Receiving a settlement check is a huge relief for people hurt in accidents. If you have been fighting with insurance companies for months or years and finally reach an agreement, you’ll be sitting on the edge of your seat until the money is deposited in your bank account.
The process of receiving a settlement check in Texas is fairly straightforward, but there are some steps that need to happen before the money ends up in your pocket.
What Is a Settlement?
A settlement is a legal agreement to end a dispute. Usually, a settlement involves one party paying money to another party. However, settlements can also include other terms, such as issuing an apology or abstaining from certain behavior in the future. How long it takes to reach a settlement and get the check varies depending on various factors.
Negotiating a Settlement
The first step in receiving a settlement check is negotiating the settlement. Depending on the type of accident that you experienced, your Austin personal injury lawyer may negotiate with an insurance company or the defendant.
If your lawyer comes to an agreement with the opposing party, you can negotiate a settlement without going to trial. If you can’t reach a fair settlement, it might be in your best interest to file a lawsuit and bring the claim to court. If you win the eventual trial (keep in mind cases can still settle even after a lawsuit is filed), then the defendant will issue a settlement check for the damages you are awarded.
Drafting A Release
Before the defendant issues the settlement check, you will need to sign some additional paperwork. The most important thing is a release. As the name suggests, this releases the defendant from any further liability in the case, even if you develop more injuries in the future.
Essentially, you are agreeing not to sue the defendant or ask for any more damages after the settlement check is issued. This release is drafted by an attorney to make sure it is legally binding and to protect both parties’ rights.
Issuing the Settlement Check to Your Attorney
Once you sign the release, the insurance company will issue the settlement check within five days. The check is made payable to you and your attorney. Your lawyer holds the money in a trust account until it clears, and they’ll then deduct outstanding expenses and liens.
How Long Can a Lawyer Hold Your Settlement Check?
Many clients are concerned about how long a lawyer can hold the settlement check before handing it over to them. A lawyer can hold the lawsuit settlement check until you sign all of the required documents and outstanding liens are paid, including attorney fees. Usually, this process takes just a few weeks or less, depending on how much your lawyer negotiates with lien holders.
Paying Outstanding Liens
If you have any outstanding liens, your lawyer must pay those from the settlement check before giving you the remainder. This process makes sure that your debts are paid. Examples of liens in personal injury cases include:
Your lawyer will work hard to negotiate liens and bills so that you pay the least amount of money from your settlement check. After all, most companies with liens are happy that you hired a lawyer to get you money so they can also receive payment.
Receiving the Settlement Funds
Once all fees, bills, and liens are paid, your lawyer will release the remainder of the settlement funds to you. However, your personal injury settlement may be taxable depending on the type of damages that you received.
At this point, you can use the money how you wish. However, you may have other bills and expenses that need to be paid, and it may be prudent to save some money for future expenses related to your injury.