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How Long Does it Take to Receive Settlement Money?


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After you finally received word that your case had settled, your first thought was probably when you would receive your settlement check. While you can ask your attorney to give you an estimate of when you can expect your check, the answer to this question depends on a number of factors, such as the defendantís policy, the type of case that it is and whether there are any extraneous circumstances affecting payout.

Release Form

The first step in receiving your settlement check is to sign a release form that states that you will not pursue any further monies from the defendant for the specific incident in question. The defendant or the defendantís insurance company will not send a check for your damages without such a form. Otherwise, the defendant could be put in the precarious position of being the continued subject to a lawsuit. If certain portions of your claim will continue, the release form should be very specific as to which claims you are agreeing to release the defendant from. Your attorney submits this form to the insurance company or the defendant, along with any other papers that he or she agreed to send.

Internal Process

At this point, the release time depends largely on the defendantís internal process. Some states have specific deadlines in which a defendant must provide settlement funds after receiving the release form. Some state laws strengthen the leverage over the defendant by requiring him or her to start accumulating interest on the settlement funds from the date that the release form is received so that there is a disincentive for the defendant to delay payment.

However, there are usually loopholes that experienced defendants and insurance companies know about to avoid these negative ramifications, such as the statute not saying how long an insurance company has to process the actual release form. In essence, an insurance company may receive the form and then take its time to actually enter the information in the computer system, thereby delaying the actual time in which you would receive your settlement but not ticking down the clock to when it must release the funds.

Potential Delays

There are several instances when a delay may occur. For example, the defendant may have its own release form. Your attorney and the defendantís attorney may have to revise this form until it is acceptable to both parties. Certain cases may require more preparation, such as cases involving estates or minors. You may have a medical lien or other lien against the proceeds of your settlement. For example, a medical provider may have a lien against you if it has not received payment for the services you incurred during an accident.

If you owe child support, a lien may be issued against your settlement. Liens must be paid off before you receive your remaining portion of the settlement. In some instances, your attorney may try to negotiate to have the value of these liens reduced so that you will wind up with more money in your own pocket. However, this negotiation can take up additional time and slow down the receipt of your settlement funds. The internal process of the defendantís insurance company may also cause a delay, such as if the claim is processed in one state office and the check comes out of another stateís office.

Attorney Involvement

Usually, a settlement check is sent to the attorney of record. The attorney may hold the check in a trust or escrow account until it clears. This may take several days, especially if it is a large check. Your attorney will also deduct his or her own share from the settlement funds for the legal services that he or she provided and for the advancement of any legal costs.

Speeding up the Process

There may be several steps that you and your attorney can take to speed up the process. For example, your attorney may draft an acceptable release form once settlement is imminent. The release may indicate the amount of time that actual payment is expected. You can ensure that you submit all documents to your attorney that the defendant requires before cutting a check. Your attorney can also use expedited shipping and return receipt request mailings to avoid excuses that documents were not received by the defendant. If you anticipate that you will owe medical providers or other creditors' funds, you may ask your attorney if you can receive a partial distribution while your attorney holds the rest and settles your outstanding claims.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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