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Suffering from a personal injury can be a distressing experience. Not only do you have to deal with the physical pain, but financial hardships can further add to your burdens.
Many times, personal injuries result from someone else’s negligence. When this is the case, you can file a personal injury lawsuit to seek compensation. Gould Injury Law’s personal injury lawyers can help you fast-track your personal injury claim.
When you file an injury claim, you might receive a settlement. This blog post will explain how Connecticut personal injury settlements are paid out.
The Personal Injury Settlement Process in Connecticut
The settlement is an agreement between the injured person and the at-fault party. The injured person essentially agrees to receive payment in exchange for resolving the claim out of court or dropping the lawsuit.
Settling out of court is usually the fastest way for you to receive the compensation you deserve, but the personal injury settlement amount has to be agreed upon by both parties. Once the decision has been made, the payment process follows the steps outlined below.
You sign the release form
Before you receive your settlement money, you will sign many documents. The most important of these is the release form. A release form is a legal document in which you agree not to sue in exchange for the agreed compensation.
The insurance company writes and sends the check
In most personal injury cases, the settlement is paid out by the at-fault party’s insurer. Once the insurance company approves the personal injury settlement, it sends a check. Depending on the terms of the agreement, the check will be written in your name or sent to your lawyer.
Your personal injury attorney deposits the check
The settlement amount is typically held in a legal trust account or escrow account specifically dedicated to client funds. Depositing the check into one of these accounts allows your legal team to ensure all bills and damages are paid according to the settlement terms.
Your personal injury attorney negotiates and pays off medical bills
At the end of a personal injury case, you may be in debt to third parties, like medical providers. Before you receive your settlement money, healthcare providers may place a hold on it. These debts are called “liens” and are negotiable.
Once your lawyer receives the settlement, he or she will negotiate to pay off your debts. Your personal injury attorney may negotiate the following:
Medical liens: Imposed by healthcare providers, such as therapists and doctors, for unpaid medical bills
Health insurance liens: Filed by the insurer to recover the expenses they paid on behalf of the injured client
Hospital liens: Connecticut General Statute 49-73 allows hospitals to place a lien on the liability carrier to pay the hospital the full amount billed before you and your attorney receive the settlement proceeds
Medicare or Medicaid (government programs) liens: To recover medical bills for which these programs paid
Workers’ compensation liens: Filed by the workers’ compensation insurers in order to recover the compensation benefits paid for your workplace injury
Government liens: Set by state taxing authorities to collect unpaid taxes or other debts
Your legal fees are deducted from the settlement
The next step is the payment of legal fees. Before you receive the settlement, any legal fees owed to your attorney must be paid. Your personal injury lawyer will deduct the fees from the settlement amount.
Our Connecticut personal injury lawyers work on a contingency fee basis which means we get paid once you receive your settlement – and only then. The contingency fee is deducted as a percentage of the final settlement amount.
Personal injury attorneys in Connecticut often charge 33 to 40 percent of the settlement money as a contingency fee. But with their help, you may get a larger amount of compensation faster.
You receive the final settlement check
Once the deductions for liens and attorney fees are made, you will finalize the case with your lawyer. During this process, your attorney will provide a settlement packet, which contains copies of your release and paid expenses. The packet should also include instructions on how you will receive your settlement funds.
You could either be paid through an ACH wire transfer or a check. Some settlement agreements may include a confidentiality clause, which prevents you from disclosing the terms of your settlement publicly. The settlement packet also includes information about taxes on your personal injury settlement.
After you have read and signed the documents, you will receive your settlement check.
Tax Implications of Settlements in Connecticut
Taxes are important to consider when you pursue compensation in a personal injury case. Fortunately, a personal injury settlement is not considered taxable income in Connecticut. This means the personal settlement check you receive for medical expenses is tax-free.
But there may be exceptions. For instance, you may pay tax if your settlement payout covers punitive damages. Interest earned on the award is also taxable.
Even if personal injury settlements are not your taxable income, you may still need to report them on your tax return. Accurate reporting is important to avoid issues with the Internal Revenue Service (IRS).
It is crucial to consult with a tax professional or Gould Injury Law attorneys. Experienced personal injury attorneys can help you understand how taxes affect your settlement. Our lawyers can ensure that your claim follows all applicable reporting requirements for fast financial recovery.
Types of Settlement Payment Methods
There are different ways in which Connecticut personal injury settlements are paid, some faster than others. Both parties have to agree on the payment method for the compensation awarded. This is discussed at the end of settlement negotiations or a personal injury lawsuit.
Some payment methods include a single lump sum payment or structured settlement payments.
Lump sum payment
The most common way to get fast compensation in Connecticut is through a lump sum settlement. The defendant’s insurance company issues a single lump sum payment to you and your attorney.
With a lump sum settlement, you receive the money all at once. This one-time payment offers immediate access to the funds. It allows you to cover medical bills and other expenses as fast as possible. You may receive your lump sum settlement payment via check or wire transfer.
Structured settlement payments
The next most common type of payment method is structured payments. A structured settlement is paid over a period of time. This type of payment is usually made in monthly installments.
Structured injury settlements can provide a steady stream of income to help you cover ongoing medical treatment for your physical injuries. Accepting your injury settlement in monthly installments could have tax benefits.
Gould Injury Law’s attorneys can advise you on the best payment method for your settlement. But don’t wait too long to fight for compensation. Fast action is key to your injury claim’s success.
Contact Our Experienced Personal Injury Lawyers Today
Personal injuries can have an impact on your life, both physically and financially. Our experienced personal injury attorneys are here to help you recover as soon as possible. Contact the Gould Injury Law attorneys today for a faster resolution.
We understand that it is overwhelming to go through the personal injury settlement process while you recover from your injuries. Helping you understand how personal injury settlements work is one of the many ways our firm can help you.
When you work with Gould Injury Law, we don’t get paid until you receive a settlement. Call our law firm at 888-WIN-FAST or fill out the online form to schedule your free consultation.