You may believe that your claim is over after reaching an insurance settlement agreement. However, you will then have to wait for your settlement check to arrive — before distributing it to clear any existing debts. Knowing how personal injury settlements are generally paid out will give you a better idea of what to anticipate in the days and weeks ahead.
A Houston personal injury lawyer at West Loop Law and the Law Office of Nhan Nguyen, MD, JD can help walk you through the personal injury settlement process, including how and when you will receive your compensation.
How Long Does It Take to Receive a Settlement Check?
This is largely contingent on the specific circumstances or your case, as well as considerations including how long it takes the insurance company’s accountant to issue the check. With that said, insurance firms are bound by state-imposed deadlines and time restrictions.
Texas state law requires that insurance providers have 15 days to evaluate a claim and make a decision on whether to accept or reject it. With adequate grounds and a clear explanation, the insurance provider can extend this to 45 days. The insurer has five business days to send the settlement payment upon accepting the claim.
Once your check has been sent out, it might take up to two weeks to arrive in the mail. If you do not get a check within this time frame, the insurance provider may be found guilty of bad faith by delaying your payment.
The Difference Between a Lump-Sum & Structured Settlement
It is entirely up to you how your compensation is paid out. You have the option of receiving a lump-sum payment or a structured settlement. A lump-sum payout means that you would receive your whole settlement in one payment. A structured settlement is one that pays you in increments over time. If you want to ensure you don’t spend all of your settlement at one time, in the event that you need to be sure that you are able to cover future expenses, a structured settlement may be a good option.
Medical Bills and Liens
Multiple parties may be entitled to a share of your reward once you get your settlement payment. A medical lien may be filed against your settlement by the hospital that covered for your medical services in advance. The healthcare facility will instantly receive a percentage of your settlement to settle your medical bills if you have a medical lien. Your settlement may also be subject to other debts, such as:
- mechanics liens
- health insurance liens, and
- employer liens.
With the aid of a trusted attorney, you can often negotiate the value of existing liens.
Legal and Attorney’s Fees
You will pay any outstanding legal bills and attorney’s fees after any existing liens on the settlement have been cleared. Most personal injury attorneys work on a contingency fee basis, which means you won’t have to pay anything unless you get paid. Once you’ve reached an agreement, you’ll pay your lawyer a portion of the entire sum as compensation for his or her efforts. The amount you will pay is determined by the terms of your agreement with the lawyer. After you’ve paid off all of your liens and debts, you can keep the remaining monetary compensation – usually the portion of the settlement that goes toward pain and suffering damages.
How Is a Personal Injury Settlement Taxed?
When you obtain a settlement, the last thing to worry about is paying your taxes. In the tax year in which you got the settlement payment, you could owe taxes on a percentage of your award. Injury settlements are often not taxed as income by the federal government. However, if you were awarded punitive damages, this portion of your settlement may be taxable. If you deducted medical expenditures in a prior tax year, you may have to pay taxes on a settlement for medical expenses.
Can I Reopen a Claim After It Has Settled?
In most cases, after you’ve settled a claim and received your settlement money, your case is finished. You are not legally permitted to reopen the case or engage in further discussions with the insurance provider for a different sum. This is why you must ensure that the settlement amount appropriately addresses your injuries and losses before accepting any offer from the insurer.
An accomplished attorney can help you determine if the settlement offer is enough to cover the current and future expenses associated with your accident.
Personal Injury Lawyers in Houston TX
If you or a loved one has been injured as a result of negligent actions of another party, contact the Houston personal injury lawyers at West Loop Law and the Law Office of Nhan Nguyen, MD, JD for help. Our legal team possesses the essential information, abilities, and legal competence to successfully handle every aspect of your claim. We can speak with the insurers to defend your right to a favorable settlement or verdict, and if required, file a lawsuit on your behalf in court to vindicate your rights. We represent the interests of ordinary people, not the demands of big businesses. Nhan Nguyen, MD, JD and Nader Rabie, JD can help you hold a negligent individual or business accountable for their conduct following a catastrophic accident.
Call West Loop Law and the Law Office of Nhan Nguyen, MD, JD now at (713) 840-7200 to book a consultation and discuss your case if you or a loved one has been unfairly injured in a serious accident.
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