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How are Personal Injury Settlements Paid Out in Arizona?

man in blue flannel with a bandage on his wrist from a personal injury

Suppose you were to suffer a broken ankle after tripping over a segment of broken sidewalk in front of someone’s business. Naturally, you will need medical treatment, which could be expensive. In addition, you may need to take time off of work to recover. If the owner of the business responsible for maintaining the sidewalk is found to be negligent, you may be able to seek compensation for the expenses incurred due to your injuries. But how long will the case take, and when, exactly, can you expect to receive the funds you need to pay your medical bills? A personal injury case is a legal case in which an individual has allegedly been injured or harmed as a result of someone else’s negligence.

These types of claims can take some time from the initial claim to the disbursement of funds. The duration of a personal injury claim will depend on whether the two parties can reach a settlement privately — for example, through a mediator — or if the lawsuit actually goes to court. An out-of-court settlement is generally concluded quickly, with the parties agreeing on a monetary settlement. If the case goes to court, a settlement may take two or three months. In some cases, however, it could take six months to a year before a final resolution is achieved.

Working with an experienced personal injury attorney like the Antol & Sherman P.C. team is the best way to ensure your case moves forward as quickly as possible. That way, you can be sure you’re receiving the money you need when you need it.

Once a resolution has been reached, it’s time for the settlement payment. It’s not always as straightforward as you might think, however. In today’s article, we’re exploring how personal injury settlements are paid in Arizona and the things you need to know to make the process as painless as possible.

How Personal Injury Settlement Agreements are Paid

In the state of Arizona, you can file a personal injury claim at any time within two years from the date of the accident or injury. In some cases, your injury might not present itself for some time after the accident. In that case, the clock doesn’t start running until you actually discover the injury.

However, the rules are somewhat different when the claim is against the State of Arizona or your local city or county. You have 180 days to file a formal claim in these types of personal injury claims, with a lawsuit within one year. (Ariz. Rev. Stat. Ann. § 12-821 and § 12-821.01.)

The first step to file a personal injury claim is to seek medical treatment for your injuries. Immediately after that, you’ll need to contact a personal injury attorney. Your attorney will notify the other party that a claim has been filed. Once you’ve done that, the process of gathering evidence and building your case begins. You’ll likely also be receiving treatment for your injuries during this time. Therefore, it’s essential to maintain detailed documents every step of the way.

Your personal injury attorney will work to negotiate a claim amount. This can take some back-and-forth. Sometimes both parties reach an agreement without the need to file a lawsuit. In this case, the process of distributing the funds will begin. However, if not, a lawsuit may be filed, and the case will go to court.

How Are Lawyers Paid & How Much?

In the vast majority of personal injury cases, your legal counsel will arrange for a contingency agreement with clients. That means that if the Attorney wins the case, they will receive some percentage of the amount awarded by the court. While this contingency fee varies from one state to the next, a typical fee would be 30% to 40% of the total awarded by the court. So, for instance, if the court were to settle your claim for $20,000, your lawyer would receive 30% of that amount, or $6,000.

The court will usually send the award money check directly to the lawyer. Then, after subtracting any agreed-upon expenses and fees, the lawyer’s office would print a check and deliver it directly to the client.

It’s important to address the question of your attorney’s fees at your initial consultation and ensure that you understand exactly what those fees include and anything that might pop up throughout the process that might need to be billed separately.

Are Personal Injury Settlements Taxable?

In most cases, the law states that personal injury settlements are not taxable, either by the federal government or by your state and local governments. Whether the case is settled out of court or goes to trial makes no difference because the settlement money, in general, cannot be taxed.

The only instance in which you could be taxed on a personal injury settlement is if you receive damages due to a breach of contract. If that breach of contract actually caused your injury and your claim is based on that breach, you can be taxed on the amount awarded.

One other possibility where your law firm would be unable to avoid taxation on your settlement is if an award gets extended beyond the expected settlement date and begins earning interest. That earned interest could then become taxable.

How is Money Distributed When Settling a Personal Injury Claim?

First of all, the lawyer’s contingency fee will be deducted from any award money the plaintiff receives. Then it will be necessary to pay all medical bills from the award money, or at least that portion of the medical expense not covered by health insurance.

Finally, if necessary, the medical facility can place a lien on the award money until they receive fair compensation for the services they rendered.

When all fees have been distributed to parties with a legitimate claim on the award money, the plaintiff or injured party will be entitled to the remainder. How you receive these remaining funds is your choice. Many choose a lump sum, meaning the remaining amount is distributed in a single payment.

Still, others choose a structured settlement, which disburses the remaining funds at set intervals. This option you choose will depend on your situation. For example, if you expect to require medical treatment for an extended period or if you’re concerned about spending your entire claim at once, this could be a great option for you.

How Much Can I Ask for in a Personal Injury Case?

The amount of money you can ask for after being involved in a personal injury accident will depend on several factors. First and foremost, the nature of your injuries and the extent of those injuries must be taken into account. Additionally, the fees associated with filing a claim will also need to be considered. This includes court fees, the cost to hire an attorney, and other fees depending on your situation.

The amount of the settlement that you actually receive depends on various factors as well. One critical factor is the comparative negligence law. Suppose you cannot prove that the defendant was entirely responsible for the accident because you may have been partly to blame yourself. In a situation like this, the court would rule on your percentage of the blame and only require the defendant to pay the amount corresponding to their percentage of blame, as determined by the court.

For example, if the proceedings determine that you were 25% responsible for your injuries, the defendant would only be obliged to pay 75% of the asking amount for your claim. If there were credible witnesses at the scene, and they are willing to testify on your behalf, that would also be an important factor that would play into the total amount you can reasonably expect to receive.

How Do Insurance Companies Determine Settlement Amounts?

In many cases, insurance companies are involved in the settlement process, and they play a significant role in determining the settlement amount. This is especially true in the case of a car accident or an injury that took place at a place of business.

If there was an insurance policy involved that might cover some of the losses, such as in an automobile accident, the terms and provisions of that insurance policy would be considered to come up with a final award amount. In addition, the insurance company would also consider liability — where the fault lies in the accident — as well as the damages caused.

Do I Need A Personal Injury Attorney?

When you’re injured in the state of Arizona as the result of someone else’s negligence, you could be entitled to compensation. With the help of a personal injury attorney, you and the other party might agree to a settlement amount out of court to avoid the lengthy process of a lawsuit.

However, if that is not possible, a settlement could take much longer to be reached. With the help of an attorney, this process doesn’t have to be a painful one. Your personal injury attorney should be able to guide you through the process, allowing you to focus on your number one priority — healing from your injuries.

At Antol & Sherman, P.C., we’re dedicated to fighting for your right to the compensation you need to heal from an accident. From car and bike accidents to slip and fall accidents, our experienced team is ready to help guide you every step of the way. If you’ve been injured as a result of someone’s negligence, it’s essential to begin the process of seeking compensation as quickly as possible. Get in touch with us for a free consultation today.