Winning a personal injury case is a huge milestone. After months—or even years—of medical appointments, depositions, negotiations, and court hearings, you finally have a resolution in your favor. But once the settlement or judgment is finalized, many plaintiffs have the same question:
“How long will it take to get my money, and how is it distributed?”
The process isn’t as simple as depositing a check into your account. There’s a precise sequence of steps to make sure all legal and financial obligations are addressed before you receive your share. Understanding how settlement funds are distributed after a case is won can help you set realistic expectations and plan.
Step 1: Funds Are Sent to Your Attorney’s Trust Account
Once a settlement is reached or a court awards damages, the defendant’s insurance company or legal representative issues payment. This is typically sent directly to your attorney’s trust account—known as an IOLTA (Interest on Lawyers’ Trust Account).
Funds don’t go straight to you because your attorney acts as a fiduciary, ensuring that all liens, legal fees, and case expenses are handled first. This protects your interests and ensures proper documentation for every dollar distributed.
Step 2: Attorney’s Fees Are Deducted
Most personal injury attorneys work on a contingency fee basis, meaning they only get paid if you win. The fee is usually a percentage of your recovery, often between 33% and 40% depending on your agreement and whether your case went to trial.
Example:
If your settlement is $300,000 and your contingency fee is 33.3%, your attorney’s fee would be:
$300,000 × 33.3% = $99,900
This amount is deducted before any other distributions are made. Your retainer agreement will outline the exact fee structure.
Step 3: Reimbursement of Case Expenses
In addition to legal fees, attorneys often advance the out-of-pocket costs required to build a strong case. These expenses—sometimes called “case costs” or “litigation expenses”—can include:
- Court filing fees
- Medical record retrieval costs
- Expert witness fees
- Deposition and transcript expenses
- Travel and administrative costs
These costs are reimbursed from your settlement. For example, if litigation expenses total $5,000, that amount will be subtracted from the remaining balance after attorney fees.
Step 4: Payment of Medical and Other Liens
Many personal injury plaintiffs have outstanding medical bills or treatment performed on a lien basis. This means healthcare providers agree to defer payment until your case is resolved, often under a signed letter of protection from your attorney.
Types of liens can include:
- Hospital or medical provider liens
- Medicare or Medicaid reimbursement claims
- Health insurance subrogation claims
- Workers’ compensation liens
- Private medical funding liens
Your attorney will typically negotiate with lien holders to reduce the total amount owed, helping maximize your net recovery.
Step 5: Repayment of Lawsuit Funding (If Applicable)
If you obtained pre-settlement funding to cover living expenses during your case, repayment comes from your settlement before you receive your portion.
At Fund Capital America, our pre-settlement funding is non-recourse, meaning if you lose your case, you owe us nothing. However, if you win, the agreed-upon repayment is deducted from the settlement before disbursement.
Example:
If you borrowed $10,000 and owe $14,000 at settlement, that amount will be subtracted after liens are paid.
Step 6: Final Distribution to the Plaintiff
After all legal fees, case costs, liens, and advances are paid, the remaining amount is issued to you. Your attorney will also provide a settlement statement (or disbursement sheet) showing every deduction and payment.
It’s important to review this statement carefully and ask questions before signing. Once approved, your attorney issues your final check.
Typical Timeline for Receiving Settlement Funds
While timelines can vary, most plaintiffs receive their funds within 30 to 90 days after a settlement is finalized. Factors that can delay distribution include:
- Lien negotiations
- Insurance company processing times
- Court approval for minors or incapacitated adults
- Complex medical or structured settlement arrangements
Special Situations That May Affect Distribution
Some cases involve unique circumstances that change how funds are disbursed:
- Structured settlements — Paid in installments instead of one lump sum.
- Court approval requirements — Needed for minors or vulnerable plaintiffs.
- Bankruptcy or divorce — Settlement funds may be subject to legal claims.
- Estate cases — If the plaintiff passes away before resolution, funds go through probate.
Tax Considerations
In most cases, personal injury settlements are not taxable if they compensate for physical injuries or illness. However, certain portions—such as punitive damages, interest, or non-physical emotional distress awards—may be taxable. Always consult a tax professional for guidance.
Tips to Maximize Your Take-Home Settlement
- Work with an attorney experienced in lien negotiation.
- Ask for regular updates on case costs during litigation.
- Only use pre-settlement funding when truly necessary.
- Stay involved and informed throughout the disbursement process.
What You Should Know
Winning your case is only part of the journey—the settlement distribution process ensures everyone involved is paid fairly and that your financial obligations are resolved. By understanding each step, you can avoid surprises, plan for potential delays, and maximize the amount you ultimately receive.
Who is Fund Capital America?
Since 2006, Fund Capital America (FCA) has been a trusted leader in pre-settlement funding, providing cash advance loans to plaintiffs in personal injury and accident cases. Over the years, FCA has proudly served thousands of law firms and tens of thousands of clients, helping them navigate the financial challenges of litigation. While our core service is pre-settlement funding, we also offer a comprehensive range of services to support law firms and their clients from the beginning of the case to the final settlement check distribution.
Fund Capital America’s Services
In addition to pre-settlement funding, FCA provides a broad array of services designed to alleviate the financial and administrative burdens on injury victims, law firms, and medical professionals. Our services include:
- Pre Settlement Funding
- Policy Limits
- Doctor & Medical Facility Directory
- Doctor & Medical Facility Scheduling
- Language Services
- Investigation Services
- Medical Legal Finance
- Surgery Funding
- Medical Lien Funding
- Law Firm Funding & Law Firm Banking Services
- Law Firm Line of Credit
- Medical Receivables Financing
- Law Firm Services
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Here’s how it works:
Fill out our application form: It takes just 5 minutes to provide the necessary details about your case.
Get prequalified: Our team will review your application and get back to you swiftly, often within hours.
Need assistance? Call us at the number provided for immediate support from our knowledgeable staff.
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