Detailed answer: step-by-step guide to getting paid

Below is a practical, stepwise explanation of how settlement funds normally move from an insurer to you under New Jersey practice. Individual cases vary. If you are represented, your lawyer will be the primary point of contact and will explain the precise process for your case.

1. Who the check is payable to

   The insurance company decides the payee line on the check. Common outcomes:

   • The check is made payable solely to you (the claimant).
   • The check is made payable to you and your attorney (common in represented personal-injury claims).
   • The check names you and other parties (for example, a lienholder, medical provider, or a mortgage holder).

   If multiple payees are named, most banks require all named payees to endorse the check before funds are released.

2. If you have an attorney: trust account deposit and disbursement

   When a lawyer represents you, insurers often issue the check to both you and your lawyer. The lawyer must deposit the check into a client trust account (often an IOLTA) and then disburse funds after handling fees, costs, and any valid liens. New Jersey lawyers follow professional rules that require they safeguard client funds and provide an accounting for distributions. For the applicable New Jersey court rules and rules of professional conduct, see the New Jersey Courts resources: https://www.njcourts.gov/attorneys/rules.html.

3. Paying attorney fees and case expenses

   Your attorney will typically subtract agreed attorney fees and out-of-pocket litigation costs (filing fees, expert fees, medical records fees, etc.) before delivering the net settlement to you. Make sure you receive a written settlement statement that shows gross recovery, each deduction, and the final net amount.

4. Liens, subrogation, and health-insurer reimbursement

   Before you get your net proceeds, third parties may have legal claims to part of the payment. Common examples include:

   • Private health insurers or ERISA plans seeking reimbursement.
   • Medicare or Medicaid conditional payment claims.
   • Medical provider bills and court-ordered liens.

   These claims can reduce your recovery. Your attorney should seek written lien payoff amounts and negotiate or resolve disputed liens where possible. If you are unrepresented and the insurer made the check payable to you and a provider, you will need the provider’s written release or payoff letter before you can clear the check.

5. Checks made payable only to you (no attorney)

   If you are not represented and the insurer issues the check to you alone, the insurer expects you to endorse and deposit it. If the insurer made the check jointly payable to a provider or loan company, you must obtain that third party’s endorsement or release before the bank will permit you to deposit or cash the check. Be careful about endorsing a check to third parties without legal advice.

6. Special situations: minors and incapacitated persons

   Settlements for minors or legally incapacitated people often require additional steps. New Jersey courts or guardians may need to approve a settlement or a guardian must accept funds on behalf of the person. Structured settlements or court-ordered funds management are common tools to protect a minor’s or incapacitated person’s recovery.

7. Timing and bank clearing

   Once the check is properly endorsed and deposited, banks may place holds while the funds clear. Even certified or cashier’s checks can take several business days to fully clear. If you work with a lawyer, lawyers typically wait until the deposit clears before issuing client checks or wire transfers.

8. Final delivery to you

   You will receive proceeds either by check from your attorney, wire transfer, or direct deposit, depending on your written agreement with your lawyer. Always get a written itemized accounting showing gross settlement, all deductions, and the net amount delivered to you.

Red flags to watch for: a check made payable to people other than you without clear documentation explaining why; requests to sign blank endorsement lines; pressure to endorse a check before you get written payoff amounts for liens; or any request to send funds out of the country.

Common scenarios and what they usually mean

Scenario A — You have an attorney and the check is payable to you and your lawyer

The attorney will deposit to a client trust account, pay valid liens and expenses, deduct fees under your fee agreement, and send you the net funds with a written settlement accounting.

Scenario B — The check is payable to you and a medical provider

You must obtain the provider’s endorsement or a written release/payoff letter. Do not sign a full endorsement to a provider without written confirmation of the payoff amount and what remains for you.

Scenario C — The check is payable only to you

You can endorse and deposit it yourself. But confirm whether any insurers (including Medicare/Medicaid) or medical providers will claim reimbursement before you spend the money.

Helpful hints

• Get everything in writing. Request a full written settlement statement that lists gross recovery, attorney fees, costs, lien payoffs, and net proceeds to you.
• Ask for written payoff amounts from any health insurer, ERISA plan, or medical provider before the check is deposited.
• If you have a lawyer, confirm where the funds will be deposited (trust account) and the estimated timing for your net payment.
• Do not endorse or cash a jointly payable check unless you understand who else must sign and why.
• Keep copies of the front and back of any checks and bank deposit receipts.
• Be careful with electronic transfers: confirm wire instructions with your attorney by phone using a known contact number—wire fraud is increasingly common.
• If Medicare or Medicaid may have paid for your care, notify counsel immediately—federal law may require repayment and there are specific procedures to resolve conditional payment claims.
• If you are a minor or legally incapacitated, consult an attorney about court approval or appointing a guardian before accepting funds.