After a successful settlement, many plaintiffs expect to walk away from the table with cash in hand. However, especially for larger settlements, the actual payment process can take some time.
Depending on the circumstances of your case, there are three common ways to receive a settlement payment:
- Structured settlement: A structured settlement is a method for delivering large settlement funds to the plaintiff (or plaintiffs) over a period of time. This type of settlement ensures that the plaintiff will receive a steady flow of income over the next several years or even regular payments for life. Structured settlements are beneficial because they can reduce tax liability for large lump-sum payments, and they can also ensure financial stability for the plaintiff for the future (which is especially important if the plaintiff is unable to work because of the accident). You and your attorney can negotiate almost every aspect of the structured settlement, including the length of the payment plan, how often you want to receive payments, how much money should be included in each payment, whether you want a lump sum payment at the end, and if you want your structured payments to go to your heirs if you die before the end of the structured settlement. Typically, structured settlements are better for larger settlements, i.e. in excess of $150,000.
- Lump sum payment: On the other hand, certain settlements are paid as one lump sum amount. A lump sum payment has its advantages, as it ensures the entire settlement is paid to the injured party and it also gives the plaintiff a solid financial foundation. Some settlements combine a lump sum payment with a structured settlement so that plaintiffs can benefit from the immediate income, as well as have financial support for the coming years. Lump sum payments are generally better for smaller or medium-sized settlements, i.e. under $150,000.
- Class action settlements: If you are part of a class action suit, such as a defective product claim, your settlement might be paid from a general fund; a claims administrator will typically decide how much each plaintiff will receive. This process varies widely from case to case. In certain class action settlements, receiving your settlement payment could be as easy as filling out your contact information in an online form. In other settlements, you could have to provide evidence of your injuries to receive the payment you are due.
After a successful settlement, your first question is probably “When will i get my check?” Essentially, the timeline involved depends on the complexity of your claim. After the claim is settled, the defendant must get a check from his or her insurer by a certain date. Your attorney might also need to take care of medical liens or insurance liens before the final amount is given to you, which can take some time when it involves Medicare, Medicaid, or difficult insurance agencies. Talking to an experienced personal injury attorney is the best way to determine how long the settlement process will take and how you should expect payment.