How long can a lawyer hold your settlement check?

The rule is “promptly,” not a number of days

Every state has its own rules of professional conduct for lawyers, and most are based on the American Bar Association’s Model Rules. Model Rule 1.15(d) says that when a lawyer receives funds in which a client has an interest, the lawyer “shall promptly notify the client,” shall promptly deliver the funds the client is entitled to receive, and, on request, “shall promptly render a full accounting.” It doesn’t say how many days “promptly” means — that depends on the circumstances, and your state’s version of the rule controls.

While it waits, the money belongs in a client trust account, separate from the lawyer’s own funds, with complete records of what came in and went out.

What your lawyer can hold back — and what they can’t

• Liens and other third-party claims. The ABA’s commentary gives the example of a creditor with a lien on funds recovered in a personal injury case. When that claim isn’t frivolous, the lawyer must refuse to hand over the disputed money until the claim is resolved — and may ask a court to decide who is entitled to it.
• A disputed fee. If you and your lawyer disagree about the fee, only the disputed amount stays in the trust account. The undisputed portion must be paid promptly, and a lawyer “may not hold funds to coerce a client” into accepting the lawyer’s position.
• Everything else should move. Under Rule 1.15(e), the lawyer must promptly distribute all portions that aren’t in dispute.

The steps between “we settled” and your check

Most of the waiting happens at a few predictable points. Use this to find out where your money is:

1. 1You sign the release

   What happens

   You agree to the settlement and sign the insurer’s release of your claims.

   Can hold it up

   Back-and-forth over the release wording; some settlements, such as those for minors, may need a judge’s approval.

   Ask

   Has the signed release been sent to the insurer, and on what date?

2. 2The insurer pays your lawyer

   What happens

   The insurer sends the settlement payment to your lawyer, often made out to you and your lawyer together.

   Can hold it up

   Insurer processing and paperwork the insurer asks for before it pays.

   Ask

   Has the payment arrived? If not, what is the insurer waiting for?

3. 3The money goes into the trust account

   What happens

   Your lawyer deposits it in a client trust account, kept separate from the firm’s own money.

   Can hold it up

   A deposited check has to clear. Paying you before it does would mean using other clients’ money.

   Ask

   When was it deposited, and has it cleared?

4. 4Liens are settled

   What happens

   Medicare, Medicaid, health plans and medical providers with a claim on the settlement are paid or negotiated down.

   Can hold it up

   Waiting for Medicare’s final demand letter or a lienholder’s final number, and negotiating reductions.

   Ask

   Which liens are still open, for how much, and what is each one waiting on?

5. 5Closing statement and your check

   What happens

   Your lawyer gives you a written settlement statement showing the fee, costs, liens and your share, then pays you.

   Can hold it up

   Usually nothing once the liens are final — this is the step where the undisputed money should move.

   Ask

   Can you send the closing statement and pay the undisputed amount now?

How long after signing the release do you get your check?

There’s no single number. Signing the release starts steps 2 to 5 above: the insurer pays your lawyer, the payment clears the trust account, liens are finalized and your closing statement is prepared. A case with no liens can move through those steps quickly; a case waiting on Medicare’s final demand or a hospital’s final number takes longer. If you want a date, ask your lawyer which of those steps is still open — that answer tells you what you’re waiting for.

Medicare and other medical liens

Liens are the most common reason money stays in the trust account. If Medicare paid for injury-related care, the amount in its conditional payment letter is an interim figure. Once the settlement is reported, Medicare’s recovery contractor issues a formal demand letter — and federal regulations require Medicare to reduce its claim by its share of your fees and costs. Repayment is expected within the time stated in the demand letter; if it isn’t paid on time, interest is charged from the date of the letter. Medicaid, employer health plans and hospitals have their own lien rules, and those claims are often negotiated down before they’re paid.

Your lawyer typically won’t release the part of the settlement that covers a lien until its final amount is known. That protects you too: paying you first and leaving a lien unpaid can come back to you later.

How long is too long?

Waiting is normal while a lien is being finalized. These are signs it’s time to push:

• You haven’t received a written settlement statement, even though the payment has arrived.
• Nobody can tell you what is being held, for whom, and why.
• The undisputed part of the money hasn’t been paid.
• Your calls and emails go unanswered.

A letter to request your accounting

Asking in writing creates a record and invokes your lawyer’s duty to account for your money. Copy this, fill in the brackets and send it by email:

Subject: Request for settlement statement and accounting — [case name]

Dear [lawyer’s name],

I understand my case settled on [date]. Please send me:

1. The written settlement statement showing the gross settlement, your fee, case costs, each lien or bill paid or held back, and the amount due to me.
2. The date the settlement funds were received and deposited in your trust account.
3. For any amount you are still holding: who claims it, how much, and what is needed to resolve it.

If part of the money is not in dispute, please let me know when it will be paid to me.

Thank you,
[your name]
[phone or email]

If you get no response, contact the lawyer-discipline office of your state bar or state supreme court. If money was taken dishonestly, many states also have a client protection fund that can reimburse clients who lost money because of a lawyer’s dishonest conduct.