If you have been involved in a lawsuit that is nearing resolution, you may begin to focus on the settlement check. If the proceedings have gone on for months or even years, you are likely anxious to see those proceeds right away to pay medical bills and other living expenses due to lost wages. Unfortunately, you won’t see the check immediately because there are a few steps that must be followed first. Here’s some information to help you understand “How long can a lawyer hold your settlement check?”
What Can Cause Your Settlement Check to Be Delayed?
Even after being awarded a settlement, it can take some time for you to actually receive the money. There can be several reasons for the issue with settlement funds, and it can take months before you have funds to deposit with unexpected delays even after the case settles.
Issues with the Release Form
Once you are awarded a settlement, you will need to sign a release form for the defendant or insurance company, which states that you won’t continue to pursue further legal action for the matter against the same defendant. If you have multiple lawsuits against the same party, the form won’t stop the current claims, only future ones. While getting the form signed shouldn’t be an issue, it can be delayed if either party disagrees with the terms. A revised form may need to be presented to get everyone to sign. You may have multiple release forms to sign if more than one party is involved.
Each state has its own rules regarding how long the defendant or insurance company has to process the settlement payment after being awarded. The settlement check process can take several weeks. Many times, the insurance company will use the full time allowed by law to delay the presentation of the funds. Expect that it will take the maximum time, and don’t anticipate having the funds before that deadline.
Clearing the Check
Most of the time, the check is sent to your attorney instead of directly to you. They will deposit the check into a special trust account or an escrow account until it clears the bank. This can take a week or longer before the check is cleared and available to go into your bank account.
After the check has cleared, the attorney will deduct out their portion for attorney fees and charges incurred for representing you as part of the settlement process. They will also need to pay any outstanding liens against the lawsuit and medical bills along with other related unpaid bills that have been presented. There is a certain order for the creditors to be paid, which the lawyer will observe in case the settlement amount wasn’t enough to cover everything. It can take some time for medical liens and other liens to be removed after the defendant pays and payment has been received. If it is a lien from a government agency, expect it to be months before the funds are clear.
Determining Payment Amounts
Another issue with payment is that your attorney may need to negotiate the amount with creditors. While most bills have a fixed amount such as outstanding medical bills, some may be less obvious, such as the costs involved with your lawsuit and legal services. This may include expert testimony, private investigators and others.
Can You Speed Up the Process of Getting a Settlement Payment?
Lawsuits take a great deal of time, and you usually can’t hurry through any part of them, including the payment of the settlement. However, you can have a release form ready for signing even before the case is closed and settlement has been awarded.
You can also work with your attorney to create a list of payments that must be made with the settlement money to creditors while waiting for the release form to be accepted or the check to clear. This step will help the lawyer move through the payment portion faster when the funds are available.
What If You Have a Structured Settlement?
A structured settlement often happens when there is a major injury, such as in a personal injury case or medical malpractice situation. Instead of one settlement payment, you would receive regular settlement checks over a period of time. This is most likely the case when your medical treatment is ongoing or your injury is permanent. Settlement checks can be scheduled for months or years.
Can You Get Cash Now From Your Settlement?
It’s possible to get cash more immediately based on your settlement amount before the funds are available to be released to you. You generally have two options to help you out until you receive the funds from your settlement agreement.
Advance from Your Attorney
Your attorney may choose to provide a cash advance on your settlement if you explain that you need the money quickly. However, they aren’t obligated to do so and your lawyer may choose to hold your settlement check until it is ready to be paid out to you. The attorney may be more likely to agree to an advance if you are receiving a large settlement over the amount of bills and expenses you’ve incurred and if you’ve had a good attorney-client relationship.
Funding Based on Your Lawsuit Settlement
Another option is to apply for litigation funding from a company that specializes in these fundings. This type of litigation funding is more likely to be offered as a lawsuit loan, and if so, is a cash advance made based on a resolved lawsuit and final settlement. These types of fundings are different from pre-settlement fundings, which, as described later, are nonrecourse transactions typically offered through a purchase agreement. These funds can help you get by until your settlement check is released.
How Does a Post Settlement Lawsuit Loan Work?
Post-settlement lawsuit loans, also called post-settlement cash advances, are different from traditional litigation fundings or traditional loans for a couple of reasons. As compared to a loan, the person applying for the loan doesn’t need to have good credit or employment history. The lender doesn’t care about your income or ability to repay the loan. In this way, it makes it easier for someone to qualify to receive an advance on their settlement money. The settlement amount is the determining factor for approval. The lender will discuss the case with your personal injury attorney to find out enough details to determine risk.
Another way that the lawsuit loan is different from traditional loans is you don’t have to make monthly payments to repay it. The lender will wait until the lawsuit is settled and payment has been made. They will be one of the bills that your personal injury lawyer will pay before releasing the rest of the funds to you.
A post-settlement lawsuit loan also is likely to differ from traditional litigation funding because the lender will likely not assume the risk of non-payment and will require repayment of the loan should you not receive your settlement check. Of course, this would be extremely unlikely after a settlement is agreed to a finalized before the court, but it is important to understand that the lender will be expecting repayment of the post-settlement loan.
The Risk with Litigation Fundings
With a litigation funding, the funder assumes all the risk. If the lawsuit doesn’t get awarded, they don’t get paid. If the final award is less than expected, it can mean the funder only gets back part of their funding. All risk is on the funder. For this reason, it can be difficult to get approved for a litigation funding.
If you’re wondering “how long does a settlement check take to clear” and how long you will have to wait to get the money, you may want to consider a post-settlement loan. While there’s no guarantee that you will be approved, you may get the money you need if you are waiting for the disbursement of the settlement award.
You may also be concerned about how much risk you have when you try to find pre-settlement funding. While numerous funders exist for this type of financial product, not all are reputable. You will want to do your research to find a funding company who will protect you while also benefiting from the funding. You should share any contract offer you receive with your personal injury attorney who can make sure you don’t become obligated or assume more risk than expected.
Oasis Financial is a leader in the pre-settlement and post-settlement funding industry, striving to maintain excellence and transparency in all transactions. If you are in need of settlement money before it can be released to you, consider how we can help you with medical expenses and other financial obligations until you receive your settlement check. Act quickly and fill out the application to find out if you are approved for a funding on your settlement.
Oasis provides pre-settlement funding, also known as consumer litigation funding, to its customers through different products depending on their state of residence or cause of action. Many consumers will be provided pre-settlement funding in the form of a purchase agreement, which assigns a portion of the pending proceeds from their legal claim. Other consumers, such as those in CO, IL, MO, SC, WI and some OK residents, will be offered a funding in the form of a pre-settlement loan, sometimes referred to as a lawsuit loan. These transactions have important differences, therefore, consumers should carefully review and be aware of the type of transaction that is offered to them by any funding company.