In Texas, once a personal injury settlement is reached, you may wonder how long your attorney can legally hold settlement checks before disbursing them to you. At Amanda Demanda Injury Lawyers, our dedicated personal injury services in Texas begin with a free consultation. During this consultation, our attorneys will explain the settlement check duration and address all your questions and concerns.
The Settlement Check Delivery Process in Texas
Once a settlement agreement is reached between the injured party (plaintiff) and the at-fault party (defendant), several steps must occur as part of the personal injury lawyer settlement timeline:
Settlement Agreement Finalization
Both parties must sign a formal settlement agreement, which outlines the terms of the settlement. This document is legally binding and may take several days to finalize.
Insurance Company Processing
If the settlement involves an insurance company, the insurer typically issues the check. In Texas, most insurers disburse settlement funds within 30 days of receiving the signed release agreement, as required by law.
Settlement Check Delivery
The settlement check is usually made payable to both the client and the attorney. It’s sent to the attorney’s office to ensure compliance with all legal and financial obligations before the client receives their portion.
Depositing into a Trust Account
Upon receiving the settlement check, the attorney must deposit it into a client trust account (also known as an Interest on Lawyers’ Trust Account or IOLTA). This ensures the funds are handled securely and ethically.
How Long Can a Lawyer Hold the Settlement Check in Texas?
In Texas, once a personal injury claim settlement is finalized, many clients expect to receive their compensation quickly. However, it’s important to understand that while there is no exact time limit defined by statute, the State Bar of Texas requires attorneys to disburse client funds “promptly” after all necessary conditions have been met.
This includes clearing the funds, resolving outstanding liens, calculating costs, and obtaining client consent. On average, most lawyers hold settlement checks for about 5 to 10 business days but various factors can cause delays.
Lien and Debt Resolutions
One of the most common reasons for delayed settlement check disbursement is the need to address outstanding liens or debts. This includes:
- Medical Liens from Healthcare Providers: When you receive medical treatment after an accident, the hospital or provider may place a lien on your personal injury settlement to ensure they are reimbursed for unpaid services. Your attorney may hold your settlement check because they are obligated to resolve these liens before releasing any remaining funds to you.
- Health Insurance Reimbursements: If your health insurer paid for accident-related medical bills, they may have a right to be reimbursed from your settlement under a process called subrogation. Your personal injury law firm must review your insurance policy and negotiate repayment, if applicable, before disbursing your share of the lawsuit settlement check.
- Medicare or Medicaid Liens: Government programs like Medicare or Medicaid require reimbursement from your settlement if they covered accident-related medical expenses. Failing to properly resolve these liens can result in future penalties or a delay in benefits.
- Child Support Arrears: If you owe back child support or have other legal obligations, the state may intercept a portion of your settlement to satisfy those debts. Your attorney must check for any active court orders or liens and comply with them before distributing funds to you.
Attorneys are legally required to satisfy these liens before releasing the remaining funds to the client. Sometimes, the attorney may negotiate lien reductions to maximize your take-home amount, but this process can take several days or even weeks depending on the responsiveness of the lienholder.
Attorney Fees and Case Costs
Personal injury cases are typically handled on a contingency fee basis, meaning the attorney receives a percentage of the final settlement. In addition to the agreed-upon legal fees, your lawyer will deduct case-related expenses, such as:
- Court filing fees
- Expert witness charges
- Records and deposition costs
- Private investigator or accident reconstructionist fees
Careful accounting and documentation takes time and that may be a reason lawyer hold your settlement check. Depending on the complexity of the case, calculating these deductions accurately may delay final payment in the settlement process.
Client Communication Delays
In some situations, attorneys need the client’s final authorization before releasing funds. This may include confirming the distribution amount, approving lien settlements, or signing release forms. If the attorney cannot reach the client or if the client delays providing necessary signatures, the disbursement process can stall. Prompt communication between the client and attorney is essential to avoid unnecessary hold-ups.
Disputes Over Allocation
When multiple parties are involved, such as co-plaintiffs, creditors, or guardians for minors, disagreements over how the funds should be divided can arise. Until the dispute is formally resolved through negotiation, mediation, or court intervention, the attorney may be ethically and legally required to hold the settlement funds in trust. This ensures compliance with professional responsibility rules in the settlement check process while protecting the client’s interests.
Steps to Take in Case of a Delay in Settlement Check Release
While some delays are inevitable, attorneys must act in their client’s best interest and avoid unreasonable hold times. If you believe your attorney is unnecessarily withholding your settlement funds, Texas law provides remedies:
- Request an Explanation: You can formally request a detailed breakdown of why the funds are being held and the steps being taken to resolve any outstanding issues.
- File a Complaint: If you suspect your attorney is violating ethical obligations, you can file a grievance with the State Bar of Texas.
- Seek Legal Recourse: If the delay is unreasonable and results in financial harm, you may have grounds for a malpractice claim against the attorney.
Potential Penalties in Texas for Delayed Payment by Insurance Companies
If an insurance company is responsible for the delay in issuing the settlement check, Texas law imposes strict penalties. Under the Texas Prompt Payment of Claims Act (Texas Insurance Code §542), insurers must pay valid claims within a specific timeline or face interest penalties and potential liability for attorney fees. This law helps protect plaintiffs from undue financial burdens caused by delays.
Common Misconceptions About Settlement Timelines in Texas
- “I’ll receive the check as soon as the case settles”: While a settlement resolves the case, the process of issuing, depositing, and disbursing the funds takes additional time due to procedural and legal requirements.
- “Attorneys hold funds unnecessarily”: Attorneys are legally and ethically bound to address all liens, fees, and obligations before disbursing settlement funds. Delays are typically caused by these requirements, not by negligence.
Get Strong Legal Representation from Our Experienced Personal Injury Attorneys
At Amanda Demanda Injury Lawyers, we understand how critical your settlement funds are to your recovery and financial stability. With a proven record of recovering millions of dollars in settlements for our clients, we’re strongly positioned to hold the negligent parties accountable for the largest possible compensation you’re owed. To schedule your free consultation, call us 24/7 or contact us through our form.
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