Common Reasons for Delays in Receiving Your Settlement Check

Receiving a check for a settlement of a legal matter or insurance claim can be the final solution to a problem. However, successful claimants sometimes have to wait for longer periods than expected before receiving the money. It is important to familiarize yourself with reasons that sometimes lead to delays in order to avoid them.

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1. Incomplete Paperwork

Incomplete or inaccurate paperwork is one of the reasons that frequently leads to the delay of settlement checks. The paperwork necessary for the settlement process, such as agreements, releases, or instructions for a payment, sometimes calls for accurate detail.

Incomplete signatures, incorrect addresses, or inaccuracies in bank statements might bring the entire process to a standstill. The slightest discrepancy might cause the insurance company to send back the paperwork, which increases the waiting time.

2. Approval from Insurance Companies

The insurance companies are key stakeholders in almost all settlements. They often have internal assessment procedures that might take weeks and even months. Prior to cashing out a check, the insurance companies have to:

Validate the claims
Confirm coverage
Apply guidelines set by the insurance cover.

Where large claims are involved, especially involving multiple parties, the process takes longer.

3. Subrogation Claims

A claim of subrogation will also delay the settlement check. This is because healthcare providers, government programs, or previous carriers may have a rightful claim to reimbursement from the settlement amount.

Other involved parties have to be notified of the settlement amount. If they have a rightful claim, then the amount has to be adjusted for these claims. It might take a while to sort this out, especially when negotiations are involved to assess the amount owed.

4. Noteworthy Medical Bills

Personal injury cases also rely on full documentation of medical treatment and expenses. In cases where the medical bills, treatment, or expert reports are not available, the check may be held back until all the paperwork is submitted. This is because the insurance agencies would want all the medical expenses verified.

5. Delays in Court Approvals

Some settlements, in particular those involving minors or structured settlements, need court approval. The judges have to sanction the terms of the settlement to ensure they are reasonable and within the periphery of applicable laws.

Times of scheduling and processing within the court system can take a number of weeks to even months, based on court workload and procedural requirements. The check for the settlement cannot be issued until it has been approved by the court.

6. Party Disputes

The most minor disagreements can lead to delays while parties negotiate or seek resolution through formal channels. Issues such as disagreements between claimants, defendants, insurers, or attorneys can also delay payment. This may involve disputes over:

Settlement amounts
Allocation of funds
Responsibility for specific bills
Errors in calculations

Settlements routinely include calculations for medical expenses, lost wages, pain and suffering, and attorney fees. Errors in these calculations, such as incorrect deductions or miscalculations regarding applied percentages, need to be corrected before a check is issued.

7. Administrative Backlog

The amount of work involved by lawyers and administrative personnel can also cause delays in releasing the funds. If a law firm has settled more than a few cases, there may be internal delays due to the preparation of checks.

Mistakes or backlogs in preparing documents, obtaining signatures, or coordinating with insurance companies all lengthen the wait.