How Long Can My Attorney Hold My Settlement In Escrow?

Winning a personal injury case or finally getting it concluded on a settlement table is no quick or easy thing. The process that starts from making out and filing a claim and ending at ultimate settlement can take up to months and often years to wrap up. Being a claimant, you will witness your desperation to receive settlement monies bursting through the roof. This is because of the hurdles you’ve come through and the delay that has already caused. You might have pending bills to pay, debts to settle, and plans to carry out, all of which are now dependent on the expected bounty. 

Legislations, attorneys, and contrasting delays

There are legislations in certain states restricting the maximum waiting time for payable settlement monies. Thirty days is the maximum period for payment of the settlement in many jurisdictions. Despite such statutory provisions, you will encounter delays: most taking weeks and even months.

Even after the negotiations are finished, and the settlement agreements are signed, you may still have to wait a long time before receiving the agreed compensations. 

There are several steps involved before you see your money in your bank account. 

It would be best to never hold your attorney responsible for the delay since their contribution is minimal. With this said, the exact delay varies from case to case, and it entirely depends on the defendant’s attitude towards your settlement. 

A reluctant, unwilling party hesitant to pay money out of pocket will cause delays without a reason or benefit. For this reason, you must be prepared and stay patient to face certain annoying formalities in the procedure.

Release forms

After settlement of matters, and the liable party agrees to pay compensation to you, they will also expect some form of assurance from similar future claims. The defendant wants to ensure that what they are paying you is the only cost they’ll pay concerning this specific claim. For this very reason, they will ask you to sign a release form that actually “releases” the defendant from all future liability arising out of this claim. By signing the form, you undertake not to pursue further legal action against the person for the injuries in question.

If you have a different case against the same defendant, you must surrender your future claim and pertain to the present settled lawsuit only. The settlement would, of course, have no impact upon other claims.

The delay part here comes in several ways. 

The terms of the release forms are proposed by either party and must be equally acceptable. Matters are unnecessarily prolonged when the release form contains a clause not deemed acceptable by the other party. Redrafting may be required between attorneys, following repeated reviews and thereupon approvals, causing even more delays. You must be prepared to dig your way through these hassles, after completion and satisfaction of which only shall you be able to receive the settled bounty.

If you have a delayed settlement, see our post-settlement loans to learn how legal funding can help.

Internal procedural delays

Another reason for excessive delays in settlement matters is the requirement of compliances by the other party. If the defendant is a corporation or a hospital, fulfilling their agreement can take some time. Unfortunately, hundreds of loopholes exist in which insurance companies use to exploit and frustrate victims. Whether or not there exists a maximum duration prescribed by the state, the law applies to when the defendant receives the release form. It can take up to a week for them to process it. Once the release form is finalized, your attorney should receive your settlement check instantly.

After the attorney receives the money

There must be no surprises after FINALIZING things with the defendant. The defendant will instantly deposit a check of your final settlement amount. Once cleared, your attorney keeps the amount in trust or escrow on your behalf. Most attorneys prefer to transfer the client their fair share of the money after deductions as soon as possible.

How does it work?

First of all, the attorney or his firm will set aside the amount you owe to them for representing you in the proceedings. After settling legal professional fees and expenses, what is left is a bunch of liens and bills pending to be settled. In brief, you need just to sit back and let them do the job without hastening intervention.

Receipt of money

After all of the above procedures are fulfilled, you must receive your money from your attorney instantly. As detailed, your attorney should not take much time after he gets the money. Hence, understand that delays in most settlement proceedings occur on the defendant’s side, which you and your attorney will address through proactive measures.