Detailed answer — step-by-step: what typically happens when the insurer issues the check

1. Who is the check payable to?

The first and most important detail is the payee line on the check. Common possibilities:

• Payable to you only: The insurer mails the check directly to you. You can endorse and deposit it into your personal bank account. If you have unpaid medical bills or liens, those may still need to be resolved even if the check is payable only to you.
• Payable to you and your attorney (or to you “c/o” your attorney): Many insurers issue checks payable to both the injured person and their lawyer. When a check names the attorney, the attorney generally must obtain the client’s endorsement and deposit the money into a client-trust (IOLTA) account. The attorney then clears liens, pays costs and fees per your agreement, and issues a final distribution to you.
• Payable to multiple parties or lienholders: If the check includes medical providers, lienholders, or other parties, everyone named on the check typically must endorse it or otherwise agree to distribution before funds clear.

2. If your attorney receives the check: trust account handling and disbursement

Arizona lawyers must safeguard client property and follow rules when holding client funds. In practice:

1. The attorney deposits the joint check into a client trust account (IOLTA) until the funds clear.
2. Attorney deducts contingency fees, court costs, and any agreed costs from the settlement per your fee agreement.
3. The attorney pays valid medical liens, subrogation claims, and other required reimbursements or arranges payoff. Some liens (hospital, provider, or insurer subrogation) require separate resolution.
4. After liens and fees are paid and funds fully clear, the attorney issues you the net balance, usually by check or direct deposit, and provides a written settlement statement showing itemized deductions.

Arizona’s professional conduct rules require lawyers to keep client funds separate and to account for distributions. See the Arizona Courts rules for the Rules of Professional Conduct (for safekeeping client property and trust account obligations): https://www.azcourts.gov/rules.

3. Timing — when will you actually receive money?

Common timing expectations:

• Bank clearing: an attorney typically waits until the insurer’s check fully clears. That can take from several business days up to two weeks depending on the bank and the check amount.
• Liens and payoffs: resolving lienholders can add time. Some medical providers require a buyout or approval before releasing their lien; Medicare/Medicaid or private insurers may require negotiation or formal payoff procedures.
• Complex cases: if multiple lienholders or subrogation claims exist, distribution can take several weeks to a few months.

4. Liens, Medicare, and subrogation issues that affect distribution

If you received medical care, an insurer, Medicare, Medicaid, or a medical provider may assert a lien or demand repayment from your settlement. Important points:

• Medicare has a federal recovery process and may require repayment of conditional payments. You or your attorney should check and resolve Medicare obligations before distribution; see general Medicare recovery information at the Centers for Medicare & Medicaid Services: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Recovery/Conditional-Payments.
• Private health insurers and hospitals may assert liens or seek reimbursement. These claims often require negotiation or formal release before funds are disbursed.
• If lienholders disagree about their share, your attorney may hold funds in trust until you reach resolution or court approval.

5. What paperwork will you sign?

Expect to sign: a settlement agreement or release, and sometimes a conditional endorsement if the check is jointly payable. Your attorney will typically provide a settlement statement (itemized breakdown) showing gross settlement, attorney fees, costs, lien payments, and your net recovery.

6. What if you’re unrepresented?

If you don’t have an attorney, the insurer may send the check directly to you. If lienholders exist, the insurer may still issue payment to you and expect you to resolve liens yourself. If the insurer issued a check payable to both you and a provider, that provider may need to endorse as well. Proceed carefully: signing a full release before resolving liens can leave you personally responsible for unpaid medical bills.

7. Red flags — what to watch for

• An insurer presses you to deposit a joint check without your lawyer present. Avoid endorsing or depositing a joint check until you understand all obligations.
• An attorney refuses to provide a written settlement statement or delays reasonable accounting of funds held in trust.
• Liens or subrogation demands appear after you already received money. Keep copies of the settlement paperwork and ask your attorney to confirm final lien resolution before distribution.

8. Typical examples (hypothetical)

Example A — Check payable to you only: Insurer mails you one check for $10,000 that names you alone. You endorse and deposit it. Later, a hospital says you owe $4,000; because you already spent the money, you may be responsible personally. This is why many people choose an attorney to handle lien resolution before distribution.

Example B — Check payable to you and your attorney: Insurer issues a $50,000 check payable to “Jane Doe and Attorney John Smith.” Attorney Smith obtains Jane’s endorsement, deposits the check in a client trust account, pays $15,000 in medical liens and $13,000 attorney fees and costs, then sends Jane the $22,000 net after the check clears and the lienholders are satisfied.

9. What to ask your attorney

• Will you receive the check or will it be mailed to me?
• Is the check payable jointly? If so, what steps are required to endorse and deposit it?
• Which liens or subrogation claims must be paid from the settlement and how will those be resolved?
• When will I receive a written settlement statement and the net funds?

Helpful hints — practical tips to protect your recovery

• Do not sign a full release or deposit a joint check until you understand lien obligations and have a written settlement statement.
• Keep copies of all correspondence, the check, and the settlement statement for your records.
• If you have Medicare, notify your attorney early so they can obtain a Medicare conditional payment search and resolve obligations before distribution. See Medicare conditional payment info: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Recovery/Conditional-Payments.
• Ask your attorney to provide a written timeline for deposit, clearance, lien payoffs, and final distribution.
• Confirm how you will receive your net proceeds (check, wire transfer, or trust-account check) and make sure you know any required identification or signatures.
• If you do not have an attorney, consider consulting one before cashing a joint check or signing a broad release.
• If you suspect mishandling of client funds, the Arizona Courts maintain lawyer discipline and rules information at: https://www.azcourts.gov/rules; you can also contact the Arizona Department of Insurance for insurer conduct questions: https://insurance.az.gov/.