Reaching a settlement in a legal case is often a moment of relief, especially after a long and challenging process. Whether it’s a personal injury claim, a car accident case, or any other legal dispute, receiving a settlement check signifies the resolution of your case. However, many individuals are surprised to find that even after an agreement has been reached, their lawyer may still hold onto their settlement check for a period of time before releasing it.
This delay can be frustrating, especially when you are relying on the funds to cover medical bills, lost wages, or other financial obligations. Understanding why lawyers hold settlement checks, the legal timeframes involved, and what you can do to expedite the process is crucial for claimants seeking to receive their rightful compensation as quickly as possible.
The Settlement Process
Before diving into how long a lawyer can hold a settlement check, it is essential to understand the settlement process itself. Generally, the steps include:
Negotiation and Agreement: The plaintiff and defendant reach a settlement agreement, often through mediation, negotiation, or court orders.
Signing the Release Form: The plaintiff must sign a release form, which states that they accept the settlement amount and agree not to pursue further legal action.
Issuance of the Settlement Check: Once the release form is signed, the defendant or their insurance company issues the settlement check to the plaintiff’s lawyer.
Deposit into a Trust Account: The lawyer deposits the check into their law firm’s trust account, where it remains until all necessary deductions are made.
Deductions and Payments: The lawyer deducts legal fees, outstanding medical bills, and other liens before issuing the remaining amount to the client.
Final Disbursement: After all obligations are met, the lawyer releases the funds to the client.
Why Lawyers Hold Settlement Checks
Lawyers do not typically hold onto settlement checks without reason. Some common factors that contribute to the delay include:
1. Processing and Clearing the Check
Settlement checks are usually issued by insurance companies or large corporations, and these checks often take time to clear. The lawyer must deposit the check into their trust account and wait for the bank to process it. This step can take anywhere from a few days to a couple of weeks, depending on the bank’s policies.
2. Paying Outstanding Liens and Debts
If you have outstanding medical bills, child support payments, or other liens against your settlement, your lawyer must settle these debts before releasing the remaining funds to you. The process of negotiating and paying liens can take additional time, especially if there are disputes over the amounts owed.
3. Legal Fees and Attorney’s Cut
Most personal injury and other contingency-based cases involve attorney fees, which are typically a percentage of the settlement. The lawyer needs to ensure their fees are properly deducted before disbursing the funds.
4. Court Approval (If Required)
Certain cases, such as those involving minors or wrongful death settlements, may require court approval before funds are disbursed. This process can add additional delays.
5. Disputes Over Settlement Terms
If there is any disagreement between the parties about the settlement terms, additional legal review may be necessary before the check is released.
6. Administrative and Clerical Work
Law firms have administrative processes they must follow, which may involve verifying client information, preparing accounting records, and ensuring compliance with ethical obligations.
How Long Can a Lawyer Legally Hold Your Settlement Check?
There is no universal law that dictates how long a lawyer can hold a settlement check, but most states have regulations requiring prompt payment. Generally, lawyers should release the settlement check within 14 to 30 days after receiving it. However, several factors can extend this timeline:
Bank processing time (3-10 business days)
Lien negotiations (several weeks to months if contested)
Court approval requirements (varies by jurisdiction)
Attorney-client disputes (can cause indefinite delays if unresolved)
What to Do If Your Lawyer Is Holding Your Settlement Check for Too Long
If your lawyer is holding onto your settlement check longer than expected, you have several options to address the situation:
1. Communicate with Your Lawyer
The first step is to reach out to your lawyer and ask for a clear explanation of the delay. Understanding whether the delay is due to check clearance, lien payments, or administrative processes can help set expectations.
2. Request a Written Timeline
Ask your lawyer for a written timeline of when you can expect to receive your funds. A clear, documented response ensures accountability and allows you to track progress.
3. Check for Unpaid Liens
If unpaid liens are causing delays, you may consider negotiating them yourself or requesting an update on their resolution status.
4. File a Complaint with the State Bar Association
If you suspect unethical behavior or unreasonable delays, you can file a complaint with your state’s bar association. Lawyers are bound by ethical rules and must act in their clients’ best interests.
5. Hire a Different Attorney
In extreme cases where your lawyer refuses to release your settlement funds without valid reason, you may need to hire a different attorney to take legal action against them.