The result of most claims with insurance companies or lawsuits is a settlement. Sometimes, a case will be taken to trial and a jury will render a verdict. Regardless, at this time, a sum of money has been awarded to compensate you for your injuries and losses. Many clients wonder what happens next, and why this process can potentially be so time-consuming.
Once a settlement agreement has been reached and a release signed, a check will be issued to the law firm and the client. Attorneys in the state of Texas are required to have what is known as an IOLTA (Interest on Lawyers Trust Account). The monies received must be deposited into this account and, at this time, can’t be used by the attorney for anything unrelated to your settlement. Typically, it can take anywhere from a few days to a few weeks for these checks to be mailed out to your attorney, depending on how complicated the case is. Then, once received, the check must be deposited in the IOLTA and the check must clear the bank, which can also take a few days.
From there, it is up to your attorney to ensure that all of the proper parties are paid. Sometimes, this requires the insurance company to issue checks directly to other parties, such as hospitals with liens, insurance companies with subrogation rights, any monies Medicare or Medicaid may have paid, and/or the Attorney General’s office if there is an active child support lien. Typically, your attorney will also have case expenses and fees that are taken out of your settlement. These will need to be accounted for as well.
Once all of this has happened, your attorney should present to you a breakdown of where all of your settlement money is going. This should include the total settlement value, attorney’s fees, case expenses, and any medical providers, insurance companies, etc. that are being paid out of your settlement. The remainder of the settlement after these have been accounted for is what you, the client, will recover.
The breakdown will require your signature to acknowledge that you agree and understand where and how your settlement funds are being split up; after doing so, you should receive the funds from your attorney. In some instances, these funds may be required to be placed in the registry of the court, a structured settlement, or may all be taken up by outstanding liens. Each case is different and should be evaluated as such.
After agreeing to the terms of your settlement, then your attorney is free to transfer the funds from the IOLTA. At this time, your case is considered closed.
It can be quite a time-consuming process, but the end result is that you have the peace of mind of knowing that your settlement was handled the right way and that all loose ends have been handled.
