Personal Injury Settlements
Halt | December 21, 2021 | 0 Comments

Here’s How Personal Injury Settlements Are Paid Out

Once we make a personal injury settlement, it is difficult to wait for the compensation to get paid out. If your payment is getting delayed, don’t get worried. You will receive your payment; it might just take more time.

The entire process from coming to a settlement to the moment you receive it is quite long. Even after the liable party has paid the settlement compensation, you may not receive your payment for weeks.

This is because it goes through a channel of all third parties involved before it can come to you. Before the process of how it is paid out can be explained, we must first understand the terms of your personal injury settlements.

Personal Injury Settlement Terms

Personal Injury Settlements

Before we can get to the settlement breakdown, we must deal with the terms of the settlement. The way your injury settlement payouts are handled depends on the terms decided on by your lawyer and the liable party.


The liable party can use two types of payout systems to pay you. First is the lump sum, which is one single payment that pays the entire due sum.

As lucrative as this sounds, a lump sum can be problematic when the person receiving the money is bad at managing finances. The entire sum is used up before it can be used wisely. This is where having a structured payout comes in handy.

Structured Settlement

When the payment is made through a structured payout, your broker can structure your fundings in a way that will ensure your financial security for years.

This is when the settlement payout is paid in installments, not all at once but over time. You start receiving regular disbursement either immediately or in the future.

Your structured settlement broker will work with you to arrange the best structure for these payments. For example, if you need a higher sum of money during the first few months but can work with a smaller disbursement after a while, your broker can structure your payment like that.

What Happens After The Settlement Has Been Reached?

The payout is often made not by the liable party but by their insurers. The insurance company comes to a settlement with your lawyer, and then the payout is made.

However, you will not receive the entire sum as the fees and costs related to the personal injury settlement are paid first. You must understand the settlement breakdown before you agree with your lawyer.

Make sure you learn about every possible fee and payment that will be taken out of the settlement sum before you hire the lawyer for your injury case. Here are a few payments that will need to be made before receiving your payout.

Medical Fees & Other Liens

Injury Settlement Case

If all your personal injury medical bills were not paid before, the payment would be made from your payout. If the outstanding medical bill is very high, you might be left with a negligible proportion of the main sum.

If you have been left with a disability or a poor state of health that will keep you out of work for a while, you will need more money to ensure future financial security. So, you can try talking to the doctors who might be willing to help you reduce the medical bills.

Be careful as some states give medical providers the right to file a “lien” against any patient with unpaid medical bills. If a lien has been filed against you, the outstanding payment will be made from the settlement payout.

There might also be other outstanding payments like mechanics liens, funding liens, etc., which will also be taken out of the principal settlement sum.

Legal Fees

You must hire a competent personal injury lawyer to ensure that you get the best results from your personal injury lawsuit. Here are a few things you must know about personal settlement lawyers and fees:

  • If you don’t have the money to hire a personal injury lawyer, you can try hiring one via a contingent fee contract. The word contingent means free, which means you pay little or no fees before the case is solved. If they can’t win the case or fail to settle, you won’t have to pay them anything.
  • Your lawyer would be paid based on the contract. Make sure that the lawyer is open and clear about all their fees. The lawyer’s fees are around 25-50% of the total settlement, so make sure you know how much you need to pay them at the end of the claim.
  • Understand that your lawyer’s fees are negotiable, so whatever they claim is the “industry standards”, remember that there are no such standards. You can try negotiating the terms according to your situation and come to an agreement that works for both parties.
  • There are other legal fees involved when a case is filed. Hence, those fees will also be settled by the lawyer after the settlement payment has been received. Your lawyer will also ensure that all the medical bills and liens are paid.


What Types Of Cases Are Covered By Personal Injury Laws

Whether your settlement payout gets taxed depends on the situation. The government does not tax personal injury settlements unless it has a conditional factor, like the case being a punitive damages claim. If the defendant was guilty of trying to harm the plaintiff, the settlement would be taxed.


After all the fees, taxes, and other necessary payments are paid, you will receive your settlement payout. You must figure out all your settlement breakdown before you agree to hire your lawyer.

The agreement you will reach with your lawyer will affect the amount you receive from the settlement, so be careful and negotiate with them before deciding to file the lawsuit.

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