Reaching a settlement in a personal injury case is a major milestone. It means the hard work of investigating the claim, negotiating with the insurance company, and advocating for fair compensation has paid off. Once a case settles, however, there is still one important final step: the settlement accounting and disbursement phase.
This phase ensures that everything has been handled properly before a settlement check is issued. While clients are understandably eager to receive their funds, this process exists to protect them and provide peace of mind moving forward.
What Is the Settlement Disbursement Phase?
The settlement disbursement phase begins after a case has officially resolved. At this point, the insurance company has agreed to pay a specific settlement amount, and the legal work shifts to finalizing the financial details of the case.
This phase focuses on documenting payments, resolving outstanding obligations, and preparing a complete settlement package for the client. While it may feel like the case should be over immediately, this step is critical to ensure there are no unresolved issues after the settlement check is delivered.
Finalizing and Paying Medical Bills
One of the most important parts of the settlement disbursement phase is addressing outstanding medical bills.
Throughout a personal injury case, medical providers often treat patients with the understanding that payment will come from the eventual settlement. Once a case resolves, those providers must be paid before funds are released to the client.
During this phase, the legal team carefully reviews all medical charges related to the case and contacts each provider directly. This process involves:
Confirming final balances
Verifying that no duplicate or incorrect charges exist
Issuing payment to medical providers
Obtaining documentation showing the bills were paid
This step is essential to prevent medical providers from later seeking payment from the client after the case is closed.
What’s Included in Your Settlement Package
When the settlement disbursement process is complete, clients are scheduled for an appointment to receive their settlement package and check.
The settlement package typically includes:
A detailed settlement accounting
Copies of checks issued to medical providers
Correspondence sent to providers
Documentation showing how settlement funds were distributed
This transparency allows clients to review exactly where settlement funds went and ensures everything has been handled correctly. It also provides records clients can keep for future reference.
Peace of Mind After Settlement
One of the primary goals of the settlement disbursement phase is to provide peace of mind. By the time a client receives their settlement check, all known obligations related to the case should already be resolved.
This means:
Medical bills have been addressed
Providers have been paid
Documentation is complete
No unexpected financial issues should arise later
Taking the time to carefully complete this phase helps ensure the settlement truly represents closure, not the beginning of new problems.
Tax Considerations After a Settlement
Another common question during this phase involves tax implications.
In most cases, personal injury settlements are not taxable, which is welcome news for many clients. However, tax situations can vary depending on individual circumstances.
Because settlement funds are often received in a single calendar year, clients are encouraged to work with a qualified tax professional when filing their taxes. This ensures everything is reported correctly and avoids potential issues down the road.
What If There Are Additional Claims?
In some cases, a settlement does not fully conclude all possible claims.
For example, if a case involved a motor vehicle accident and the settlement represented the at-fault driver’s policy limits, there may still be underinsured motorist (UIM) coverage available. When this happens, the case may continue into another phase while additional claims are pursued.
Clients are guided through this process step by step so they understand what remains open and what has already been resolved.
Staying Connected After Your Case Closes
Even after a settlement check is issued and a case is closed, clients are encouraged to stay in touch. Questions may arise later, documents may need clarification, or new issues may come up.
The end of a case does not mean the end of the relationship. Ongoing communication ensures clients continue to feel supported long after the legal process is complete.
What the Settlement Disbursement Phase Means for Injury Victims
If you’ve been injured in an accident and have questions about the settlement process — or if you’re unsure where your case stands — speaking with an experienced personal injury attorney can make all the difference. At McMullin Injury Law, we guide our clients through every phase of their case, from the initial claim to final settlement and beyond.
Have questions about your injury case? Contact us today for a free consultation. We’re here to help you move forward with confidence.