How Are Personal Injury Settlements Paid Out?
After reaching a personal injury settlement, the payout process involves several steps that can affect both the timing and the final amount you receive.
What Happens After a Settlement Is Reached
Once both sides agree on a settlement amount, the insurance company does not issue payment immediately. The first step usually involves signing a settlement agreement and release. This document confirms that you agree to resolve the claim and waive the right to pursue further legal action related to the accident.
Insurance companies will not issue payment until the signed release is returned. After the release is processed, Texas insurers typically issue a settlement check within several weeks. Delays may occur if additional documentation is required or if multiple parties have an interest in the settlement funds.
Who Receives the Settlement Check
In most Texas personal injury cases, the settlement check is made payable to both the injured person and their attorney. This protects all parties and ensures that legal fees and outstanding obligations are handled correctly. The check is deposited into the attorney’s trust account, where the funds are held until distribution is complete.
This process ensures transparency and proper handling of settlement funds in compliance with Texas legal and ethical rules.
Paying Medical Liens and Expenses
Before you receive your portion of the settlement, certain expenses must be paid. These may include:
- Medical bills related to the injury
- Health insurance or Medicare liens
- Hospital or provider liens
- Case-related costs advanced by your attorney
Texas law allows healthcare providers and insurers to assert liens against settlement proceeds. Your attorney reviews and negotiates these liens to reduce the amount deducted whenever possible. Resolving liens correctly prevents future collection actions and protects your financial interests.
Attorney’s Fees and Case Costs
Most Texas personal injury lawyers work on a contingency fee basis. This means the attorney receives a percentage of the settlement only if the case resolves successfully. The agreed-upon fee is deducted from the settlement after lien resolution and before the final payout to the client.
Case costs may also be deducted. These can include filing fees, expert witness costs, medical record retrieval fees, and investigation expenses. Your attorney should provide a clear breakdown showing how the settlement funds are distributed.
How You Receive Your Settlement Funds
After liens, fees, and costs are resolved, the remaining funds are disbursed to you. This typically occurs through a check or direct deposit, depending on the firm’s procedures. The timing varies, but most clients receive their funds within weeks after all obligations are satisfied.
In cases involving large settlements or long-term injuries, structured settlements may be used. A structured settlement provides periodic payments over time rather than a single lump sum. This approach may help manage long-term medical expenses and financial stability.
Why Settlement Timing Can Vary
Several factors affect how quickly settlement funds are paid, including:
- The insurance company’s internal processing time.
- The number and complexity of medical liens.
- Whether Medicare or other government programs are involved.
- Whether multiple parties must sign off on the distribution.
While delays can be frustrating, proper handling ensures you receive the correct amount and avoid future legal or financial issues.
To discuss your personal injury case, reach out today and schedule a free consultation.