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Your Case Has Settled. What Now? How Are Settlement Proceeds Distributed?

You settle your case. What happens next?

It seems like I’ve been asked this question several times in the last week. Because it’s popping up, I thought I’d use this space to answer the question.

Because we have to make payments out of the check (for example, our fees & expenses, payments to health insurance companies for subrogation interests, or perhaps payments to doctors or hospitals for unpaid bills), you don’t get your check the day the settlement check comes in. Instead, we have to go through a multi-step process.

The first step in the process is getting the check from the insurance company or the defendant. This usually takes two to three weeks, though sometimes it is quicker and sometimes slower.

The check is usually made out in one of two ways. In most situations, the insurance company will make the settlement check out to you and to our firm. In some instances, the insurance company will want to directly pay a health insurance company or a medical provider (usually a hospital). In those cases, we’ll received two checks: one to the hospital or health insurance company for the amount it’s owed and one to us and you for the balance. There are also some situations where the company will agree to not put your name on the check to help us speed the process up, but that’s unusual.

When we get the check, if your name is on it, we’ll have to get your signature. Usually, you’ll come into our office for this, but sometimes we can send a runner with the check out to meet you.

Once you sign the check and we sign the check, it is deposited in our trust account. The State Bar of Texas requires us to keep a separate trust account to deposit funds that belong to both us and our clients (or even others).

After we deposit the check, we give it a few days to clear, and then we can write checks for final distribution — that includes checks to you for your portion, checks to us for our portion, and checks to any third-party who need to be paid out of the proceeds.

So what’s it all mean to you? While the process can take a while to explain, it doesn’t usually take that long in practice. Once we get the original settlement check, you can usually have a check for your portion of the proceeds in two to three business days.

BUT, there are some circumstances where it takes longer. Most of those involve us waiting around for Medicare or some other governmental entity on a subrogation claim. If your case is going to be one of the unusual cases held up, we’ll try to let you know that as soon as possible.

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