Tennessee is one of the most beautiful states in the United States. If you have been injured in an accident, you can file a claim here. You may be wondering: When will I actually receive the compensation?
While reaching a settlement is a significant step toward financial recovery, there are still several legal and administrative tasks that must be completed before the check is in your hands. Many people assume that money is available immediately after the case settles, but that is not the case.
Understanding the process of a settlement check is the best method to prevent yourself from becoming frustrated and to keep your expectations in line. You may need to sign a release form and await insurance processing. The settlement check process ensures that all obligations are met before you get your portion. Good advice and a good timeline allow you to go through this process smoothly and plan for your financial future.
This guide walks you through each stage, step by step, so you will know what to expect once you have resolved a personal injury claim in Tennessee.
Step 1: Settle the Claim or Win the Case
The first is reaching a settlement, either by settling with the insurance company or winning your case in court. This can happen at any time during the legal process, but once the amount is settled, both sides enter into a settlement agreement. It is advisable to have an attorney ensure the settlement covers your current and future damages before agreeing to it.
Step 2: Sign the Settlement Release Form
To proceed, you’ll need to sign a document referred to as a release of liability. You’re promising not to file any additional claims against the defendant for the same accident when you sign the document. Your lawyer should review this document thoroughly to make sure there are no concealed or unfair terms or conditions.
Step 3: Insurance Company Processes the Payment
Under Tennessee law, once the insurer receives the signed release, the insurance company usually takes 30 days to mail your check. However, it might be faster depending on the firm and the nature of the claim. If there’s a payment delay, your attorney can telephone the insurer and obtain compliance and prevent unnecessary delays.
Step 4: Attorney Deposits the Check into a Trust Account
Once received, your settlement check is deposited into your attorney’s trust or escrow account to allow the funds to clear. This step ensures the funds are valid and available before any money is disbursed. Clearing may take 3 to 10 business days, depending on the bank and check amount.
Step 5: Pay Off Medical Liens and Legal Fees
Before you receive your portion, your attorney must settle outstanding medical bills, health insurance liens, or government reimbursements like Medicaid or Medicare. They will also deduct legal fees and court-related expenses based on your signed agreement. You’ll be provided with a detailed, itemized statement showing exactly where every dollar went.
Step 6: Receive Your Final Settlement Check
After all obligations are handled, you’ll receive your final disbursement, the net amount that belongs to you. This check can be mailed, picked up, or directly deposited, depending on what you arrange with your attorney. Be sure to deposit or cash it promptly, and consider speaking with a financial advisor about managing your funds.
Step 7: Discuss Tax Implications (If Any)
Most personal injury settlements for physical injuries or illnesses are not taxable under federal and Tennessee state law. However, if a portion of the settlement covers lost wages, emotional distress (without physical injury), or punitive damages, that portion could be taxed. Your attorney or a tax advisor can help you understand what, if anything, needs to be reported to the IRS.