Can My Lawyer Cash My Settlement Check?

When you receive a settlement award in a personal injury case, the insurer will issue you a check for the amount owed, typically within 30 days of the final settlement agreement. The check will be issued to your law firm and to you.

Usually, you will need to endorse this check, enabling it to be deposited. This does not apply if you gave your lawyer a power of attorney to deposit the check on your behalf. If so, the law firm deposits your settlement check into a trust account, ensuring your funds are not commingled with law firm funds.

The more you know about the whole settlement check process, the less frustrating you should find it.

What is the Settlement Check Process for Personal Injury Cases?

Even though you might be eager to receive funds when your personal injury case finally settles, there is a standard timeframe before you will be able to deposit the settlement check.

It takes anywhere from thirty days to six weeks from the completion of negotiations to receiving funds. That said, there are many variables that can influence this timeframe. Speak with your lawyer if there is a delay beyond this expected duration.

What Steps Does the Settlement Check Process Follow?

Although there is some variation in the time it takes to receive a settlement check, there is nevertheless a specific process that unfolds before funds are ready to deposit. This process occurs as follows:

  1. Signing of forms: Before settlement funds are released, the at-fault party’s defense attorney will draft a release form. You must sign this. The order of settlement contains a number of documents, including the release form. You need to sign this form in order to receive your settlement. By signing the form, you agree to accept the settlement, while at the same time releasing all claims against the at-fault party.
  2. Insurer processes and releases the settlement check: When the insurer received these signed release forms, they will process them and send the settlement check to your attorney. The check will usually be sent within 7 to 10 business days, but there are still some further steps before you can deposit the check in your bank.
  3. Lawyer deposits check into trust account: When your attorney receives your settlement check, they will deposit this into a trust account until the funds are cleared by the issuing bank. This step is required by law to ensure that the money is in place before the law firm sends you the funds.
  4. Debts are paid: Your attorney must pay any liens filed against you, including any unpaid medical bills, previous legal fees, and reimbursements to the insurer.
  5. Legal fees and costs are paid: With all debts and liens paid, your attorney then deducts the pre-agreed fees from the total settlement amount. The contingency fee agreement you signed when retaining legal counsel will outline the percentage your attorney will deduct for legal fees.
  6. Receiving settlement check: Your lawyer will write you a check for the remaining funds once all fees are paid. This is likely to arrive within six weeks. At this point, you can deposit the funds into your personal account.

Remember: Large Settlement Might Be Handled Differently

All personal injury cases are unique, and some very large settlements might be paid through an annuity. Rather than the insurer making a lump-sum payment, instead they make regular payments over time.

If this happens, the insurer will send the initial payment to the law firm so they can complete a final accounting. A final accounting ensures that all expenses, medical bills, and legal fees are paid.

You then make an arrangement with your attorney to receive payments directly from the annuity for the duration of the payment period.

Once the final accounting is complete, the law firm no longer has any legal obligation.

Regardless of the type of settlement, things do not always go according to plan with settlement checks.

What are the Most Common Reasons for Delays with Settlement Checks?

If you have been waiting for six weeks and there is still no sign of a settlement check, it’s time to take action.

The process of receiving a settlement check is anyway prolonged, so there is no reason for an insurer company to unreasonably delay your payment further.

The following legitimate reasons sometimes result in delays in settlement checks being issued:

  • Incorrectly signed release form
  • Check still awaiting bank clearance
  • Case involves an estate or a minor
  • Attorney is still negotiating with debtors and lien holders

If you are unsure why your settlement check is delayed, contact your lawyer. If you did not retain legal counsel, contact the issuing insurer directly to establish why your check is delayed.

What To Do If Your Attorney Refuses to Give You Copies of the Final Accounting?

If your lawyer refuses to give you a copy of the check or the final accounting, this gives you cause for legal action against the law firm.

Fortunately, it is rare that a law firm will mishandle client funds, so this should not become an issue.

Hiring a Personal Injury Attorney

To maximize the settlement you get in your personal injury case, you should retain an experienced personal injury attorney. They can help you prepare a strong case, deal with the insurer, and file a lawsuit if you fail to agree upon a reasonable settlement.

Ask the law firm about their accounting practices and ask how the final settlement will be handled. The more you know about this process in advance, the less frustrating you will find any potential delays.

If you are unhappy with any element of your initial consultation, look for another lawyer to better represent you.

Managing Member at Uplift Legal Funding
Jared Stern is an experienced financial professional with six years of experience in the pre-settlement funding industry. After graduating from UC Berkeley with a degree in economics in 2014, Jared began his career in Morgan Stanley's mergers and acquisitions investment banking division. After working with another pre-settlement funding company for two years, Jared founded Uplift Legal Funding in 2017 to give injured plaintiffs a better choice in lawsuit loans. Check Jared out on: LinkedIn | Legal Reader | Attorney At Law Magazine
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