After suffering injuries in an accident caused by someone else, you and your attorney successfully negotiated a settlement with the defendant’s insurance company. Now, you are eagerly awaiting the check. While you are understandably relieved to have the claim settled so that you can move on with your life, you need to understand how your settlement will be paid out and how much of your settlement you will receive.
Process of Obtaining a Settlement Payment
Once all parties involved in your case have agreed to a settlement amount, the process for you to receive your payment begins, and you can expect the following steps:
- You sign a release – First, you will sign a release form. This will confirm that you will not try to obtain additional compensation from the insurance company, and you release them and the at-fault party from any further liability for this accident.
- The insurance company issues a check – After receiving your signed release form, the defendant’s insurance company will cut a check made out to you and your attorney, and they will send the check to your attorney’s office.
- Your attorney deposits the check and pays debts and liens – Your lawyer will deposit the check into their firm’s trust account. They will then use the funds to pay creditors and others who have liens against your settlement for accident-related debts, such as medical providers.
- You get your money – After all liens and expenses have been paid, your attorney will cut you a check.
Under Louisiana state law, the insurance company must pay the settlement amount within 30 days of settling. the insurance company does not pay within that time, they may be acting in bad faith, and you should work with your attorney to seek a resolution.
How Much You Will Actually Receive
Although you may be excited about receiving your settlement, especially if it was a large amount, you must understand that you will not be able to keep all the money you were able to include in the settlement. You will have to pay others for their services and those with liens against your award. These include:
- Medical liens – You may not have been able to pay for all your medical expenses upfront, and you received treatment with the understanding that your medical providers will be compensated after you receive your settlement. This may also include government insurance programs, such as Medicaid, as well as private insurance providers who paid your medical bills.
- Other expenses – You may also have to pay for court fees, postage costs, and other expenses related to your case.
- Attorney fees – Even though your personal injury lawyer likely worked on contingency during your case, they will still expect compensation for their time and for the work of their paralegals and staff for your case. Their agreed-upon fee will come out of the amount that remains after the liens and costs are paid.
Lump Sum or Structured Settlement
In many cases, you can choose to receive your funds as either a lump sum for the full amount or through structured settlement disbursements made over time.
Lump sum payment – This is a one-time payment for the full amount of the settlement. Some people prefer to receive a lump sum because they are ready to close the matter and move on without having to deal with the insurance company any longer.
One possible downside of receiving a lump sum is that you will have all the money at once. If you spend all the money, it is gone forever, and you will have nothing to cover any future medical expenses you and your attorney determined you would have. You should work with a financial adviser who can help you manage your money so that it will serve you over the long run.
Structure settlement – Instead of a lump sum, you may choose to receive your settlement in the form of regular annuity payments. A popular option in cases where the settlement amount is very large, structured settlements allow you to receive your payments over a certain period of time. You may also be able to choose how often you want your checks sent, such as every month or once each year. For example, if you were awarded $1,000,000 in your settlement, you could receive payments of $100,000 a year for ten years.
A major advantage of structured settlements is that you are guaranteed a payment for a specified period. When your payment arrives, you’ll have funds on hand to pay for any ongoing treatment and other costs.
For help with any aspect of your personal injury claim, you can contact the Lake Charles personal injury attorneys of Veron Bice, LLC at [phone-number linked=”true”]. Request a free consultation today.