People often ask how much of a settlement they will really keep. The answer depends on the fee percentage, case costs and any liens or medical bills that must be repaid.
The three deductions
- The attorney fee, often a percentage such as one third.
- Case costs advanced by the lawyer.
- Liens and reimbursements, such as health insurer, Medicare or Medicaid repayment and unpaid medical bills.
A hypothetical example
This is an illustration only, not an average. Suppose a case settles for $30,000, the fee is one third ($10,000), case costs are $1,500 and medical liens total $4,000. After those items the client would receive $14,500. A different fee, cost or lien amount would change the result, which is why you should ask for a written settlement statement before you accept.
Ways to improve your net
- Ask whether the fee is calculated before or after costs.
- Ask your lawyer to negotiate medical bills and liens.
- Review the closing statement line by line.
- Understand that some liens are set by law and some can be reduced.
Be careful with advances
Pre-settlement loans and cash advances can carry high costs and reduce what you keep. Read terms closely and ask a lawyer before taking one.
Frequently asked questions
Is the fee taken from the gross settlement?
Depending on the agreement it may be calculated on the gross amount or after costs.
Can liens be reduced?
Often some can be negotiated, though others are fixed by law.