In Texas, once a personal injury settlement is reached, you may wonder how long your attorney can legally hold settlement checks before disbursing them to you. At Amanda Demanda Injury Lawyers, our dedicated personal injury services in Texas begin with a free consultation. During this consultation, our attorneys will explain the settlement check duration and address all your questions and concerns.
The Settlement Check Delivery Process in Texas
Once a settlement agreement is reached between the injured party (plaintiff) and the at-fault party (defendant), several steps must occur as part of the personal injury lawyer settlement timeline:
Settlement Agreement Finalization
Both parties must sign a formal settlement agreement, which outlines the terms of the settlement. This document is legally binding and may take several days to finalize.
Insurance Company Processing
If the settlement involves an insurance company, the insurer typically issues the check. In Texas, most insurers disburse settlement funds within 30 days of receiving the signed release agreement, as required by law.
Settlement Check Delivery
The settlement check is usually made payable to both the client and the attorney. It’s sent to the attorney’s office to ensure compliance with all legal and financial obligations before the client receives their portion.
Depositing into a Trust Account
Upon receiving the settlement check, the attorney must deposit it into a client trust account (also known as an Interest on Lawyers’ Trust Account or IOLTA). This ensures the funds are handled securely and ethically.
How Long Can a Lawyer Hold the Settlement Check in Texas?
Texas law does not explicitly state a maximum duration for holding settlement checks, but ethical obligations outlined by the State Bar of Texas mandate that attorneys must disburse client funds “promptly” once all legal and financial obligations are resolved. Generally, settlement checks are held for a short period—usually five to 10 business days—to allow the funds to clear in the trust account.
However, certain factors may cause a lawyer delay in settlement check delivery:
Lien and Debt Resolutions
If you owe medical liens, child support, or other debts, your attorney is legally required to pay these obligations before distributing the remaining funds to you. Negotiating lien reductions or confirming the amounts owed can add days or weeks to the process.
Attorney Fees and Costs
Your attorney will deduct their agreed-upon contingency fees and any case-related expenses (e.g., court filing fees, expert witness costs) from the settlement amount. Calculating and verifying these costs may take additional time.
Client Communication Delays
In some cases, attorneys may need final authorization from the client to disburse funds. Any delays in communication can extend the process.
Disputes Over Allocation
If there are disputes regarding how the settlement should be distributed (e.g., disagreements between co-plaintiffs or creditors), the attorney may hold the funds until the dispute is resolved.
Steps to Take in Case of a Delay in Settlement Check Release
While some delays are inevitable, attorneys must act in their client’s best interest and avoid unreasonable hold times. If you believe your attorney is unnecessarily withholding your settlement funds, Texas law provides remedies:
- Request an Explanation: You can formally request a detailed breakdown of why the funds are being held and the steps being taken to resolve any outstanding issues.
- File a Complaint: If you suspect your attorney is violating ethical obligations, you can file a grievance with the State Bar of Texas.
- Seek Legal Recourse: If the delay is unreasonable and results in financial harm, you may have grounds for a malpractice claim against the attorney.
Potential Penalties in Texas for Delayed Payment by Insurance Companies
If an insurance company is responsible for the delay in issuing the settlement check, Texas law imposes strict penalties. Under the Texas Prompt Payment of Claims Act (Texas Insurance Code §542), insurers must pay valid claims within a specific timeline or face interest penalties and potential liability for attorney fees. This law helps protect plaintiffs from undue financial burdens caused by delays.
Common Misconceptions About Settlement Timelines in Texas
- “I’ll receive the check as soon as the case settles”: While a settlement resolves the case, the process of issuing, depositing, and disbursing the funds takes additional time due to procedural and legal requirements.
- “Attorneys hold funds unnecessarily”: Attorneys are legally and ethically bound to address all liens, fees, and obligations before disbursing settlement funds. Delays are typically caused by these requirements, not by negligence.
Get Strong Legal Representation from Our Experienced Personal Injury Attorneys
At Amanda Demanda Injury Lawyers, we understand how critical your settlement funds are to your recovery and financial stability. With a proven record of recovering millions of dollars in settlements for our clients, we’re strongly positioned to hold the negligent parties accountable for the largest possible compensation you’re owed. To schedule your free consultation, call us 24/7 or contact us through our form.
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