protective measure. It ensures that all outstanding obligations related to your case are handled adequately before the funds are distributed to you.

Step 3: Depositing the Settlement Check into a Trust Account

Upon receiving the check, your personal injury lawyer deposits it into a special bank account known as a client trust account or IOLTA (Interest on Lawyers' Trust Accounts). This is not the firm’s business account. It is a highly regulated account used exclusively to hold client funds separately from the firm's own money.

Banks often place a hold on large checks to ensure they clear. This is a standard banking procedure to prevent fraud. The hold period varies but may last from a few days to over a week. We cannot disburse any funds from the settlement until the check has fully cleared the bank and the funds are verified.

Step 4: Resolving All Liens and Outstanding Bills

This is often the most time-consuming and complex part of the post-settlement process. A lien is a legal right or claim that a third party has on your settlement proceeds as reimbursement for costs they covered related to your injury. 

It is your lawyer's legal and ethical duty to identify and satisfy all known liens before distributing your final payment.

Common liens in personal injury cases include:

• Medical Liens: Hospitals, doctors, chiropractors, and physical therapists who provided treatment on the promise of being paid from a future settlement have a lien for their services.
• Health Insurance Subrogation: If your health insurance company (like Blue Cross Blue Shield, Aetna, or UnitedHealthcare) paid for your accident-related medical treatment, they have a right of subrogation. This means they have a legal right to be reimbursed from your settlement.
• Government Liens: If Medicare or Medicaid paid for any of your medical care, federal law requires that they are reimbursed from your settlement. Dealing with these government agencies is often a slow and bureaucratic process that adds time to the final payout.
• Child Support Liens: In some cases, outstanding child support obligations may result in a lien against your settlement.

A crucial part of your lawyers job is not just to pay these liens but to actively negotiate them. We contact each lienholder and work to reduce the amount you have to pay back. 

Every dollar we save you in lien negotiations goes directly into your pocket. This negotiation process adds immense value but also requires time and expertise.

Step 5: Deducting Attorney’s Fees and Case Expenses

Once the liens are negotiated and the final payoff amounts are confirmed, the next step is to deduct the agreed-upon legal fees and case expenses. Lorenz & Lorenz, PLLC, operates on a contingency fee basis. 

This means we only get paid if we win your case. Our fee is a pre-determined percentage of the total settlement amount, which is outlined clearly in the agreement you sign at the beginning of our representation.

In addition to the attorney's fee, case expenses are also reimbursed from the settlement. These are the out-of-pocket costs the firm paid to build your case, which may include:

• Court filing fees
• Fees for obtaining medical records and police reports
• Deposition and court reporter costs
• Costs for hiring expert witnesses (such as accident reconstructionists or medical experts)

We provide you with a detailed, itemized settlement statement that clearly lists the gross settlement amount and breaks down every single deduction, including all lien payments, attorney’s fees, and case expenses. Transparency is a cornerstone of our practice.

Step 6: You Receive Your Final Settlement Check

After all liens, bills, fees, and expenses are paid, the remaining amount is your net settlement. This is the money you take home. We will issue a check to you for this final amount from our client trust account. You will also receive a copy of the final settlement statement for your records.

When your lawyer deposits the insurance company's check into our trust account, negotiating liens and preparing your final payment typically takes two to six weeks. This stage might take longer if liens are particularly complex, such as those involving Medicare.