After going through the stress and pain of a personal injury, finally reaching a settlement can feel like a huge relief. But once that number is agreed upon, many people are left wondering, “How much of that money will actually end up in my pocket?” It is a fair question and an important one.
The truth is, you will not keep the full amount. Several deductions will be made before you see your final check. Knowing what those deductions are and how they work can give you peace of mind. As such, let us walk through it together, starting with a quick settlement breakdown.
The Payment Process: What Happens First?
- Settlement Agreement: You and the other party (usually their insurance company) agree on a dollar amount to resolve the case.
- Payment Issued: The insurer sends the check, not to you, but to your lawyer.
- Deductions Begin: Your lawyer uses the funds to pay legal fees, case costs, and outstanding medical bills or liens.
- You Get Paid: After all those obligations are taken care of, the remaining balance is sent to you.
It is a step-by-step process, and while it may take a few weeks, it ensures that everything is handled correctly.
Attorney’s Fees: The Biggest Deduction
Most personal injury lawyers work on a contingency fee basis. That means they only get paid if they win or settle your case. You will not owe them anything upfront. Instead, they will take a percentage of your total settlement as their fee.
- Standard rate: 33% (or one-third) if the case settles before trial.
- Trial rate: 40% or more if the case goes to court, since trials require more time, preparation, and resources.
So, if your total settlement is $90,000 and your case settles without going to trial, your lawyer would receive $30,000. That leaves $60,000 before any other deductions are made.
Other Deductions to Expect
Besides attorney fees, there are other expenses that might come out of your settlement:
1. Case Costs
Your lawyer likely advanced certain costs during your case, such as:
- Filing fees
- Expert witness fees
- Court reporting and transcripts
- Medical record retrieval
These are reimbursed from your settlement. These costs might range from a few hundred to several thousand dollars, depending on the complexity of your case.
2. Medical Bills
If you received medical care but did not pay upfront, those bills may be deducted from your settlement. Sometimes, healthcare providers or insurance companies place a lien on your settlement to ensure they are repaid.
3. Liens or Outstanding Debts
If your health insurance, Medicare, or other entities covered accident-related treatment, they may also seek reimbursement from your settlement.
A Realistic Example
Let’s break down a typical $90,000 settlement:
- Lawyer’s Fee (33%): $30,000
- Medical Bills: $15,000
- Case Costs: $5,000
- Total Deductions: $50,000
- Your Final Payout: $40,000
While this might seem like a significant drop from the original number, remember: without a lawyer, you might not have received anything close to $90,000 in the first place.
Is the Lawyer’s Fee Worth It?
Absolutely. An experienced personal injury lawyer can often increase the total value of your case through expert negotiation, detailed evidence gathering, and strong legal strategy. They also make sure your rights are protected and that you are not being taken advantage of by insurance companies. In most cases, clients walk away with more money in their pockets, even after fees, than they would have received on their own.
Conclusion
Understanding what you will actually keep from a personal injury settlement can help you plan better and avoid surprises. While legal fees and other deductions are part of the process, they also reflect the resources, time, and advocacy that helped secure your compensation in the first place. If you are in the middle of a claim or thinking about filing one, speak to a personal injury lawyer who can walk you through the numbers and fight to get you the best possible result.