How Much Of Your Accident Award Will You Keep?
December 7, 2021
An accident victim should understand the claim process from the demand letter to the settlement or award stage. For example, you should know that you would use part of your award to settle obligatory expenses. Say you win a million
dollars in an auto accident lawsuit. You will only pocket part of the money that remains after you settle all mandatory expenses.
Below are some of the expenses that determine how much you get to keep after your settlement.
Legal Fee
Most personal injury lawyers charge contingency fees, which means you only pay if you win a settlement. The contingency fee is typically a percentage of the settlement or judgment award. You agree with the lawyer on the percentage
before they begin to work on your case. A common contingency fee percentage is often a third of the awarded settlement or judgment.
Case Expenses
Your injury settlement also pays for the case expenses. When a lawyer agrees to handle your case on a contingency, they also agree to cover the case's expenses to completion. The lawyer then deducts the expenses from the settlement
money. That is why lawyers only invest in cases in which they believe will win.
Case expenses, which are different from legal fees, may include things like:
- Court filing fees
- Investigation fees
- Communication fees
- Document production fees
- Expert witness fees
- Transportation expenses
- Accommodation exposes
In short, expect to pay for every justifiable expense the lawyer spent to win your case.
Settlement Liens
Settlement liens are financial claims that third parties might have on your settlement money. Third parties often place liens on settlement awards to recover their debts. Liens almost always have the full approval of the court. Once your case settles, the lienholder gets their money first, and you get the rest.
Below are some of the liens you might have to pay when you settle or win your case.
Health Insurance Liens
Some health insurance policies have liens in their terms and conditions. The lien clause allows the insurance company to recover the money they might use for your accident treatment if you win your case. Say an insurer used $25,000
for your treatment after an auto accident. The insurer might recover all or some of the money once you win your case.
Medicare or Medicaid Liens
Just like medical insurance companies, Medicaid and Medicare also have the right to recover their payments after you win your case. In fact, the government can pursue the case and recover their money, even if you give up before the case's conclusion.
Auto Insurance Liens
Some auto insurance policies include payments for medical treatments after an accident. In such a case, the insurance company reserves the right to recover their money from your settlement if you win.
Taxes
Some parts of your settlement award may be taxable, while others are not. For example, the portion of your settlement that covers physical injuries or sicknesses is not taxable. However, the following parts of the settlement might be taxable:
- Interests on your settlement, for example, if your case took a long time to conclude
- Punitive damages
- Pain and suffering damages that exceed your medical costs
Your lawyer will help you compute which parts of your settlement are taxable.
The best way to receive as much money as possible is to maximize your award and minimize your expenses. Schonberg Law Offices can help you with both objectives.
Contact us
for a free initial consultation of your accident case. We will be happy to discuss all of your questions and concerns. Let us know how we can assist you in your legal needs.
Get expert advice from Schonberg Law Offices in Middletown, NY. Contact a personal injury attorney today to ensure you get the compensation you deserve.
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