You’ve Received a Personal Injury Settlement Check. How Do You Cash It?
It can take months or years to finish litigating a personal injury case. If you and your legal team win the case, you might receive a personal injury settlement check.
Thanks to the sheer complexity of personal injury cases, receiving your funds isn’t as simple as taking a trip to the bank. Here’s what you need to know about cashing a personal injury settlement check.
What Happens Before You Receive a Personal Injury Settlement Check?
If the court orders the party that injured you to give you a settlement, the money first needs to go through a process before you receive your portion of the funds.
1. Everyone Involved Signs the Release
Before the insurance company writes a check, you need to sign a release. This is a document that states you won’t come after the defendant seeking additional damages. The release still applies even if you have more medical costs down the line.
2. The Insurance Company Writes the Check
Once the insurance company gets a copy of your release, it will issue your check. However, while this sounds like a simple process, it’s prone to delays. Many insurance companies have backlogs of paperwork. If a key employee is out on sick leave or vacation, there might be an additional delay.
3. Your Attorney Deposits the Check in a Trust or Escrow
If you aren’t too familiar with the legal process, you might think the check will simply be mailed to you. However, in order to make sure all the bills associated with your case are paid, the insurance company will send your check to your attorney first.
Once your attorney receives your check, they deposit it in a secure escrow or trust account. The check will need to completely clear before you can take any next steps. The larger the check, the longer it can take to clear — in some cases, it can take up to seven business days.
4. You Pay All Creditors Associated With Your Case
Before sending you your portion of the settlement, your attorney will first make sure that your check goes toward paying the bills you owe. Those bills might include the following:
- Any reimbursements you owe the health insurance company
- Necessary reimbursements to Medicare or Medicaid
- Outstanding medical bills related to your case
- Your attorney’s fees and any court costs
It’s important to realize that if you are behind on child support payments, some of the funds will go toward child support as well.
5. Your Attorney Sends You Your Portion of the Funds
Finally, once your other financial obligations have been fulfilled, your attorney will send you the remainder of the settlement. Typically, it’s paid by mailing a check.
You’ve Received Your Check. What’s Next?
Once your case has been completely resolved, it often takes a month or more for you to receive your check. But once your check arrives in the mail, there’s one more hurdle: you need to cash it.
Cashing your personal injury settlement check is often the simplest part of the process, but you still need to decide which method is best for you.
Method 1: Cashing the Check at Your Bank
If you have an existing bank account, you may find that this is the easiest option for cashing your check. However, it’s important to remember that checks can take some time to clear. Larger settlement checks may take longer, although if you already have a bank account balance greater than the amount of the check, the bank might be willing to cash it immediately.
After a long, arduous legal battle, you undoubtedly have general living expenses and other bills to catch up on. It can be useful to have a general sense of how long it may take for your funds to become available.
- If the check issuer has an account at the same bank, it usually takes up to two business days
- If the check issuer has an account at another bank, it usually takes up to seven business days
In some cases, it may take a little longer than expected for a personal injury settlement check to clear. When you deposit the check, you can always ask your bank when the funds will be available.
Other Useful Things to Know
Before cashing a settlement check (and especially a larger check), your bank might want to take a few security measures. That’s entirely normal and can help protect you and the bank from fraud.
If the writer of the check banks with another institution, your bank might call to verify the legitimacy of the check. The teller also might ask to see two forms of ID and may ask you a few questions about the source of the funds.
Some banks (whether you have an account there or not) will charge you a fee to cash a check. That fee will often range from $5 to $10, although some banks will charge a percentage of the total amount. If you shop around and find a great deal, you can potentially save yourself a good bit of money.
Method 2: Cashing the Check With the Issuing Bank
In some instances, you might decide it’s better to visit the issuing bank to cash your check. Because your check issuer has an account there, the bank can generally release your funds sooner.
It may sometimes cost a little more to cash your check at a bank where you have no account. However, if you’re in urgent need of the funds, it might be a good option.
Method 3: Cashing a Personal Injury Settlement Check Without a Bank Account
But what if you have no bank account? There’s an option for you, too. Cashing a check with no bank account is usually more costly than cashing with a bank. But it does have its advantages — you can usually get your funds in cash right away. Here are some of your options for cashing without a bank account.
Groceries and Convenience Stores
Some grocery and convenience stores (usually larger stores) can cash checks for you. This can be pretty convenient — you can simply cash your check the next time you do a grocery run.
However, there is a potential downside. Many of these places will only cash checks of up to $5,000, so if your check is larger than that, you might need to look elsewhere. In addition, grocery and convenience stores will often charge high fees.
Check-Cashing Operations/Payday Loan Stores
If your personal injury settlement is too large to be cashed at a grocery store or convenience store (and you don’t have a bank account), you might consider taking a look at check-cashing businesses or businesses that primarily offer payday loans.
These establishments can cash your check and give you the funds the same day. However, they tend to be very costly. Many will charge a percentage of the check’s value to cash it. As you can imagine, if you have a sizable check, the fee can be very high. But if you need to access the funds as soon as you can, it may be worth the cost.
A Personal Injury Settlement Check: Your First Step Toward a Better Life
If you’ve recently suffered a devastating injury, it’s easy to feel as though your world is falling apart. Medical bills can add up quickly, and if you’re unable to work, you might even struggle to pay for everyday expenses. When you’re trying to heal from a life-altering injury, all of that stress can start to be too much.
That’s where we come in. At The Joel Bieber Firm, our personal injury attorneys have more than 400 years of combined legal experience. We believe that you shouldn’t have to fight insurance companies alone or pay for another person’s mistakes, and our attorneys are ready and willing to fight tirelessly for you.
Have you recently suffered a major injury thanks to another person’s negligence? If so, please reach out to us to schedule a free consultation. We also offer virtual consultations so you can speak with us without leaving your home or hospital room.