Agreeing to a settlement marks the culmination of your claim and reparations for the damages you sustained. According to On the Map Marketing, 67% of all money from personal injury cases came from settlements. However, you won’t receive your settlement check on the same day you agree to a settlement.
Many plaintiffs are frustrated at how long the process takes, but there are defined steps your attorney has to go through before they can send you your check. Understanding what the settlement process looks like lets you prepare for what’s to come so there are no nasty surprises later.
In today’s guide, we’re going to discuss why your lawyer is holding your check, what happens next, and how long they’ll hold it before sending it out to you.
Key Takeaways
A settlement is a legal agreement to dismiss pending legal action and waive your rights to future legal action over the same incident.
Your timeline for receiving a settlement check involves negotiations, waiting for the defendant to pay into an escrow account, and disbursing funds to cover liens, pre-settlement funding, and attorney fees before receiving what’s left.
Factors that could delay your settlement check include the complexity of your case, differences in regulations between jurisdictions, and poor communication.
There’s little you can do to expedite your settlement check beyond the four-to-six-week estimated time frame because the necessary legal checks and paperwork must be adhered to.
No time limit exists on how long a settlement can take, and issues like court approval, banking delays, and bad faith can extend the timeline even further.
Hiring a great lawyer is the best way to ensure you receive your settlement as soon as possible. When choosing a lawyer, prioritize their experience, track record, reputation in the community, and how they engage with you.
What is a Settlement?
A settlement is an agreement to dismiss any pending legal action against the defendant in exchange for a financial package. According to Britannica, it’s a compromise or agreement to conclude their litigation without entering a judgment. Once completed, the personal injury lawsuit is withdrawn or dismissed, with no judgment being entered.
Most car accident claims are managed in this way, consulting a Chicago car accident lawyer can help ensure a fair settlement. According to the U.S. Bureau of Justice Statistics, only 3% of cases were resolved through a trial verdict. That means most claimants will never see the inside of a courtroom.
Due to the nature of a settlement, you can’t pursue the defendant for more compensation later, hence why you should take advice on whether to accept a settlement offer first.
What is the Timeline to Get Your Settlement Check?
In personal injury law, the settlement process follows multiple steps, but knowing what to do after a car accident in Chicago can help streamline the journey from negotiation to disbursement. Regardless of the case, the steps include settlement negotiation, payment, escrow transfer, and disbursement of funds. There’s no defined time limit for this process to resolve itself.
Here’s what the process timeline looks like in car accident claims:
Negotiation – Both parties will negotiate a settlement and finalize the terms. It’s the longest part of the process and can take anywhere from a few weeks to months. It really depends on how complex your personal injury case is.
Settlement Payment – The defendant, usually the auto insurance firm, must pay the agreed settlement within a strict timeframe. This is usually 30 days. Don’t be surprised if they use the full 30-day limit.
Escrow Transfer – Once the check has been received from the defendant, your lawyer will deposit it into a special escrow account. Depending on the size of the check, it’ll usually take a few days to clear. If they receive the check on a Friday, it could take a few days longer due to the weekend.
Distribution—The next step is to distribute funds. Your lawyer will pay off any liens and other obligations and take their contingency fee. Once everyone has received their money, anything left will be sent to you. Again, this could take a few business days.
Naturally, this assumes that everything goes well and that there are no snags that could slow you down. However, some plaintiffs experience issues and may have to wait a few extra days or weeks to receive their funds.
What is Escrow, and How Does it Affect Your Settlement Check?
Escrow is a legal agreement in which a neutral party, such as a bank, holds funds as a third party. This concept is used not only in law but also in real estate, online eCommerce, and finance. Escrows are necessary for disbursing funds fairly and legally, which impacts how quickly you receive your settlement check.
According to Forbes, the average car accident settlement in 2020 ranged from $20,000 to $25,000. These are substantial sums and often take longer to clear through the escrow system, which is why your payment might be delayed in the first place. Furthermore, the duties your lawyer has in distribution means most law firms expect the whole process to take a few weeks.
Some of the main reasons your funds might be held in escrow for longer than you expected include:
Paying Medical Providers – Since medical expenses are often a plaintiff’s most considerable expense, there may be liens on your settlement check. These must be paid by your attorney.
Outstanding Liens – Other liens may also have been placed on your funds. It’s up to your attorney to identify these liens and pay them. Some bodies that may have liens include government agencies and creditors.
Finalizing Paperwork – Before your personal injury lawyer can release your check, they’ve got to double and triple check the payout and ensure all legal fees are covered, such as contingency fees and case-specific expenses.
Escrow accounts aren’t simply neutral accounts into which your settlement is paid. It’s an essential part of the legal process, ensuring that everything goes smoothly and you don’t run into problems later.
How to Expedite Your Settlement Check Process
Signing a completed release means you can expect to wait about six weeks to receive your check. There’s little plaintiffs can do to expedite the process because all legal bases must be covered. On the other hand, there are options for preventing unnecessary delays by maintaining open communication channels and being proactive.
Some of the ways you can expedite your settlement check include:
Open Communication – Talk to your car accident lawyer about the expected timeframe for sending out your funds. Address any changes, and don’t be afraid to voice your concerns. It’s your lawyer’s job to keep you informed.
Organize Your Paperwork – Be prepared to provide relevant documents, including outstanding medical bills, to accelerate the distribution process. A lost document could delay your settlement check by several days or longer.
Be Proactive – Address any outstanding liens and other legal claims to avoid delays in resolving them.
Above all, you’ve got to be patient. The financial strain of not getting paid can take its toll, but you’ll receive your check as soon as your attorney can. After all, your attorney is as eager to resolve any liens and complete the paperwork as you are!
Why are My Settlement Funds on Hold?
Your settlement funds could be on hold for any number of reasons. More complex cases, differences in jurisdictions, and how parties communicate are some of the reasons why your settlement check could be held in escrow by your lawyer.
Let’s discuss the three reasons your settlement funds could be stuck in the pipeline.
Personal Injury Case Complexity
Some personal injury cases are extraordinarily complex, involving multiple parties and disputes over settlement terms. Even if you believe you’ve agreed to a settlement, negotiations don’t end until you formally sign the settlement agreement.
After signing the agreement, the complexity of your case could still come into play. For example, if your lien resolutions are especially complex, it can take more time and resources to put everything in order.
Communication Efficiency
Resolving anything in the legal trade relies on crisp communication. Your personal injury lawyer will communicate with all parties throughout the personal injury settlement process, including the insurance company, other lawyers, and any other parties.
Delays in responding to requests or providing needed documentation can slow down the timeline. In some cases, it’s even a legal tactic to get plaintiffs to settle for less than their case is worth.
Jurisdictional Differences
Working across state lines can cause its own problems. If you were injured in one state but live in another, you may experience delays in your settlement check. Every state has its own laws regarding the disbursement of funds that could impact the timeline. For instance, understanding if Illinois is a no-fault state can clarify how local regulations influence settlement processes. Furthermore, each jurisdiction may have different rules on how long a lawyer can hold a settlement check.
How Long to Get a Settlement Check After Signing a Release?
Signing a release ends the lawsuit and releases the defendant from all further claims. It also outlines the terms and conditions of the settlement agreement. Most plaintiffs receive their settlement checks within a month of signing this agreement.
According to the Illinois State Bar Association, defendants must pay all sums outlined in the settlement agreement within 30 days. However, this doesn’t mean your attorney will release your check to you in this timeframe. It’s a common area of confusion and one reason plaintiffs get worried when their check takes longer to arrive.
Once you’ve signed your release, it could take anywhere from four to six weeks for your check to arrive in your account.
What is the Longest a Settlement Can Take?
No time limit exists on how long a settlement can take to negotiate, resolve, and pay. Some cases last for years before a settlement is agreed upon and paid. However, time limits do apply to some aspects of the legal process, such as the statute of limitations on filing a claim.
According to Nolo, the average time for personal injury lawsuits to move from filing to settlement is 11.4 months. It’s only a ballpark figure and doesn’t factor in that some cases may last for many years before a resolution is found.
In Illinois, you have two years from the day your accident happened to file a lawsuit under the state’s current statute of limitations. If you fail to file your case within this time frame, you lose your right to pursue monetary compensation entirely.
Once your case is filed, there’s no time limit for how long it could last. Speak to your attorney for an estimate of how long your case could take to resolve.
What Factors Could Potentially Delay My Settlement Check?
Receiving your settlement money can be delayed due to negotiations, waiting for court approval, banking delays, paying outstanding liens, or, in rare cases, bad faith on behalf of the other party.
Even a short wait can be frustrating if you’re waiting for a settlement check to start paying off your debts, but your lawyer is doing their best to speed up the process. Let’s look at some reasons your settlement check could be delayed.
Settlement Negotiations
Agreeing to a settlement can still bring delays. It takes time to finalize everything in writing, and there may be further legal wrangles over the exact wording of the agreement.
For example, your lawyer may still need to negotiate the scope of the agreement. Likewise, they might need to discuss the extent of confidentiality regarding the settlement amount. Ultimately, protecting your legal interests must come before expediting your check.
Court Approval
Certain types of settlements require court approval before they can be disbursed. For example, settlements involving minors usually need to be reviewed by the court to ensure the final settlement best serves the child’s interests.
Other examples of where court approval might be required are class action lawsuits or when a party is a debtor in a bankruptcy proceeding. Regardless of the reason, the court approval process can delay your settlement by a few weeks.
Bank Delays
Banks can also cause problems with settlement checks. Larger amounts take longer to move from one financial institution to another because of the procedures and checks banks must administer by law.
One way around this is to use the wire transfer process, but clearance and fund settlement procedures still come into effect. Sadly, there’s nothing anyone can do about this.
Paying Outstanding Liens
All liens must be resolved before your settlement funds can be disbursed to you. A lien is a legal claim on your final settlement and is usually used to pay your bills incurred throughout the legal process.
Medical Liens
Medical liens are the most common and include bills paid to your doctor, hospital fees, prescription medications, physiotherapy, and more. Hospitals and medical facilities typically place liens on settlements with the expectation they’ll be paid once the legal process has resolved itself.
Legal Fees
Your attorney is entitled to be paid for all their hard work. Most personal injury attorneys work on a contingency basis, meaning they only get paid if they win. If you’ve obtained a settlement, your attorney will take their pre-agreed fee from your settlements. Additional case-related expenses may also be a part of this.
Subrogation Claims by Your Health Insurance Company
Subrogation is when your medical insurance provider seeks reimbursement for any payments they made on your behalf. It’s a process that occurs when you are injured by someone else and you’ve collected money from the other party.
If a subrogation claim is approved, the amount will come from your settlement.
Lien Disputes
Disputes may also arise from the liens themselves. Arguments over how much is owed and who’s filed a valid lien can stop you from receiving your money on time.
Examples of lien disputes include:
Your credit didn’t rescind their lien when you already paid your debts.
You disagree with the total amount owed.
You disagree over whether your settlement funds are exempt.
If there are any lien disputes, your lawyer will step in to resolve the dispute. Unfortunately, they can’t disburse the funds to you in the meantime.
Bad Faith
In rare cases, you may encounter an issue of bad faith. Bad faith actions or breaching the settlement agreement are grounds for additional legal action. For example, an insurer may not disburse your settlement funds within the legal 30-day limit.
If an act of bad faith is proven, you might be able to claim additional damages from the other party.
How Much Will My Attorney Keep of My Settlement Money?
Your attorney’s fees depend on what you agreed to when you hired them as your lawyer. According to Mighty, the nationwide average contingency fee is 33.3%. Lawyers may be entitled to charge more for their services, but only up to the prescribed state maximum.
Illinois is one state that doesn’t have a prescribed maximum contingency fee, meaning attorneys are entitled to charge anything they like. The only two exceptions to the rule are in medical malpractice and criminal cases.
However, most lawyers still charge around the nationwide average to stay competitive in a highly competitive legal landscape.
What’s the Most a Lawyer Can Take from a Settlement?
Lawyers may take one-third of a final settlement, but there's no limit in terms of what they can take before dispensing your check. Attorneys can only pay you whatever is left over after covering all your financial obligations, including liens and attorney fees.
Some cases don’t pan out as expected, and plaintiffs may receive a settlement that doesn’t cover all their losses. This scenario tends to happen when people don’t hire a lawyer and instead opt to fight their own cases, thus accepting a lowball settlement.
What to Look for in a Personal Injury Lawyer
Great personal injury lawyers go the extra mile to expedite the process from their end to avoid unnecessary delays in sending out your settlement check. It’s not about the contingency fee they charge but what value they bring to the table.
Remember, Nolo reveals that the average settlement for a plaintiff with a lawyer is $76,000, compared to the $17,000 received by plaintiffs who don’t hire a lawyer. It’s an example of the value that having a lawyer brings.
Examples of what to look for when hiring a lawyer include:
Experience – Evaluate their experience. How long have they been in the business? What are some notable cases they’ve been involved in? Have they won any awards within the legal community?
Success – Ensure your lawyer has a strong track record of winning cases. Examine settlement award sizes and what their win rates are.
Engagement – Take the free consultation offered by a law firm to get to know your potential lawyer. Think about how they engage with you. Do they seem interested in what you have to say? Are they open and honest communicators?
Payment Model – Learn more about their payment model and ensure it works for you. Offering a free consultation is a green flag to look for in the beginning. Fully understand their model before agreeing to work with them.
Additional Resources – Look for any extra resources your lawyer might have. For example, they may have a network of medical professionals working on a lien basis, legal funding, or provide additional services, such as property damage valuation.
Above all, listen to what the community has to say. See what their former clients have to say about the experience of working with them. Don’t rush into the process and choose any old Chicago personal injury lawyer, or your case could be seriously damaged in the long run.
Settlement Check FAQs
How long can a lawyer hold your settlement check?
No time limit exists on how long your lawyer can hold your settlement check. Most plaintiffs receive their money around a month after the final settlement agreement has been finalized and signed.
What happens after you sign a settlement agreement?
Signing a settlement agreement means waiving your rights to any further legal action against the defendant over the incident in question. It means you can’t claim additional damages later, even if you feel like your original settlement was insufficient.
What to do if the settlement process is delayed unreasonably?
If your settlement check seems to be sitting and you haven’t received a satisfactory explanation, it may be time to seek legal action. Talk to your attorney and ask for a detailed explanation about what’s taking so long. If it seems excessive, you might need to seek extra legal advice from another Chicago personal injury lawyer or file a complaint.
