How Are Personal Injury Settlements Paid Out?

by Terry Bryant

Whether your personal injury claim has been filed and you are waiting for your payments, or you haven’t even begun the process and are simply considering opening a claim, the process of personal injury claims is quite intricate. You are right to look for answers. After all, the goal of these claims is to obtain the money you need to cover the costs of your injury in its entirety. So, how are personal injury settlements paid out?

It is important for you to know that payments might come in different forms. Payments may come in one lump sum or may be broken up into several installments. What determines how your personal injury settlement will be paid out is established in the terms of the agreement your attorney reaches with the defendant and their representatives.

When a case is resolved successfully, it usually takes one of two paths: settlement or trial. A settlement can happen at any point after you have completed your treatment, and in some instances, it might even be during trial or, in some cases, after a verdict but before an appeal. However, settlements are typically reached before there is a need for trial. As a matter of fact, 95% of civil cases settle before trial. Let’s take an in-depth look at what you can expect from these very different scenarios.

The Difference Between Payments: After a Trial v. After a Settlement

Payments After a Settlement

Once a settlement is agreed upon, you should start receiving payments in accordance with the terms of that agreement. There are some processes that could delay payment, such as the preparation and approval of the release. A “release” is a document that establishes the terms of the settlement. As its name clues you in, a release dismisses your claims and does away with all liability. The defendant and their representatives will usually ask that the document be signed before payment is issued.

Once the release is approved by you and your attorney, you will receive payments in one lump sum or installments, depending on what is stated in the release. Signing a release of all claims will have significant legal consequences in your personal injury claim, so make sure you fully understand it.

Payments After a Trial

Payments after a favorable verdict can be complicated by an appeal, which the defendant and their legal representatives might file once a jury awards you damages. This can delay the payments you are entitled to receive, but your attorney will do their best to speed up the process as much as possible. Patience is a virtue in these matters, so do your best to let the process unfold.

Depending on how your case is resolved, your payments should start coming in once the settlement is reached or any pending appeals are dealt with. You will then begin to work closely with your attorney to cover the expenses and make sure these are all satisfied.

Where Do the Payments Come From?

This depends on several factors. In many cases, the payments come from an insurance company that represents the defendant, especially if the defendant’s policy covers the costs of your injuries, which is often the case in car accident cases. If the defendant is a business, payments could come from several parties, including the business itself, an insurance company, or a third party that is tasked with administering payments.

Covering Your Outstanding Bills and Expenses

You’ll first want to make sure that your settlement goes toward any outstanding bills or expenses you might face.

Payment of Liens

You may have liens against your personal injury settlement. A lien is a legal right that allows a third party to obtain portions of your personal injury settlement for services provided to you during your time of need. Liens exist to help people and companies get what they are owed. Once a lien has been properly filed and you or your attorney have been properly served with notice, the lienholder will receive the first proceeds from your settlement. Some lienholders will not take less than the full amount owed, but many are willing to accept less. Lien negotiations are likely to increase your settlement while maximizing the amount you will receive. Seasoned personal injury attorneys are experienced in negotiating large liens and will do so effectively. It is best to work closely with your attorney to help you understand your options and legal rights.

If you receive your payments in one lump sum, then make sure you allocate what is needed to cover these expenses. For example, you might have several outstanding medical bills. You might owe money for vehicle repairs or a new vehicle.  If you receive several payments, allocate the initial installments toward your outstanding bills.

Attorney’s Fees
Most personal injury attorneys offer their services on a “contingency fee” basis. This means that they will not get paid unless and until your case settles or results in a financial award through a verdict in your favor at trial. This will be clearly expressed in writing in your contract with your attorney – often called a “Power of Attorney” or “Contingency Fee Agreement” or “Fee Agreement.” You will have the opportunity to carefully read and review this, and to have any questions answered before you sign this. Your attorney’s fee will be covered by the settlement you receive. In some types of cases, an attorney’s fees might be covered by the defendant. However, typically, the attorney’s fee will come out of the payments you receive.

How Are Personal Injury Settlements Paid Out?

It depends on the terms of the agreement you reach with the defendant and their representatives. Any outstanding liens you face will also be an essential factor in how your personal injury settlements are paid out.

Are You Considering a Personal Injury Claim?

If you or a loved one needs payment for outstanding medical bills or property damage, you should consider filing a claim to get the compensation you are rightfully entitled to. These claims can be the difference between a manageable situation and a financial catastrophe. When your injury is someone else’s fault, you should never resign yourself to paying the price for their mistakes.

We can help you determine whether to take the next steps in filing a personal injury claim. Terry Bryant is a Board Certified personal injury trial lawyer (by the Texas Board of Legal Specialization) and a former judge in Texas.

If you have questions, please call Terry Bryant Accident & Injury Law at (713) 973-8888 or fill out our online contact form. We offer free consultations, and we work on a contingency fee basis, which means that we don’t get paid unless we win your case.