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Settlement Check (What It Is And How It Works: Overview)

What is a Settlement Check?

How does the settlement check process work?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s see what is a settlement check, how it works, and what you should expect!

Are you ready?

Let’s get started!

What Is A Settlement Check

A settlement check refers to an amount of money that you expect to receive in the form of a check following the resolution of a lawsuit.

Although the term settlement check refers to a physical “check”, many use the phrase to refer to a direct deposit of settlement proceeds directly to a bank account.

For example, when a person files a lawsuit for personal injury claiming damages, the case may eventually settle where the defendant (or insurance company) agrees to pay a certain amount of money to prevent further litigation.

The way the defendant will pay the “settlement” is by issuing a “check”.

Legal Settlement 

For you to receive a settlement check, you must first be in a legal proceeding of some form such as a motor vehicle accident claim lawsuit, personal injury lawsuit, medical malpractice lawsuit, defective product lawsuit, or any other type of legal action.

When the legal dispute (or lawsuit) is settled between the plaintiff and the defendant, the action is legally settled.

For example, if you file a lawsuit against another for damages caused due to the defendant’s negligence leading to you suffering personal injuries and damages, you are involved in a personal injury lawsuit.

If the defendant eventually decides to pay you a certain amount of compensation so you get compensated (to your satisfaction) for your damages and in exchange you discontinue the proceedings, then we have a legal settlement.

According to the Bureau of Justice Statistics, about 4% of personal injury lawsuits end up going to trial.

The vast majority of lawsuits are actually settled before trial and never end up getting litigated in the courtroom.

Settlement Check Definition

Now that we have a better understanding of what a legal settlement refers to, let’s now define the meaning of “settlement check”.

Here is my definition of a settlement check:

A settlement check is a phrase used to refer to settlement proceeds paid by the defendant to the plaintiff to put a definitive end to their ongoing lawsuit or legal action

The reason why a defendant (or party to a lawsuit) accepts to pay the plaintiff (or the injured party) a sum of money compensating it for damages and, in return, gets the plaintiff to dismiss the lawsuit.

Settlement Check Timeline

What is a check issued after a legal settlement?

Depending on the nature of your case, it may take some time before you can expect to receive a settlement check. 

In a nutshell, expect some delays.

Sign Legal Agreements

Generally, when the parties to a lawsuit reach an agreement in principle, the next step is for the attorneys to draft the legal agreement outlining the terms and conditions of the settlement.

This process can result in many back and forth exchanges between the parties and thus take weeks, if not months, to get to a signed legal agreement.

Settlement Order Issuance

Once the legal agreement is signed, the parties through their lawyers will need to notify the court of the settlement and obtain a settlement order.

It may take between 30 days to 60 days for the settlement order to be issued from the court.

Payment Processing Delays

Once the matter is formally settled, then the defendant will need to actually process the payment and that too can take some time.

In many cases, the defendant or insurance company will pay the plaintiff’s lawyer or law firm with the settlement proceeds who will then need to turn around and pay you.

If you wonder can a lawyer hold a settlement check, the answer is yes.

Most of the time, the funds are held back by the lawyers to ensure they respect the terms of the settlement agreement if they are required to pay third parties, discharge liens, or make other disbursements, then they will deduct their legal fees, and then pay you.

They may also hold the funds for some time to ensure it properly clears through the financial system.

In the end, if you’re wondering where is my settlement check, you should know that it may take months following a settlement for you to receive your check.

Speeding Up The Process

Is there anything that you can do to speed up the process of getting paid your settlement money?

The reality is that the disbursement of the settlement money can take months to complete.

To speed things up, it’s best that you speak to your attorney to know what documents you will need to provide or eventually sign so you can get started on your side.

Also, it’s important for your attorney to speak with all the parties to the lawsuit to ensure that they all provide a list of what documents and information they need to conclude the settlement (like release forms, wire instructions, payment mailing address etc).

If you have creditors that must be paid off or liens to be discharged, it can be a good idea to reach out to the third-party creditors to get a most up-to-date account of what’s owed along with how you can discharge the debt owed to them.

Finally, to win a little more time, instead of asking for a “check”, you may want to consider processing the payment using wire transfer or electronic fund transfer methods to avoid your payment from being lost in the mail and generating more delays.

Settlement Check Process

How does the settlement check process work?

How do you get a settlement check?

To get a settlement check, here is how the process works:

  • Step 1: File a claim or lawsuit
  • Step 2: Negotiate a settlement 
  • Step 3: Sign a settlement agreement
  • Step 4: Get a settlement order
  • Step 5: Get a settlement check

Let’s look at each of these steps.

Step 1: File A Claim or Lawsuit

To receive a settlement check, it goes without saying that you need to be involved in a legal case or have filed a claim.

Filing any random lawsuit or claim does not mean that you will receive a settlement.

In fact, prior to filing a claim, many will seek the advice and guidance of an experienced attorney to help them investigate their claim and quantify their damages before filing a claim or lawsuit.

To file a claim that has a strong chance of leading to a settlement and where the settlement value is satisfactory, you will need to be diligent, careful, strategic, and legally knowledgeable of your rights and options.

The preparation of a claim or lawsuit is probably one of the most important aspects of helping you achieve a satisfactory settlement of your claim.

Step 2: Negotiate A Settlement 

Once a proper lawsuit that is well-founded in fact and law is filed against a defendant, the next step is to do the necessary legal work in the context of the legal proceedings.

Generally, the defendant will respond to the lawsuit and deny the allegations made by the plaintiff.

During the legal proceedings, the lawyers will exchange many legal briefs, motions, and pleading documents.

The parties will also perform discoveries, interrogatories, submit document disclosure requests, and so on, to further strengthen their case leading up to trial.

If your action is strong and you have credible evidence, the defendant will eventually have to make a decision to either settle with you or go to trial.

Each party will weigh the pros and cons of settling and decide whether it’s worth it or not depending on the specific nature of the case.

Step 3: Sign A Settlement Agreement

Should the defendant decide not to proceed to trial (as it may be too risky or costly), the parties can reach an out-of-court settlement.

The settlement negotiations can take time.

It’s very common for lawyers to exchange many proposals and settlement offers before the parties reach a point where they agree to settle the case.

Once a settlement is reached in principal, the next step is to draft and have the parties sign a settlement agreement outlining the terms and conditions of the settlement.

It’s common to see that the parties ask the settlement value to remain confidential or keep certain aspects of the settlement confidential.

Step 4: Get a Settlement Order

Once both parties have reached a settlement, the next step is to submit the settlement to the court and obtain a settlement order.

In other words, the parties must notify the court that the case has settled so that the court can render a judgment ratifying the settlement between the parties and putting an end to the proceedings.

The defendant will want to have a document signed by the plaintiff absolving the defendant of future liability in relation to the same claim.

Generally, the “release” will be part of the settlement agreement that the parties will settle.

Another important aspect is for the court to issue an order to put an end to the proceedings (the case will be dismissed with prejudice).

Step 5: Get a Settlement Check

The final step in the process of getting a settlement check is to actually receive your settlement check (or payment).

Once the case is formally settled and the parties are legally represented by attorneys, it’s quite common for the defendant to pay the settlement proceeds to the plaintiff’s lawyers.

In certain cases, the parties have agreed that the defendant will pay the settlement in one lump sum, in other cases, the settlement may be in the form of structured settlement (or annuities).

Every case is different and the amount or method for paying the settlement will be different.

May ask: how can I track my settlement check or where’s my settlement check?

The best thing is to speak to your attorney to understand the specific payment process agreed with the defendant.

One option is that the defendant has paid your lawyer who will then need to turn around and issue you a check.

Your attorney may hold on to the funds for a few weeks to ensure that the defendant’s payment clears through the financial institutions (to avoid being defrauded).

It’s best to speak to your attorney to show if he or she will hold the settlement check and for how long.

Another option is that the defendant will pay you directly and you may expect a direct deposit or a physical settlement check to be mailed to your address.

Insurance Settlement Check

How does it work to get a settlement check from an insurance company?

When a claim is filed against an insurance company, you can also expect to receive a check for the settlement of the claim.

Typically, when an insurance claim is filed, the insurance company will assign an investigator or claims analyst to investigate the claim.

If the insurance company comes to the conclusion that the claim is an eligible claim under the insurance policy, it will pay the beneficiary of the policy or claimant a settlement check consistent with the terms of the policy.

If the insurance company is involved in a lawsuit, then it will want to ensure that the plaintiff and insured release it from future liability before issuing any payment.

When the insurance company receives all the proper paperwork following a settlement, it will then process the payment.

In many personal injury cases, the insurance company will issue a check to the plaintiff’s attorneys who will then deduct any contingency percentage they are entitled to and pay the difference to their client.

Lawsuit Settlement Check Takeaways 

So there you have it folks!

What are the steps for receiving a settlement check?

Could it be that your lawyer received the settlement check?

I want to track my settlement check!

When a person is involved in a lawsuit and the case is settled, eventually the plaintiff or claiming party can expect to receive his or her check for the settlement of the case.

A settlement is a mutual agreement between the litigants putting an end to the dispute and voluntarily dismissing the case filed before the court.

Typically, as part of the settlement, the defendant will need to pay the plaintiff compensation for damages or an insurance company pays a certain amount of money to settle the dispute.

Here is how you can expect to get your settlement payment:

  • Sign the legal agreement, documents, and release forms
  • Get a settlement order from the court 
  • Your lawyer will receive the settlement proceeds from the defendant or defendant’s insurance company 
  • The money will be put in the attorney’s escrow account
  • Your attorney may need to pay some creditors or remove liens by using the money from escrow 
  • Your attorney will deduct his or her legal fees and costs as per the terms of your fee agreement or contingency fee arrangement 
  • Your attorney will issue a settlement check to you for what’s left in escrow 

Settling a case may be advantageous to all parties as they avoid the uncertainty and risk of litigation and can mutually agree to terms and conditions that suit them (at least that suits them better than a judgment).

If you are not sure what is the status of your settlement check and you want to track your payment, it’s best that you call your attorney to see what is the status of your payment.

I hope I was able to answer your questions about the meaning of a “settlement check”, the process of receiving a settlement check, how long can an attorney hold a settlement check, and more.

Let’s look at a summary of our findings.

Settlement Check Meaning

  • When you file a lawsuit, you may either have to go all the way to get an award from the court or if the parties want to avoid a trial, they can settle the case
  • A legal settlement is when the parties mutually agree to put an end to the legal dispute and, in most cases, a party pays financial compensation to another party 
  • To settle a case, you’ll generally need to sign a settlement agreement and release so the defendant or insurance company makes a deposit in your attorney’s escrow account who will then need to pay you in return
  • A lawyer received settlement check may be held for some time before it is released by the attorney to have the funds cleared, pay off debt or creditors, process his or her own legal fees, and then issue a payment to you
  • You can track your payment by speaking to your attorney to see the stage your case has reached 
Car accident lawsuit
Car accident settlement
Case dismissed 
Class action lawsuit 
Dangerous product claims
Dismissed with prejudice
Dismissed without prejudice 
Expert witness 
Fact witness 
Litigation funding 
Litigation support 
Medical malpractice settlement 
Mesothelioma lawsuit settlement
Motorcycle accident settlement 
Negligence claim settlement
Personal injury settlement 
Request for admission 
Request for production 
Settlement agreement 
Settlement conference 
Structured settlement 
Truck accident settlement
Litigation docket 
Litigation funding 
Litigation support software 
Litigation support specialist 
Motion in Limine
Motion to Amend 
Motion to Compel
Motion To Compel Discovery
Motion to Consolidate
Motion to dismiss 
Motion to quash 
Motion to strike
Motion to suspend 
Oral arguments
Process server 
Property valuation 
Subpoena ad testificandum
Subpoena duces tecum
Summary judgment 
Trial lawyer

Editorial Staffhttps://lawyer.zone
Hello Nation! I'm a lawyer and passionate about law. I've practiced law in a boutique law firm, worked in a multi-national organization and as in-house counsel. I've been around the block! On this blog, I provide you with golden nuggets of information about lawyers, attorneys, the law and legal theories. Enjoy!


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