Your settlement check
Settlement statement or check smaller than you expected? Call now for a free review.
Call about my check(833) 716-6705
Our team picks up 24/7, hears your case free, and links you to a car accident lawyer paid only if you win.
Liens and the lawyer's fee come out of your settlement check before you see the rest, and every line on the statement can be checked.
From signing to your settlement check
- You sign the release. That ends the claim for good.
- The insurer sends payment within the time the claim rules in your state allow.
- With a lawyer, the check goes into a trust account and has to clear.
- Liens are paid. Then you get your share.
What's taken out first
Anyone who paid your medical bills and has a right to be repaid is paid from the money. That can be a health plan, a hospital or Medicare. Medicare issues a demand letter with the amount owed, per CMS.
The lawyer's share, with an example
Here is a $22,400 settlement with a one-third fee, common when a case settles before a lawsuit is filed.
| Item | Amount |
|---|---|
| Settlement | $22,400 |
| Lawyer fee, one-third | −$7,467 |
| Case costs (records, postage) | −$300 |
| Health plan lien | −$3,200 |
| Check to you | $11,433 |
Of $22,400, the check to you is $11,433, about half.
So the deductions matter as much as the headline number, and liens can often be reduced.
Is it taxed
Money paid for a physical injury is left out of taxable income, under 26 U.S.C. 104(a)(2). The IRS says punitive damages do not get that break. Emotional distress money is tax-free only when it comes from the physical injury.
Settlement check questions
How long to get settlement check after signing?
It depends on your state's payment clock and on liens. Liens are paid before your check is cut.
Is a car accident settlement taxable?
Money for a physical injury is not taxable income. Punitive damages are. Any part labeled interest may be taxed too.
Why does the check go to my lawyer first?
The insurer usually makes the check out to you and your lawyer together. The lawyer deposits it in a trust account, takes the fee and costs, pays liens and sends you the rest.
What is a medical lien?
A claim by a hospital, health plan or Medicare to be paid back from your settlement. Medicare sends a demand letter for the amount it is owed.
What to do now
Call about my check(833) 716-6705
Our team picks up 24/7, hears your case free, and links you to a car accident lawyer paid only if you win.
Once you sign the release, the injury claim is settled for good, so check every fee, cost and lien before you sign. Hospital and health plan liens can often be lowered, and most states give you two or three years to file an injury lawsuit. Call for a free review before you put your name on it.