While many believe personal injury lawsuits end in a courtroom decision, the fact is that many are settled before being seen by a judge.
Receiving compensation for your injuries is crucial in paying off medical bills, receiving lost wages, and covering emotional trauma and turmoil caused by the incident.
At the Law Offices of Erika E. Anderson, our personal injury lawyers in New Mexico understand how debilitating injuries from accidents can be. That’s why we want to explain how settlement payments work and the processes involved.
How are settlements paid out?
Every case and every settlement is unique. A settlement agreement outlines the agreement’s details, the amount to be paid, and how it will be paid out. For the most part, settlement payments fall under 2 categories.
Lump Sum Settlements
Lump sum settlements give you the total compensation amount in one payment. This means you can pay off your medical debts, lawyer fees, and other accumulating debts as the result of your accident all at once.
Structured settlements involve smaller payments given during a specified period. These payments usually occur monthly.
Many structured settlements will give you an immediate lump sum to pay off lingering medical bills and other related expenses to your case. Then, smaller amounts are given until the agreed-upon settlement is paid in full.
Some structured settlements involve a lump sum payment given at the end of the compensation period. This type of payment usually pertains to personal injuries happening to children, where they receive the last lump sum when becoming adults.
The main advantage of structured settlements is that you can earn interest, increasing your payments to align with inflation. You can also request to have your payments increase over time.
What is the process for receiving settlement payments?
After reaching a settlement, it can still take weeks to see your lump sum or first structured payment. Here are the general steps taken before you receive your money.
1. Signing the Release
Once an agreement has been accepted, you’ll sign several documents. One of these documents involves “releasing” the at-fault party and their insurance company from future claims involving the injuries and/or harm occurring from the accident.
2. A Check Is Sent to Your Personal Injury Attorney
Once the at-fault party’s insurance provider receives the release and other signed documents, the insurance company writes a check and sends it to your attorney.
3. Your Lawyer Negotiates with Creditors and Pays Debts
Medical bills related to your injuries often become past due during the settlement process. Due to this, it’s normal for liens to be placed on the settlement.
Your personal injury lawyer will then negotiate with your medical provider’s creditors to reduce what you owe for your medical expenses. This helps you keep more of the settlement money for yourself.
Once the negotiations are complete, your attorney will pay the creditors from the established legal trust.
Your attorney will then deduct the contractual fees owed for representation. You and your lawyer agreed upon this fee before proceeding with your case.
Your settlement payment is then deposited in a legal trust.
4. You Receive Your Settlement Payment
Once the liens, legal fees, and other expenses have been paid, you’ll receive your lump sum or first structured settlement payment.
Looking for the best personal injury lawyers in New Mexico?
At the Law Offices of Erika E. Anderson, we’ve been successfully helping New Mexicans win their personal injury cases. Trust our experienced and reputable lawyers to help you receive the total compensation you deserve. Schedule a free consultation today with our knowledgeable personal injury lawyers in New Mexico!