Receiving a settlement check may be the final victory after a long legal battle, but the process is not complete until the money ends up in your pocket. Lawyers often play a huge role in handling settlement checks, ensuring all the responsibilities are covered legally and financially. This step is an important one, sometimes giving rise to delays that get on the nerves of their clients.
Understanding how long a lawyer can hold your settlement check and why this happens is important. Factors like bank clearance times, legal obligations, and unresolved liens affect the timeline. Knowing these facts makes you more confident in navigating the process and reduces unnecessary stress. This article breaks down the timeline, reasons for delays, and what you can do if your settlement check is held longer than expected.
The Process of a Settlement Check: What to Expect
There are a few procedures involved in the process before the settlement check makes its way to your doorstep. Once a settlement has been reached, the defendant or the insurance company will issue the check on your behalf. This is payable to you and your attorney.
This first goes through your lawyer, who deposits it into a trust or escrow account. Such accounts are designed to keep the client’s funds separate from your attorney’s personal or business finances. Depositing the funds into such accounts is a legal and ethical requirement.
The bank then clears the check by ensuring that funds are available. Generally, clearance at the bank is done within 5 to 7 business days. Larger checks may require a longer verification process. Upon clearing of funds, other aspects of the case are taken care of by your lawyer, such as liens or deducting fees.
How long may a lawyer hold your settlement check?
The lawyers, on average, keep the settlement checks for two to six weeks. It depends on how complicated your case is. Most delays stem from necessary steps to settle all financial and legal matters properly.
Occasionally, the timeline may stretch beyond six weeks. There may be some issues in these cases, for example, an argument over the medical liens or delay from third parties. Even though such delays are quite rare, they do take place in complicated cases. Attorneys will clear up these issues before disbursing your funds.
Why Does a Lawyer Hold Your Settlement Check?
Several important reasons explain why lawyers may hold settlement checks longer than expected. Understanding these reasons can help you navigate the process more easily.
Bank Clearance Times
Banks require time to verify the legitimacy of funds, especially for large amounts. Clearance usually takes 5 to 7 business days, but it may take longer for checks exceeding a specific value. This step prevents complications like bounced checks or fraudulent payments.
Resolving Liens or Medical Bills
Many personal injury cases involve medical treatments. Such treatments often leave one with unpaid bills. Healthcare providers or insurers may put liens on your settlement to recover those costs. Your lawyer negotiates and settles these liens to ensure no future legal disputes arise.
Deduction of legal fees and cost
The lawyer subtracts their legal fees and case-related costs from the settlement. These are, for example, court filing fees, expert witness costs, and administrative costs. This step is detailed in your contingency fee agreement, ensuring transparency.
Addressing Complex Issues or Disputes
Occasionally, disputes arise over settlement terms or distribution. These can involve disagreements between multiple claimants or challenges from lienholders. Lawyers must resolve these issues before funds are released to avoid further complications.
Can a Lawyer Hold Settlement Funds Indefinitely?
No, a lawyer cannot hold your settlement funds indefinitely. Strict ethical rules govern how attorneys handle client funds. They must act in your best interest and provide clear reasons for delays. If they fail to do so, they may be violating professional standards. Lawyers are also required to maintain regular communication, updating you about the status of your settlement.
What to Do If Your Lawyer Delays the Settlement Check?
Unexplained delays can lead to frustration and concern. If you believe your lawyer is holding your settlement, check longer than necessary. Here’s what you can do:
Request an Explanation
Contact your lawyer for a clear timeline and detailed reason for the delay. Often, direct communication resolves misunderstandings.
Review Your Settlement Agreement
Settlement agreements often outline the timeline for receiving your funds. Understanding these terms helps you identify if delays are outside the norm.
Consult Another Attorney
Seek a second opinion from another legal professional. They can evaluate your situation and advise if the delay is justified.
File a Complaint
If you suspect unethical practice by an attorney, consider taking it up with the respective state’s bar association. Lawyers should behave professionally, and violations may come under investigation.
Typical Timeline: What’s Normal and What’s Not?
The process of receiving your settlement funds typically follows these steps:
- Issuance of the Check
The defendant or their insurance provider sends the check to your lawyer within two weeks of the settlement agreement. - Deposit into Escrow
Your lawyer deposits the check into a trust or escrow account. This ensures the funds are handled securely and legally. - Bank Clearance
The bank processes the check to verify the funds. Clearance takes about 5 to 7 business days. - Resolution of Liens and Bills
Your lawyer negotiates and pays off any outstanding liens or medical bills. This step can take one to three weeks, depending on the complexity. - Deduction of Legal Fees
Attorneys deduct their fees and costs as outlined in your agreement. This process typically takes only a few days. - Disbursement of Funds
After all obligations are met, your lawyer disburses the remaining funds to you. This final step usually occurs quickly.
If delays extend beyond six weeks without valid reasons, it’s essential to follow up with your lawyer.
Avoiding Delays: Tips to Ensure a Smooth Process
Taking proactive steps can help avoid unnecessary delays:
- Provide All Necessary Documents
Submit complete information to your lawyer to streamline the process. Missing documents can cause unexpected delays. - Maintain Regular Communication
Stay in touch with your lawyer and request updates throughout the settlement process. - Understand Your Agreement
Discuss the timeline and potential challenges with your attorney during initial consultations. Knowing what to expect reduces stress.
Conclusion: How Long Can a Lawyer Hold Your Settlement Check?
The timeline for receiving your settlement check depends on several critical factors. Bank clearance, resolving liens, and deducting legal fees contribute to the process. Most lawyers release funds within two to six weeks, ensuring all obligations are met.
If delays occur, understanding the reasons and communicating with your attorney is key. Knowing your rights helps address any concerns confidently. Ethical guidelines ensure lawyers cannot hold your settlement check indefinitely without valid reasons.
The result of the whole process would be a settlement check but staying informed and active ensures that the entire process moves smoothly and without hassle. You can have your settlement on time if you are aware of the timeline and act accordingly.