After your personal injury case settles, you’re probably eager to receive your money as quickly as possible.
If you’re wondering whether your settlement can be direct deposited instead of arriving as a paper check, the answer is maybe, but it depends on how your attorney handles settlement distributions. Attorneys are not required to offer a direct deposit service, but many do have this in place. Below, you’ll learn when direct deposit is available, how to request it, and where you can turn if you need cash before your settlement arrives.
Key Takeaways
- You may be able to receive your settlement funds by direct deposit, but it depends on your attorney’s payment policies.[1]
- Direct deposit is often faster than receiving a paper check because you don’t have to wait for mail delivery and the bank typically won’t place a hold on it.[2]
- Providing accurate bank account information early can help prevent delays.
- Settlement payouts can still take time because of paperwork, lien resolution, and bank processing.[3]
- If your attorney doesn’t offer direct deposit, you can deposit or cash a paper settlement check through a financial institution.
- If your lawsuit is still pending and you need money now, post-settlement funding may be a good option for you.
Understanding the Settlement Check Payout Process
When you settle your personal injury case or receive a court award, you usually won’t receive your share of the money right away. Instead, the defendant or their insurance company sends the settlement funds to your attorney. Your lawyer will deposit the money into a client trust account and wait for it to clear.[4] How long a settlement check takes to clear depends on the insurance company, case complexity, and bank efficiency.[3]
Once the check clears, your attorney will pay legal fees and resolve any valid liens or outstanding obligations, for example medical care you received under a letter of protection.
Then they’ll provide you with a settlement statement showing what deductions were made. You’ll sign off on the statement, and your attorney will send you the remaining balance of your funds.[4]
The time it takes for the funds to become available to you depends on factors such as paperwork, lien negotiations, and bank processing times.[3] Requesting a direct deposit of your settlement check could make the money accessible sooner.[2]
Can a Settlement Check Be Direct Deposited?
- Your attorney offers direct deposit, the settlement funds have cleared, and all required deductions have been made.
- You provide your bank account information before your attorney distributes your settlement proceeds.
- Your bank accepts the direct deposit and credits the funds to your account according to its processing policies.
How to Request Direct Deposit for a Settlement Check
If you want to receive your settlement through direct deposit, talk to your attorney as soon as you know that’s your preference. Asking early gives your attorney time to explain your options and collect the information they need. To help the process go smoothly:[1]
- Confirm your attorney offers direct deposit for settlement proceeds.
- Provide your bank’s routing number and your account number.
- Verify that your banking information is accurate before your attorney initiates the transfer.
- Confirm when you can expect the funds to arrive after your attorney sends the payment.
When and Why Direct Deposit Might Not Be an Option
Although some people can receive settlement funds through direct deposit, it isn’t available in every case. You may not be able to direct deposit a settlement check if:
- Your attorney’s law firm doesn’t offer direct deposit (some only issue paper checks)
- You don’t have a bank account
- You don’t provide your banking information in time
- The information you provide is incorrect
If there’s a mismatch in the information you provide, you may be able to try again, but it will cause delays.[1] Your attorney can explain what you need to do before your settlement is ready for distribution.
How to Get Settlement Funds Without Direct Deposit
If direct deposit isn’t an option, your attorney will likely provide you with a paper check. That will leave you wondering, “Where can I cash a settlement check?” Depending on your situation, you may be able to:[5]
- Deposit the check into your checking or savings account.
- Cash the check at the issuing bank, if it offers that service to non-customers.
- Use a check-cashing business or participating retailer, although these services often charge fees and may have limits on large checks.
Need Access to Cash Now?
Even if your case has settled, you may still have to wait before the money reaches your bank account. Your attorney may need to resolve liens, finalize paperwork, or wait for the settlement funds to clear before distributing your share.
If you have bills due today, you might not have the time to wait for your settlement check to arrive.
That’s where post-settlement funding may help.
Post-settlement funding is a cash advance issued to you based on a percentage of your expected settlement amount.
With USClaims, qualifying plaintiffs can receive post-settlement funds in as little as 24 business hours.* Other benefits include:
- No credit check: Approval is based on the strength of your case, not your credit history.
- No monthly payments: Your attorney will repay us in one lump sum once your settlement clears.
- Use the funds however you need: Unlike other types of financial products, there are no restrictions on how you use the money.
If you’re ready to explore your options, apply now or call us today at 1-877-USCLAIMS to learn more.
Can a Settlement Check Be Direct Deposited? FAQs
Can a settlement check be direct deposited instead of mailed to recipients?
Yes, in some cases, settlement funds can be sent by direct deposit instead of a paper check. Whether that option is available depends on your attorney’s procedures, so it’s best to confirm with them.
Who can authorize direct deposit for a settlement payment?
In most personal injury cases, your attorney controls how your share of the settlement is distributed after the funds arrive in the client trust account. If the law firm offers direct deposit, your attorney or the firm’s accounting staff can arrange the electronic transfer after all required deductions have been made.
What bank details and documentation are required to set up direct deposit for settlement funds?
How long does it typically take for a settlement direct deposit to clear and become available?
Once your attorney initiates the transfer, direct deposits often arrive within one to three business days, although the exact timing depends on your bank’s processing policies. Before that happens, your attorney must receive the settlement funds, deposit them into a client trust account, resolve any liens, pay fees and costs, and complete the settlement distribution process. Those steps often take longer than the electronic transfer itself.[4]
What steps can be taken if a payer refuses to offer direct deposit for a settlement?
If direct deposit isn’t available, ask whether your attorney can issue a paper check instead and how long that process will take. Once you receive the check, you can usually deposit it into your bank account or cash it at a financial institution. If you need money sooner, post-settlement funding can help bridge the gap.
Sources
- [1] Mattiacci Law, “Can A Settlement Check Be Direct Deposited?,” https://jminjurylawyer.com/personal-injury/can-a-settlement-check-be-direct-deposited/
- [2] Consumer Financial Protection Bureau, “If I get paid through direct deposit, when can I withdraw the funds?,”https://www.consumerfinance.gov/ask-cfpb/if-i-get-paid-through-direct-deposit-when-can-i-withdraw-the-funds-en-1025/
- [3] ADR Times. “How Long to Get Settlement Check After Signing Release.”https://adrtimes.com/how-long-to-get-settlement-check-after-signing-release/
- [4] LegalClarity. “How Long Can an Attorney Hold Your Settlement Check?”https://legalclarity.org/how-long-can-an-attorney-hold-your-settlement-check/
- [5] Armada Law, “Where Can I Cash My Settlement Check?,”https://www.armadalaw.com/blog/where-can-i-cash-my-settlement-check/
Disclaimer: Throughout this website, the term “loan” may be used for convenience to describe pre-settlement funding. However, such transactions are not loans in the legal sense. Repayment is strictly contingent upon the successful resolution of your case. If your case is unsuccessful, no repayment is required. Common terms like “lawsuit loan” are used colloquially but misrepresent the non-recourse nature of pre-settlement funding.
