If your lawyer received your settlement check and you haven’t seen the money yet, it can feel alarming. But in most cases, nothing improper has occurred; your attorney is often legally required to receive the check first and distribute the funds based on your fee agreement and outstanding obligations tied to your case.
A large part of the confusion happens when pre-settlement funding or medical liens are paid from your settlement before you get your portion.
Once your attorney’s fees, case expenses, pre-settlement legal funding, and other liens are deducted, there may be less money left than you expected; and in some cases, very little or none at all.
How Pre-Settlement Funding Affects Your Final Payout
If you took out pre-settlement legal funding, repayment typically happens directly from your settlement proceeds. Here’s how that works:
- The funding company fronts you a cash advance based on your expected recovery.
- Once your case settles, your attorney must repay the funding company from the settlement before releasing your portion.
- The repayment amount, including any fees or agreed-upon charges, is deducted before you receive your funds.
To someone unfamiliar with the process, it may look like your lawyer “took” your settlement. In reality, they’re fulfilling legal and contractual obligations to repay the advance you already received.
When you combine repayment of pre-settlement funding with attorney fees and court costs, your net payout may be much smaller than expected. That doesn’t mean something is wrong, but you should always receive an accounting explaining the deductions.
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Other Costs That May Be Deducted From Your Settlement Check
When a settlement is finalized, the full amount does not go directly to you. Before any money is distributed, your attorney is responsible for paying certain debts and obligations tied to your case.
Several types of liens or obligations may be paid before you receive your share:
- Medical liens and bills: If doctors, hospitals, or insurers covered your treatment with the expectation of repayment, your lawyer must pay them from your settlement.
- Health insurance reimbursement: Private insurers, Medicare, and Medicaid may require reimbursement for any accident-related treatment they paid for.
- Case expenses: Your attorney may deduct costs for court filing fees, expert witnesses, medical record retrieval, depositions, travel, or investigation expenses.
- Attorney fees: In contingency cases, your lawyer deducts the agreed-upon percentage directly from the settlement; this is typically spelled out in your fee agreement.
After these deductions are paid, whatever is left is the amount you receive. This remaining balance is your final disbursement, which may be significantly lower than the total settlement, depending on the fees, liens, and expenses involved.
Your attorney should provide a clear breakdown so you understand exactly where the money went and how your final amount was calculated. If anything appears incorrect or unclear, you have the right to ask questions and request clarification.
How Long Until You Get What’s Left?
Even after your attorney receives the settlement check, it may take a few days to several weeks before you receive your portion. Common reasons include:
- Verifying lien amounts
- Waiting for funding companies to confirm payoff figures
- Negotiating lien reductions
- Processing the check through a trust or IOLTA account
- Preparing settlement distribution statements
If you’re unsure about the timeline, ask your attorney for an estimated date of disbursement.
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What to Do if You’re Concerned About Your Funds
If you feel unsure or worried about how your settlement funds are being handled, take proactive steps to protect your interests. Being informed and organized can help you address concerns calmly and effectively.
Here’s a step-by-step guide:
- Review your fee agreement and settlement documents: Carefully read your attorney-client fee agreement to understand how legal fees and case expenses are calculated. Check your settlement documents to see how the total award is being distributed. Make note of any sections that are unclear or that raise questions.
- Request an itemized accounting from your attorney: Ask your lawyer to provide a detailed breakdown showing exactly how fees, costs, and expenses were deducted from your settlement. Review the statement carefully to confirm the numbers match your expectations and the fee agreement.
- Ask questions and seek clarification in writing: If anything on the accounting or settlement documents is unclear, request an explanation in writing. Keep a record of all communications with your attorney regarding your funds. Written documentation can be helpful if you need to escalate your concerns.
- Escalate if necessary: If you believe your lawyer misused the funds or hasn’t provided proper accounting, you can contact your state bar association, a legal ethics hotline, or another attorney for a second opinion.
You have the right to transparency. Make sure the numbers match what was promised and that every expense is clearly explained.
If something doesn’t add up or your lawyer won’t provide answers, you can contact your state bar association or seek guidance from another attorney.
Your pre-settlement funding consultation is free — contact us today!
You Have Options if Your Lawyer Took Your Settlement Check
Clear communication with your attorney is key. Ask questions, request detailed accounting, and make sure you understand how your settlement is being distributed. Transparency from your legal team helps you feel confident that your funds are being handled properly.
Taking proactive steps empowers you to protect your financial interests and focus on what matters most: your recovery, your family, and your future. Pegasus Legal Capital has been helping plaintiffs regain financial control since 2007.
With the right information and trusted resources, you can navigate this process with confidence.
Your pre-settlement funding consultation is free — contact us today!