Typically, How Long Does a Settlement Check Take to Clear?

If you are waiting for a personal injury settlement, the process can take time. With medical expenses piling up, most accident injury victims are eager to receive their compensation and start using the money to get back on track financially.

With so many variables impacting personal injury claims, your case could take weeks or months to settle. The more you learn about the settlement check timeline, the more confidently you can navigate this process.

The precise timeline will differ according to the complexity of your case and the efficiency of those dealing with the claim.

5 Steps to Receiving Your Settlement Check

Once negotiations are complete, you should have a fair and reasonable settlement offer from the insurer of the at-fault party. You won’t get your check quite yet though.

  1. Signing of releases and other documentation
  2. The insurer processes the release form and cuts a check
  3. Your attorney deposits the check in a trust account then pays any medical liens
  4. Your lawyer will deduct all legal fees and costs from the settlement
  5. You will receive your final settlement check

1) Signing of releases and other documentation

Once you reach a settlement with the insurer, the attorneys will then draft a sequence of release forms. The forms might be straightforward, or they could contain detailed conditions and terms that your lawyer needs to read over very closely.

Negotiations about settlement terms can drag on for some time. Once the draft release forms are in their final state, you need to review and sign these forms. Your attorney will then return the signed release forms to the insurer.

2) The insurer processes the release form and cuts a check

Once the insurer receives the signed release forms, they should be processed reasonably quickly.

Although this process typically runs smoothly, various reasons can cause delays, including simple clerical error. If you experience prolonged delays at this stage of proceedings, contact your attorney for assistance.

When the release forms are processed, the insurer cuts a check payable to both you and your attorney. The insurer then sends the check to the offices of your attorney.

3) Your attorney deposits the check in a trust account then pays any medical liens

Your attorney will deposit your settlement check into the trust or escrow account at the law firm. This is a mandatory part of the settlement process. Once the check clears, your attorney distributes your settlement money.

It is likely that your attorney will need to settle various unpaid debts associated with your accident injuries from your settlement. These might include:

  • Unpaid bills with medical providers.
  • Payments to your health insurance company if they covered medical treatment related to your injuries.
  • Medicaid bills, if this covered medical care related to your accident injuries.
  • Medicare bills, if this covered medical care related to your accident injuries.
  • Unpaid child support.

Ignoring these liens from insurance companies, government agencies, or medical providers could trigger serious penalties. It is vital to pay these liens from your settlement funds.

Speak with your lawyer if you have any questions about liens and how they impact your settlement.

4) Your lawyer will deduct all legal fees and costs from the settlement

Once your attorney has paid any outstanding liens, they will then deduct the agreed-upon legal fees and costs from your settlement. You will have signed an attorney-client contract at the beginning of your case outlining the percentage of your settlement payable in legal fees. This will typically amount to one-third of the settlement value.

Legal costs and expenses can vary widely depending on the specifics of your case. Costs can include:

  • Expert witness fees.
  • Depositions.
  • Court reporting.
  • Gathering medical evidence and medical records.

Make sure you get an itemized statement breaking down your legal costs. If you have any concerns about these costs or fees, speak with your personal injury attorney.

5) You will receive your final settlement check

With the release signed and returned, the check cleared, and all outstanding bills, liens, and legal costs deducted, your attorney will send you the remainder of your settlement.

What Causes Delays in the Settlement Process?

Once a settlement agreement is reached, it should not take more than a couple of weeks for your check to arrive at the law offices of your attorney. From there, the above steps will unfold before you receive the remainder of the settlement with all costs deducted.

There are many elements that can influence the timeline of the settlement and payment process, though.

Often, there are delays between the insurance company receiving your signed settlement agreement and writing your settlement check. Aside from pure inefficiency, some insurance companies will only write checks on certain weekdays. Some insurers will only process payments a few times each month.

Beyond this, weekends and bank holidays can disrupt the payment process. If a settlement check is received on Friday, for instance, it is unlikely to be deposited into a trust account at your law firm until the bank reopens on Monday.

How to Best Prepare for a Delay in Receiving Settlement Funds

If you are realistic about the timeline involved from signing the release forms to receiving the remainder of your settlement after the check clears and all deductions are made, you are looking at more than a month.

Some people waiting for settlement funds use savings as a tide-over measure. Others use credit cards or apply for personal loans to help meet expenses while waiting for a settlement check.

Insurance of various types can come in handy, from health insurance and car insurance to Medicaid and Medicare.

Another option is to explore pre-settlement funding. If you have legal representation and a strong personal injury claim, you can borrow a percentage of this anticipated settlement in the form of a cash advance. If you win your case, you repay the principal plus a funding fee and interest, compounded monthly. If you lose your case, you repay nothing.

Always check the terms and conditions of any pre-settlement funding offer you are considering and consult your attorney before signing any agreements.

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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