A personal injury settlement is an agreement between the injured party (plaintiff) and the at-fault party (defendant) to resolve the claim outside of court. Settlements cover expenses such as medical bills and lost wages and can be paid in one of two ways: as a lump sum or through a structured settlement.
Our Tucker personal injury lawyers are committed to helping you navigate every aspect of your case, including the settlement process. Here’s a detailed guide on how personal injury settlements are typically paid out in Georgia.
Lump sum vs. structured settlement
Lump sum payment
A lump sum payment is a one-time payment that covers the entire settlement amount. This is the most common method for personal injury settlements and allows you to receive the full compensation upfront. Lump sum payments provide immediate access to funds, which can be crucial if you have significant medical bills or need financial relief.
Structured settlement
A structured settlement involves periodic payments over a set period, such as monthly or annually. This method is often used for larger settlements or cases where the plaintiff’s financial needs are long-term, such as a permanent disability. Structured settlements can be tailored to your specific needs, providing a steady income while minimizing the risk of mismanaging funds.
| Lump sum | Structured settlement |
| One-time payment | Periodic installments over a set period |
| Immediate access to funds | Minimizes risk of mismanaging funds |
| Beneficial for plaintiffs who need immediate financial relief | Beneficial for plaintiffs with significant, long-term financial needs |
The settlement payout process
Understanding the payout process can help you anticipate how and when you’ll receive your settlement. Here’s a step-by-step look.
1. Finalize settlement agreement
Once both parties agree on the settlement terms, the agreement is signed, and the at-fault party or their insurance company is legally obligated to pay the agreed amount.
2. Sign release form
Before the settlement is paid, you must sign a release form. This document confirms that you agree to the settlement terms and will not pursue further legal action regarding the claim.
3. Attorney receives funds
In most cases, the settlement funds are sent to your attorney first. This ensures that all legal and financial obligations related to the case are properly addressed.
4. Attorney makes deductions
Before the remaining funds are disbursed to you, your attorney will deduct:
- Attorney’s fees: This is the agreed-upon percentage of the settlement for legal representation.
- Case expenses: These include costs for filing fees, expert witnesses, and other expenses incurred during your case.
- Medical liens: If your medical bills were covered by health insurance, Medicaid, or Medicare, these entities may place a lien on your settlement to recover their costs.
5. You receive the final payout
After all deductions, the remaining funds are paid out to you. Your personal injury attorney will provide a detailed breakdown of the deductions to ensure transparency.
Taxes and personal injury settlements
Most personal injury settlements are not taxable under federal law, including compensation for medical expenses, lost wages, and pain and suffering. However, exceptions exist, such as punitive damages or interest earned on the settlement amount. Consult a tax professional to understand how your settlement might be affected.
How Fox Injury Law supports you during the payout process
At Fox Injury Law, we’re dedicated to ensuring your settlement is paid out efficiently and fairly. We handle:
- Lien negotiations: Reducing medical liens to maximize your final payout.
- Transparent accounting: Providing a clear breakdown of all deductions.
- Financial guidance: Helping you understand your payout options and how to manage the funds effectively.
If you have questions about your personal injury case or need help navigating the settlement process, Fox Injury Law is here to help. Contact us today to learn more about your options and get the dedicated support you deserve.
