How Long Does A Settlement Check Take To Clear?

How Long Does A Settlement Check Take To Clear?

How Long Does A Settlement Check Take To Clear

A settlement check can take about six weeks after negotiations between parties to clear. However, this estimated period can be delayed by weeks or even months by a number of variables, which can put a lot of stress on injured victims. Even after a check is received by your law firm or personal injury attorney, they still have to make all necessary deductions before you receive your balance of the settlement award.

How long does a settlement check take to clear, and what are the factors that can delay your settlement check timeline? Read on and find out what you can do to shorten the process, as well as how pre-settlement funds can help when you experience prolonged delays.

The Personal Injury Settlement Process

According to the Bureau of Justice, just 4% of all personal injury claims go to trial. In most cases, you or your personal injury lawyer will have an out-of-court agreement with the at-fault party and their insurance company.

A settlement is a legally binding agreement that concludes the dispute between yourself and the at-fault party. Once a case has been settled, you won’t be entitled to make a later claim for damages related to the incident involving yourself and the at-fault party.

Settling a personal injury claim is typically in the interest of both parties, as it saves you and the at-fault party valuable time and money spent waiting for the court’s decision. Once a settlement agreement has been successfully negotiated, the steps towards your check’s release can start.

The 5 Steps To Getting Your Settlement Funds

Accepting the settlement funds offer from the other party is only the beginning. These are the five steps that need to be completed before your settlement money can be deposited into your escrow account.

Signing Of Release Forms And Other Documents

Signing a release form shows that you agree to the settlement money being offered and you will no longer pursue the other party for later legal claims related to the events that caused your personal injury.

Both you and your lawyer should read the form carefully before you sign it. If there are any terms you don’t understand, don’t be afraid to ask for a simplified explanation. This ensures that you know the precise conditions you’ve agreed to. Your attorney will then send the signed release forms back to the other party’s insurance company.

Note that, if there are multiple parties involved, you may need to sign several release forms. One party may disagree with some of the terms in the form, which will result in a new form being drafted.

Processing For Signed Release Forms

Once the other party’s insurance company receives your signed release forms, it will start processing these. On average, this should take the insurance company seven to ten business days to complete. However, note that some companies may take the maximum allotted time period of 30 days to finish processing your forms.

After the insurance company processes your forms, it will issue a check and send it to your law firm. The check is typically payable to both you and your personal injury lawyer.

Depositing The Settlement Proceeds Check Into Escrow

Once your lawyer has received the personal injury claim settlement check, they will deposit this into an escrow or trust account. It will stay in this account until the issuing bank clears it to ensure that the at-fault party’s insurance company has enough money to pay for your settlement agreement.

Covering Various Unpaid Debts

When your settlement check has been cleared by the bank, your lawyer will use a portion of this money to pay off unpaid bills related to your personal injury case. These include:

  • Medical treatment bills
  • Health insurance company payments, if they covered medical expenses related to your injury
  • Legal fees to any attorneys you may have hired before your previous counsel
  • Child support

It’s important to pay your liens to medical providers, insurers, and government agencies. Otherwise, you may incur serious penalties. Talk to your lawyer if you have any questions about how these debts affect your settlement.

Paying Legal Fees

After paying off the outstanding medical liens and debts to other related parties, your lawyer will deduct the agreed-upon legal costs from your settlement money. Before you hire a lawyer, you sign an attorney-client contract that specifies the percent of the settlement they will receive as legal costs.

Legal costs can vary from case to case, but they typically cover the following:

  • Gathering medical records and other evidence from medical providers
  • Expert witness fees
  • Court reporting costs
  • Deposition-related costs

Ask your lawyer for an itemized statement of your legal expenses, especially if you have any issues with the total cost.

Receiving The Remainder Of Your Settlement Money

Once you’ve checked your lawyer’s itemized statement and paid off your legal bills and liens, your lawyer will send you a check amounting to the remainder of your settlement.

What Are The Common Reasons For A Delayed Personal Injury Settlement Check?

While it shouldn’t take more than a couple of weeks for your attorney to receive a settlement check after the settlement process has successfully concluded, there are some things that can delay payment. Here are the most common reasons why victims experience prolonged delays in their settlements:

Prolonged Processing By Insurance Companies

On average, insurers take seven to ten business days to process your release forms. However, some companies only write checks on certain days of the week or process payments only several times a month.

In other instances, there may be simple clerical errors that delay the processing of your paperwork. All of these internal issues and protocols can extend the process up to a maximum of 30 days.

Check Clearance Times

When your attorney’s law offices receive the check from the at-fault party’s insurer, they deposit it into an escrow or trust account and wait for the issuing bank to clear it. It can take five to seven days for the check to be cleared.

However, expect delays if this check is deposited into an escrow account on a weekend or a holiday such as Labor Day or Thanksgiving. This is because weekends and holidays are not included in the issuing bank’s clearing period.

Complications With Liens And Bills

If you have outstanding medical bills or medical liens, your attorney will pay these off using your settlement award. Settling bills is normally straightforward, but if the state puts liens against your settlement, it can take months to resolve.

Your lawyer can only deduct legal fees from your settlement after these bills and liens have been resolved. If you have any issues with the breakdown of your legal expenses, this will delay the release of your settlement check even further.

How Can You Speed Up the Delivery of a Settlement Check?

There are some things that you can do to shorten the timeline of your settlement check’s delivery. Streamline the settlement process by doing the following:

  • Talk to your attorney about your outstanding liens and bills for quick payment once your settlement check arrives.
  • Prepare a release form in advance. Once you and the other party agree on an amount for the settlement, all you’ll have to do is make minor changes to reflect that value on the prepared form. Then, it’ll be ready for quick signing and sending to your law firm.
  • Communicate regularly with your attorney, and don’t delay sending documents or signing required forms. This will help your lawyer ensure that settlements finalize as quickly as possible.

You may find that, despite doing all of these steps, you’re still waiting for a long time for your settlement. During this period, your living expenses and other bills may pile up, putting financial stress on you and your loved ones. One solution to this is pre-settlement funding.

What Is Pre-Settlement Funding?

Pre-settlement funding is a form of non-recourse finance. This is also known as a lawsuit loan, litigation funding, or a legal cash advance.

“Non-recourse” means that this is risk-free to your personal finances, as the only collateral for the loan is your settlement money. If your case is settled, your income, home, and other personal assets can’t be used to repay this advance. If you lose your case, you won’t have to repay your legal funding loan.

If you apply for legal funding with Tribeca Lawsuit Loans, you can get an advance worth around 10% to 30% of your personal injury settlement. The amount will depend on the circumstances around your case, such as who is liable for your injury, the scale of your damages, and the other party’s coverage.

Once we learn more about your claim, we’ll have a better estimate of how much we can offer you in legal funding. Contact us for a free consultation to find out how much you can receive as a lawsuit loan.

Get Pre-Settlement Funding Today With Tribeca Lawsuit Loans

Legal funding can help cover your medical bills, lost wages, and other expenses while you wait for your settlement. Apply for lawsuit funding with Tribeca Lawsuit Loans for free! Just call us at (866) 388-2288 or visit our Apply Now page to get started.

We’ve provided up to $45 million in lawsuit funding to our clients, easing their financial burdens. Let us give you the resources you need while waiting for a court decision or check clearance!

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