So you’ve gone through the entire claim process: the paperwork, the negotiations, the back and forth with the insurance company until FINALLY a settlement amount has been reached. Now what’s the next step before you can take home your check?
You must first dole out payments to the appropriate parties that have been involved with pursuing your personal injury case. There are three different areas where your money is distributed before you can take home the rest to cover items such as wage loss and pain and suffering. These include:
- Liens and Medical Expenses
- Attorney’s Fees
- Legal Costs
Learn more about these three areas below. We want to help you have a clear understanding of the process of distribution so that you can be satisfied with the results. Contact us if you have any questions.
Does My Personal Injury Settlement Include Medical Bills?
The federal government and most states require you to pay hospitals, physicians, and government agencies from personal injury settlements. This concept is referred to as the right of subrogation, which means parties—such as your insurance company— have the right to recover what they paid on your behalf from the settlement amount that you collect from the negligent party.
Therefore, your attorney is legally obligated to deduct and pay all medical liens before you receive your settlement. These liens can come from medical providers you still owe and from insurance companies who paid your injury-related medical bills. This can also take the form of Medicare or Medicaid lien.
In some cases, you may be able to negotiate with your medical providers to reduce the bills so that you can keep more of your settlement; however, bear in mind that this can be a lengthy process and the provider may not budge.
What are Legal Costs?
Legal costs are the tangible expenses that are sometimes paid for by your attorney in order to prepare for and prosecute your case effectively. These costs can be high or low, depending on the complexity of your case and if a lengthy lawsuit is filed.
Altogether, they are different from the attorney fees and can include items that are meant to move your case forward, such as:
- Copy charges
- Court document filing fees
- Hiring expert testimonial
- Deposition expenses
- Traveling expenses
- Cost for medical records
- Postage for pre-suit cases
How Much Goes Toward Attorney Fees?
The attorney fees can vary but payment typically comes from the contingency fee contract, which is usually established at the beginning and will govern the relationship. These fees include compensation for the attorney’s legal expertise, members of their staff, and the front money for other cases.
If a claim is settled out of court, you can expect to pay between 30-40 percent of that to the attorney. If a lawsuit has to be filed, however, the fee can be 40 percent or higher, but usually pursuing a lawsuit may mean you are seeking a larger settlement so it could make up for this higher fee.
What Do I Take Home?
After medical liens, legal fees and costs, and anyone else that might have a legitimate claim has been paid, you are able to keep the remainder for non-economic damages (pain and suffering) and lost income. In many cases, you may also receive damages for lost relationships with a significant other.
While it may seem like these three areas can take a significant chunk out of your settlement, they are all necessary and important. Hiring a lawyer to pursue a claim may get you a larger settlement, but beyond just the money, you may also view it as a way of righting wrongs. A personal injury claim may protect others from lawbreakers and help prevent them from getting hurt as well.
Contact The Hayden Law Firm
At the Hayden Law Firm, we take cases on a contingency fee basis, This means that you do not pay legal fees or other fees up-front and that we only get paid if you do through your personal injury settlement. We will not take a case unless we believe that even after all appropriate parties have been paid from the settlement, you—our client— will still earn a significant amount to which you are owed.