How long a settlement check takes after you sign the release Thirty days for the check. Then the liens.

Once the carrier, meaning the insurance company, has your signed release, California's Fair Claims Settlement Practices Regulations require it to tender payment immediately and in no event more than 30 calendar days later. To tender payment means to send it. The check is usually made payable to you and your lawyer together, and it goes into the firm's client trust account, a separate bank account that holds client money and never the firm's own. It has to clear, the liens have to be resolved, and a written settlement statement has to account for every dollar before anything is disbursed, and the liens are the step that takes the time.

What happens after you sign the release

Attorney fees are a separate subject, and our post on how contingency fees work covers them line by line. What follows is the timing between the signature and the money, the rules that set it, and where the delays come from.

A release is the contract that ends the claim: you give up the right to ask for anything more arising out of the incident, and the carrier pays the agreed amount. A lien is a legal claim against your recovery held by someone who paid for your treatment. A disbursement is the payment out of trust to you and to everyone else entitled to part of the money.

1. 1
   The release is executed and returned

   Signed, often notarized, and sent back with the payee information the carrier needs. Every claimant and every carrier has to sign off, so a case with two defendants moves at the speed of the slower one.

2. 2
   The carrier issues the draft

   A draft is the settlement check. Section 2695.7(h) sets 30 calendar days from acceptance and receipt of a properly executed release, subject to the exceptions the regulation states.

3. 3
   The check is deposited into the client trust account

   State Bar Rule 1.15(a) requires it. The firm tells you it arrived, and the rule puts an outside limit of 14 days on that notice absent good cause.

4. 4
   The deposit clears

   A law firm cannot pay out against money the bank has not collected. We do not disburse on an uncleared deposit.

5. 5
   The liens and balances are resolved

   Health plan, hospital, Medi-Cal, Medicare, and any medical provider treating on a lien. This is the step that takes longest, and the one where your net figure is still moving.

6. 6
   The settlement statement is prepared and signed

   One page that lists the gross recovery, the fee, each cost, each lien and what it was reduced to, and the number payable to you.

7. 7
   Disbursement

   Checks go out to you, to the providers and lienholders, and to the firm, from the same trust account, on the same day.

How long the insurer has to pay

The Fair Claims Settlement Practices Regulations are the claim handling standards the California Department of Insurance enforces, and the department indexes them on its regulations page. Two subsections of section 2695.7 set the timing that matters here. Subsection (b) requires an insurer, upon receiving proof of claim, to accept or deny the claim in whole or in part immediately and in no event more than 40 calendar days later. Subsection (h) requires that upon acceptance and, when necessary, upon receipt of a properly executed release, the insurer tender payment immediately and in no event more than 30 calendar days later. The exceptions are stated in the subsection itself.

That is the whole of the insurer's obligation on timing. No rule says the money reaches your bank account 30 days after you sign, because the 30 days runs to the tender of payment, not to the end of everything that has to happen after it.

Why the money sits in trust

A settlement check is not the firm's money and it is not paid to the firm. Rule of Professional Conduct 1.15, published by the State Bar of California, requires that all funds received or held for the benefit of a client be deposited in one or more identifiable bank accounts labeled Trust Account, maintained in California. The rule then sets out what the lawyer owes you while the money is there.

Two of those deserve a second look. Rule 1.15(c)(2) says that where a client disputes the lawyer's right to a portion of trust funds, the disputed portion stays in the account until the dispute is finally resolved. A disputed lien is handled the same way: the argued amount stays behind and everything else is paid. Rule 1.15(g) defines undisputed funds as funds where the ownership interest has become fixed and there are no unresolved disputes about entitlement. That definition is the reason a lien fight can hold up part of a settlement without holding up all of it.

Why repaying your health plan takes longest

Every payer who touched your treatment has to be answered before the file can close, and each one runs on its own track. A health plan lien is capped by Civil Code section 3040 and then reduced again for fees and costs, which our post on what a Kaiser lien means for your settlement works through with the arithmetic. The two government programs, Medicare and Medi-Cal, are procedural rather than arithmetical, and they are the ones that set the calendar.

The Centers for Medicare and Medicaid Services describes the sequence on its recovery process page. A pending liability case must be reported, the Conditional Payment Letter carries Medicare's recovery contractor's best estimate of what Medicare should be reimbursed, a response to a Conditional Payment Notification is due in 30 calendar days, and interest runs from the date of the demand letter if the debt is not paid. Welfare and Institutions Code section 14124.73 requires written notice of the action or claim within 30 calendar days of filing. The Department of Health Care Services describes its Personal Injury Program as required by federal and state law to recover funds for services Medi-Cal paid.

Neither process moves faster because a client needs the money, but both move faster when the lien file is opened early. We open it when the case is filed rather than when it settles, so the ledgers, the itemizations, and the reduction requests are already in hand when the release goes back.

How to read the settlement statement

The written accounting required by Rule 1.15(d)(4) is the document clients remember, and it should be short enough to check. It lists the gross recovery, the attorney fee calculated the way your agreement says it is calculated, every case cost itemized, every lien and medical balance with the amount claimed next to the amount paid, and the net figure payable to you.

Read the liens first. That is where the last real money in a case is made or lost: a statement that shows a $40,000 medical lien resolved for $18,000 is telling you what the last month of work was worth. If a line is unclear, ask before you sign. Keep your copy; the firm's own records of the account run five years.

When your check takes longer

• The injured person is a minor. Code of Civil Procedure section 372 gives a guardian ad litem, the adult who acts for the child in the case, power to compromise the claim, meaning settle it, only with the approval of the court in which the action is pending, so a hearing goes on the calendar before anyone is paid.
• Medicare paid for any of the treatment. The conditional payment process has its own letters and its own response windows, and a final number often arrives after the settlement does.
• There is more than one defendant. Every carrier issues its own draft on its own schedule, and a release that one insurer wants rewritten holds up that insurer's payment and no one else's.
• A lien is disputed. Under Rule 1.15(c)(2) the disputed portion stays in trust until it is resolved. Ask for the undisputed remainder to be disbursed rather than waiting on the whole file.
• The settlement is structured. A structured settlement is paid over time through an annuity rather than in one check, which changes both the timing and the paperwork. It is agreed before the release is signed, never after.

How long until the check arrives

Thirty days for the carrier to tender payment after it has your signed release, a few days for the deposit to clear, and then as long as the liens take. The liens are the only part that really varies. What decides your net is how early the lien file was opened, how hard each lien was negotiated, and what each one was reduced to by the end.

If you are waiting right now, ask your lawyer for three things in writing: the date the executed release was delivered, the current status of each lien, and a draft settlement statement. Any firm can produce those in a day. Our frequently asked questions page covers the rest of the process, our guide on how to maximize a settlement covers what happens before this point, and there is no fee unless we recover.