How Long Can a Lawyer Hold Your Settlement Check?

Learn More About What to Expect After Your Settlement Is Finalized

If you have been involved in an accident and sustained injuries, litigation can be time-consuming.

After months or even years of wrangling, you finally reach a settlement, but accessing your funds could take longer than you expected.

In the worst-case scenario, you could find an attorney holding your settlement check for months, delaying your access to cash when you need it most.

The timeline for settlement checks is just another hurdle to navigate as you work to resolve your claim. We’ll highlight what to expect in terms of delays so you have a clearer idea of when you will receive your settlement check, as well as what causes these delays in the first place.

What Causes Delays with Settlement Checks?

The specifics of your case and settlement agreement mean there is no fixed timeline for the delivery of your settlement check. Some settlements finalize in as little as six weeks, while others drag on for several months before being resolved.

There are many reasons for delays in settlement checks. The following are some of the most common:

Release Forms

The release form is the first document you must sign to get your settlement check. In this form, which constitutes a legally binding agreement, you state that you will pursue no further legal action against the defendant for this specific case. Signing this release form is normally a prerequisite for settlement.

Don’t panic if you have concurrent lawsuits against this defendant for a separate matter. Signing this release form for your settlement does not mean you must stop pursuing separate claims.

The release form should state which specific claims you are releasing the defendant’s insurance company from.

Ensure your attorney reviews this agreement to make certain the terms are fair and reasonable.

Depending on the number of parties involved in your case, you might need to sign several release forms.

While it rarely happens, you might find your settlement check is delayed if the defendant disagrees with the provisions in the release form. In this event, the release form will need to be redrafted and re-signed.

Check Clearance

The defendant will normally send the settlement check to your attorney. The attorney will typically hold the check in an escrow or trust account until it clears. This usually takes five to seven days for larger settlement checks.

Your lawyer then deducts the cost of their legal services and pays any outstanding bills and liens on your behalf. When all financial obligations are honored, your attorney sends you the remaining funds, either by wire transfer or by mail.

Paying Liens and Bills

Anyone involved in a personal injury case may have outstanding medical bills and sometimes liens. It is your legal obligation to settle these bills once your case settles.

As outlined above, your lawyer should make these payments directly from your settlement funds before deducting their legal fees and issuing you the remainder.

Most liens can be settled expediently, unless the government has placed a lien against your settlement. When liens involve government-funded programs like Medicaid and Medicare, resolving them can take months.

Most bills related to your case will have a fixed amount, but in some cases, your attorney may need to negotiate payment for services like private investigations. This can take time and delay the issuance of your settlement check. Being patient is usually in your best financial interest.

How About a Structured Settlement Payment?

Occasionally, a defendant might pay via a structured settlement. While a lump-sum payment pays you in full, a structured settlement provides compensation over time.

If your case involves a minor or an especially severe injury requiring ongoing and extensive medical care, you could receive a structured settlement.

Structured settlements usually involve an annuity set up for the victim, which pays out on a fixed schedule.

When faced with the possibility of a structured settlement payout, ask your lawyer to review the terms of the agreement to determine whether it is the best option. Blindly agreeing to a structured settlement without legal consultation could lead to added risk, financial complications, and unexpected delays in your settlement.

Is It Possible to Hasten Delivery of a Settlement Check?

What can you do if you need your settlement check as quickly as possible?

Well, there are some simple ways to speed up this process.

As you near a settlement, draft a release form ahead of time. This agreement will then be in place when required.

After this, start working with your attorney to calculate your bills and liens. You can do this while the defendant is processing the claim release form.

Beyond this, always reply promptly to requests from your lawyer if you’re looking for a streamlined settlement payout.

What can you do if you still find yourself waiting for your settlement check while short of funds for pressing expenses?

Should I Get a Settlement Advance?

Settlement funding goes by many names, including:

• Pre-settlement funding
• Lawsuit loans
• Litigation financing
• Legal cash advance

This form of funding is a cash advance against your expected settlement in exchange for a portion of that settlement. It is risk-free: you pay nothing until you settle your case, and you pay nothing at all if you lose your case.

The non-recourse nature of this financing means there is no credit check. You won’t need to provide proof of income or verification of your employment status either.

You can use a lawsuit cash advance for any purpose at all, so you get some valuable breathing space when you need it most.

The downside of this type of litigation financing is the typically high rate of interest, compounding monthly and often mounting substantially if your case takes a long time to settle.

You should consider a lawsuit loan only as a last resort and after you have explored all superior alternatives for financing. As long as you are aware of the potentially high cost of a cash advance and borrow only what you need, pre-settlement funding can provide a vital source of funding for those expecting an imminent settlement.

[RELATED ARTICLES]:

• How Long Does It Take to Get a Lawsuit Loan?
• How Do You Reject a Personal Injury Settlement Offer?