Your personal injury lawyer comes to you with good news -- they tell you that the insurance company has officially signed off on your settlement. Now you might want to ask your personal injury attorney what happens next. This article answers that question by looking at four things that commonly have to be dealt with after a settlement or a judgment has been achieved.
The very first thing that has to be done is for both sides to sign off on the paperwork. In a settlement, this usually involves an agreement that the matter is final. That means you will never pursue a claim again based on the specific incident that led to your injuries. Some defendants may also include boilerplate statements noting that the settlement does not constitute an admission of wrongdoing.
The Actual Payment
A printed check is the standard form of payment in injury cases. If the case is large enough, the defendant and the claimant might decide to arrange a payment plan to spread out the financial challenge of paying it. This is especially wise if paying the full amount risks pushing a defendant into bankruptcy.
Paying Medical Bills
You and your personal injury attorney have probably worked with doctors, hospitals, and other medical professionals and organizations to keep bill collection at bay. The time has come to pay up. In some states, medical organizations even have the right to place a lien on injury settlements.
Bear in mind you have the right to demand an itemized bill before you pay. Many organizations lard up their bills with fees. For example, it's common to tack on fees for the production of the medical records you used to present your injury claim. It's prudent to review these fees, and you can challenge them if necessary. Notably, that may mean going back to court for a new fight.
Generally, the physical injury and ailments part of a settlement are not taxed. However, non-physical injuries, such as emotional distress and defamation, are taxable. The same goes for punitive damages, and accrued interest attached to a settlement is also taxed. Compensation for lost wages and loss of future earning potential are also considered reportable and will be taxed.
For tax purposes, it's essential that a settlement or judgment includes a breakdown of what amounts covered particular forms of damages. If not, you may end up with a tax court judge making the decision for you.
Reach out to legal professionals like those at Drivon Turner & Waters PLC for more information.