The case is settled. A number has been agreed. This final part explains what happens between that phone call and the money, and why the number you agreed to and the check you receive are different figures.
The release
The insurer sends a release: a contract in which you give up every claim arising from the crash in exchange for the settlement. Read it. Releases sometimes include terms that were not negotiated: confidentiality clauses, indemnity provisions making you responsible for liens the insurer failed to pay, or language releasing parties who were not part of the deal. We review every release line by line and strike what does not belong. Once it is signed, the settlement is final.
The check goes to the trust account
The settlement check is made payable to you and the firm and deposited into the firm’s client trust account, an account that is audited and that the firm cannot use for its own purposes. Funds must clear before anything is disbursed, usually a few business days.
Liens are paid
Anyone with a legal right to be repaid from the settlement is paid from it before you are.
Health insurance that paid crash-related bills usually has a contractual right of reimbursement. Indiana law requires the insurer to reduce its claim proportionally for attorney fees and costs, and we negotiate further reductions on top of that.
Medicare and Medicaid have statutory rights that cannot be ignored; Medicare’s must be resolved through a formal process that we start early so it does not delay the check.
Hospitals and providers who treated on a lien, or who have unpaid balances, are paid or negotiated down.
Every lien is audited. Providers bill for things unrelated to the crash, insurers include charges that were never paid, and errors in the client’s favor are common. Lien negotiation routinely puts thousands of dollars back into the client’s column, and it is work that does not show up in the headline number.
The disbursement statement
Before any money is distributed, you receive an itemized statement showing the gross settlement, the attorney fee calculated under your agreement, every case expense listed individually, every lien with the original amount and the negotiated amount, and the balance to you. You review it, ask questions, and sign it. Nothing moves until you do. If a number on it surprises you, that is the moment to say so.
Taxes
Under federal law, compensation for physical injuries, including the medical expenses and pain-and-suffering components, is generally not taxable income. Lost wages recovered as part of a physical injury settlement are generally treated the same way. Interest on a judgment and punitive damages are taxable. For a settlement with unusual components, talk to a tax professional; we will tell you if yours is one.
Future medical care
If part of the settlement is for future treatment, that money is yours to manage. If Medicare is or may become your insurer, there may be an obligation to set aside funds for crash-related care; we address that before the release is signed, not after.
The check
Once the statement is signed and the liens are paid, the balance is yours, by check or wire. From the signed release to funds in hand is typically two to six weeks, longer when Medicare is involved.
What the number means
A $100,000 settlement is not a $100,000 check. After the attorney fee, the case expenses, and the liens, the net to the client is what the case was always really about, and it is the number we focus on from the first day: identifying every source of coverage, treating in a way that builds the claim without inflating bills, and fighting every lien at the end. That is the whole series. If you have just been in a crash, start with Part 1, and call us. The consultation is free.
This article is general information about Indiana law, not legal advice about your situation. Laws change and every case is different. Talk to a lawyer about the facts of your case.