What Do I Do After I Win a Settlement?

After suffering through the trauma of an accident, going through months of recovery, and then navigating through the insurance claim negotiation process with the help of your attorney, you are finally awarded a settlement. Congratulations! Now, you’re asking, “What do I do after I win a settlement?”

Awarded Damages

Before any settlement is agreed to, you need to come up with the right amount of compensation to demand. Your award could cover the following three types of damages:

Special Compensatory Damages

These will be all direct expenses related to your injury and recovery. These will be all the bills for ER visits, doctor exams, surgery (if necessary), medications, medical supplies, and any other out-of-pocket expenses that you incurred because of the accident. All of these expenses will be backed up by actual bills and receipts.

General Compensatory Damages

This is the category of damages that aren’t quantified with a specific number. They are related to things like prolonged pain, mental anxiety and loss of quality of life. Most often, the multiplier method is used to calculate this amount. The number for the special compensatory damages will be multiplied by a number between one and five. The more serious the injury, the higher the multiplier.

Punitive Damages

These types of damages will only show up in a civil lawsuit. This is a way to punish a defendant for directly causing the action through clear negligence. A good example of this is if the motorist who caused your accident was driving under the influence of drugs or alcohol.

Documents Needed for Getting Your Settlement Check

You have two options for a settlement. It can come directly from an insurance carrier or as the result of a personal injury lawsuit. According to the Nevada Rules of Civil Procedure, once the Court signs off on the judgment in a personal injury lawsuit, the defendant has ten days to cut your settlement check. If you have reached a settlement directly with an insurance company, they have 30 days to make the final payment.

Given what you’ve gone through, that is not a long time to wait for the final payout. The average settlement amounts can range from $3,000 to $75,000 or more. Before the checks are cut, you will need to sign a release of all claims. That document will generally be accompanied by a settlement statement w details any disbursements made. It will also spell out any requested confidentiality terms.

Most importantly, that release puts an end to your case. It means that you have accepted the settlement offer and will not be able to pursue any further action against the insurance company or anyone else named in the lawsuit.

Consider the Tax Requirements

The first consideration you have to think about when receiving a settlement are the tax implications of doing so. Nevada has no state tax, so there are no obligations there. With the Internal Revenue Service (IRS), several portions of your settlement might be considered taxable, though. The part of your settlement that goes towards medical bills, replacing property, or emotional distress is not taxable. However, settlement funds covering lost income and punitive damages are taxable.

Also, if the settlement accrued any interest while you were awaiting a resolution to your case, that could be considered a “gain,” which would be taxable. Discussing your tax implications with an experienced attorney or financial planner is essential.

Catch Up on Your Bills

If your injury has put you in a financial crisis, you may want to use your settlement check to get caught up. That starts with your outstanding medical bills. Often, medical bills are paid directly by your attorney, who will receive the settlement check. They will ensure that all of those expenses are taken care of. They will also deduct the agreed amount for their fee. After that, you’ll receive the balance.

You might also consider paying off any debts you’re paying high interest on. This is especially important if you are transitioning into retirement. You don’t want to carry debt into your golden years.

Put Your Money To Work

After catching up on your bills, you might have a decent amount of settlement money left over. A wise move would be to put a portion of those funds aside and allow them to make money for you. There are several investment options you can look into that can pay dividends. These are the types of investments that are for longer planning. In other words, you don’t need a “get rich quick scheme.” Instead, you can discuss with a financial advisor the type of program that lets you save and grow your money.

Training and Education

If your injury prevents you from going back to your job, you might be able to take up another type of work with training and education. You can apply your funds to courses that can open up new career opportunities.

Create a Will and Trust

Your settlement can benefit you and your family. You need to look towards the future by setting up a will and trust. As your accident proves, life can change in an instant. Having a will in place will provide your family with support when they need it the most.

Getting Legal Advice

What happens if you win a settlement but don’t get paid? That is where the help of an experienced attorney can be a benefit. They will have several options available to compel the defendant to pay up. Here is what they can do:

• Send reminder letters
• Have the Court reinforce their order or threaten to hold them in contempt
• Contact the defendant’s employer and garnish wages
• Set up a payment plan
• Put a lien on property or assets

With a lien, if the property is sold, the money will go directly to you. There might also be an option to seize property outright. All of these measures will be done in support of the courts.

The hard work that your attorney has provided throughout your personal injury lawsuit can extend to providing legal advice on how to handle your settlement. The Law Office of Matthew L. Sharp can provide that guidance. Our office has helped our clients recover millions of dollars in settlements. We want to help you secure a fair settlement if you’ve been hurt because of someone else’s negligence. Call to set up a consultation to discuss your legal options today.