How Long Does It Take for Settlement Checks to Clear After a Case?

The type of settlement that you choose is one of the factors that determines the answer to “How long does it take for settlement checks to clear from a case?" If you opt for one lump sum payment, your settlement check should clear faster than if you choose to go with structured payments.

The reason why a lump sum arrangement gets you paid quicker is that every lien, as well as court costs and legal fees, comes out of one substantial check. If you decide on a structured settlement, which is a series of payments over several months, then you do not start receiving money until your lawyer takes care of every outstanding expense.

A lump-sum settlement also is preferable because you do not have to worry about inflation eroding the value of future payments. However, if you want to set up a structured settlement, you can budget for monthly expenses.

You also have the option to combine both types of settlements, which means you receive a large lump-sum settlement check for a percentage of what the other party owes you, and then start receiving monthly checks for the balance of the settlement amount.

You have two ways to receive just compensation from a civil lawsuit: settlement or legal judgment. The lawyers at Morgan & Morgan try to reach a settlement with the other party before taking legal action in the form of filing a civil lawsuit. The check settlement process remains the same for both a settlement and a favorable legal judgment.

Negotiating a legal settlement can happen at any time during the litigation process. However, reaching a settlement happens most often during the discovery phase of a civil trial.

Your Attorney Calculates a Value for Just Compensation

One of the reasons why your lawyer might recommend going to trial is that during the trial phase of the litigation process, the judge hearing your case has the legal power to award punitive damages. This is not the case when you reach a settlement, since you receive just two types of compensation: special compensatory damages and general compensatory damages. Calculating the value for special compensatory damages is easy, as this type of financial award covers the costs associated with your case, such as medical bills and property damage.

General compensatory damages refer to non-tangible costs that include pain and suffering, as well as loss of consortium. Your legal counsel calculates the value of general compensatory damages by referring to a formula that is based on the value of special compensatory damages. The key is for your attorney to propose a reasonable value for monetary damages. Otherwise, you can expect the legal counsel for the other party to reject your initial offer.

Send a Demand Letter

Sending a demand letter represents the formal start of the litigation process. The demand letter should include the value calculated for monetary damages, as well as a detailed description of how you came up with the value for monetary damages. You also should include a comprehensive account of what caused you to take legal action against the recipient of the demand letter. The legal counsel for the other party must respond to the demand letter by a certain date, depending on state law.

Try to Negotiate a Settlement

After receiving a response to your demand letter, you either try to negotiate a settlement or take your case to trial. If your lawyer recommends negotiations, both parties meet to submit counteroffers until you reach a settlement or both parties hit a roadblock that ends negotiations. The reason why a majority of legal settlements take place during the discovery phase is because both parties exchange evidence and witness statements. Exchanging information helps the attorneys representing both parties determine whether going to trial is a good idea.

After you reach a settlement, you might think that you should walk out of the negotiations with a check in hand. However, you have to follow several steps to receive the compensation you deserve.

Sign a Release Form

A release form explains that you can never take legal action against the other party for the same civil offense. Your legal counsel reviews a release form to ensure you receive the legal protections granted to you by state and federal laws. Between 30 and 60 days after reaching a settlement, you must submit the Order of Statement, which confirms you understand the terms and conditions written into the legal settlement.

Your Attorney Receives Settlement Check

Regardless of whether you receive a settlement check from an insurer or the other party, your legal counsel receives the check to cover liens, as well as pay court costs and legal fees. If your attorney represented you on a contingency fee basis, a percentage of the settlement check will go towards paying your lawyer. The process for handling the financial responsibilities associated with a legal settlement check can take anywhere from one week to six weeks. After accounting for fees and liens, you should receive the balance of the value of your settlement check.

Determining how long it takes for settlement checks to clear from a case is partially on you. Creating a direct deposit account can shave several days off the amount of time you have to wait for your settlement check. Receiving a settlement check by snail mail increases the risk of something going wrong to delay the process. You also can sign certain documents before you reach a settlement to reduce the amount of paperwork you have to file to receive your money. Your attorney suggests you do this only if it appears both parties are on track to reach a settlement.
 

Several reasons can delay the delivery of your settlement check. The most common reason is bank holidays when transactions come to a halt. Settlement checks also do not get processed on weekends. You might submit your own release form, which prevents the other party from taking legal action against you after reaching a settlement. Some cases require more preparation, especially if there are several liens placed on the value of the settlement check. Paying a clinic, hospital, auto repair shop, and the attorney representing you can take a considerable amount of time. All parties that receive money from a settlement check must submit documents that verify they have received compensation. You do not receive a settlement check until you take care of every lien placed on your settlement check.

Another possible delay concerns the settlement check you receive from an insurance company. Dealing with an insurer can be frustrating because many insurance companies take their time approving payouts. An insurance company might claim a backlog of claims has held up your claim or the company is still waiting on important information to make an accurate appraisal of the value of your claim. The most effective strategy to motivate an insurance company to move faster involves your legal counsel reaching out to apply a little pressure.

Several factors come into play that determine the value of a legal settlement. The number of parties involved in the case matters, as more than one party typically means a higher payout. For example, let’s assume you were involved in a car accident with one other vehicle. The other party might be guilty of violating a traffic law that caused the crash and the city might be guilty of failing to maintain safe road conditions.

Legal fees also contribute to the value of a settlement. Most attorneys work on a contingency fee basis that runs between 25 and 40 percent, depending on the type of law applied to the case. You want to work with a law firm such as Morgan & Morgan that takes into account the value of legal fees when determining how much to propose for a settlement. If your economic and non-economic damages are valued at $40,000 and your lawyer charges a 25 percent legal fee, then you want your legal counsel to add $10,000 to the $40,000 value of your economic and non-economic damages.

If your case involves one or more injuries, you have to consider the severity of your injuries, as well as how long it takes for you to get back to work.

After reaching a settlement, you understandably want to receive payment quickly to take care of daily living expenses. Make that happen by hiring one of the highly-rated attorneys at Morgan & Morgan. We offer a free case evaluation that helps you answer the question, “How long does it take for settlement checks to clear from a case?”