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How Are Personal Injury Settlements Paid Out?
If you’re unsure about how personal injury settlements are paid out, you’re not alone – it can be pretty confusing at first. But understanding the process can make things a little less daunting. Our New York personal injury lawyer breaks down the different ways settlements are paid out, so you’ll know what to expect here.
What Is a Lump-Sum Settlement?
A lump-sum settlement is the straightforward option where you receive the entire settlement in one payment; this is typically the preferred option if you need immediate funds to cover medical bills, living expenses, or other urgent obligations. You also have complete control over how to use the money, whether it’s paying off debt, investing, or saving for the future.
The downside? It's easy to spend the money too quickly if it's not managed carefully.
What Is a Structured Settlement?
A structured settlement pays out your compensation in smaller, regular payments over time instead of all at once; this setup is usually ideal if you have ongoing expenses, like medical care, or if you want a steady income stream.
Here’s how you can customize these types of settlements:
- Payment schedule: Choose how often you get paid — monthly, quarterly, or yearly. For example, instead of receiving $100,000 upfront, you might get $10,000 monthly for ten months.
- Payment amounts: Payments can stay the same or increase over time to help with inflation or changing needs.
- Duration: Decide how long the payments will continue, whether for a set number of years or your lifetime.
How Much Will Go in My Pocket?
While it’s impossible to give an exact number, the final amount will likely depend on attorney fees, case-related costs, and any outstanding debts or liens.
What Percentage Do Lawyers Take From Personal Injury Settlements?
Most personal injury lawyers work on a contingency fee, which means they only get paid if they win. Their fees typically range from 25% to 40% of your total settlement, but it’s usually 33%. Be sure to review your fee agreement upfront so you know exactly how much will go to your lawyer.
Are There Any Other Costs Associated with Personal Injury Cases?
Yes, there can be additional expenses that could impact your final payout. For instance, if your lawyer covers your medical bills upfront, they’ll be reimbursed from your settlement.
You may also have to pay filing and court-related fees, as well as any costs related to investigating your case.
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