If you have been injured in an accident caused by someone else’s negligence, you’re likely wondering how personal injury settlements are paid. In Pennsylvania, settlements can be made in different ways, and the choice you make can have long-term financial and legal implications.
At Munley Law, our experienced, award-winning Pennsylvania personal injury attorneys help injured victims understand their payment choices. We ensure that you are aware of all your options, allowing you to make the best decision for your specific situation.
Contact us today for a free, no-obligation consultation to discuss your case and your settlement options.
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Call Us At 844-686-5397 Two Ways to Receive Your Personal Injury Settlement
Pennsylvania personal injury settlements are usually paid in one of two ways: structured or lump sum settlements.
Lump Sum Settlement Payments
Most Pennsylvania injury settlements are paid in a lump sum. This means you get all your money at once.
The insurance company pays out everything minus your lawyer’s fees and medical bills. This gives you complete control over your money, allowing you to pay off debts, cover your bills, or save for the future.
Most people opt for lump sum payments because they want immediate access to their funds. It’s simple, final, and gives you the freedom you need to move forward with your life.
Structured Settlement Payments
Structured settlements work differently. Instead of receiving your settlement money all at once, your compensation will be distributed in scheduled payments. These are suitable for serious injuries that require ongoing medical care.
Your choice depends on the severity of your injuries, your current bills, your ability to manage money, and your ongoing medical needs.
An experienced injury lawyer from Munley Law can help you figure out which option is best.
“At Munley Law, our mission is simple: to provide all injury victims equal access to justice, even against the most powerful entities. For more than 65 years, we have been the voice for the injured, the forgotten, and those who need someone to stand beside them in their darkest hour.”
Marion Munley
How Settlement Money is Transferred
After your settlement is finalized, the insurance company will send the money to your personal injury lawyer to distribute the funds to you. Your lawyer will deduct their fees and then provide you with a choice on how you would like to receive the funds.
Many injury victims opt for a check. The law firm issues the check and will either mail it to you, or you can go pick it up at their office.
Another option is through wire transfer. Wire transfers are faster, usually arriving in one or two days, and there’s no risk of a check getting lost in the mail.
The Pennsylvania Rules of Professional Conduct say that settlement money must go into special trust accounts to keep your money separate from the law firm’s money. Your lawyer keeps records of every dollar that comes in and goes out, giving you complete transparency about where your settlement money goes.
What Gets Deducted from Your Personal Injury Settlement?
You need to know what is deducted from your settlement before you get your share. Pennsylvania law allows several deductions, and they’re all necessary to close your case correctly.
- Your lawyer’s fee: Most Pennsylvania injury lawyers work on contingency. This means they get paid a percentage of your settlement instead of charging by the hour. You don’t pay anything up front, and your lawyer only gets paid if you win.
- Case expenses: During your case, your lawyer pays for medical records, hiring expert witnesses, filing court papers, and other necessary costs. These expenses are paid back from your settlement.
- Medical liens: If doctors or hospitals treated you and agreed to wait for payment, they put liens on your settlement. A lien is a legal claim to get paid. Your lawyer negotiates with these providers to reduce what you owe when possible.
- Health insurance liens: If your health insurance paid for treatment related to your accident, they have a right to get that money back. Your lawyer has to settle these claims before you get your money.
After all these deductions, what’s left is yours. Your lawyer provides a detailed breakdown of the total settlement, all deductions, and your final amount.
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Are Personal Injury Settlements Taxed?
Most personal injury settlements in Pennsylvania are not subject to taxation. The IRS doesn’t consider money for medical bills, pain and suffering, or lost wages from physical injuries as income. You keep your full settlement without paying federal or state taxes. 
Structured settlements have extra tax benefits. The money growing inside the annuity is tax-free. With a lump sum, if you invest the money, you’ll pay taxes on the interest and gains.
Special Rules for Children’s Settlements
When a child is awarded a personal injury settlement in Pennsylvania, extra protections apply. Pennsylvania law requires court approval for any settlement of a child’s claim exceeding $10,000. A judge reviews the settlement to ensure it’s fair and decides how to protect the funds.
The court usually orders that the money be placed in a restricted account or a structured settlement, ensuring parents can’t access the funds without court permission. This prevents the money from being spent on regular household bills instead of the child’s needs.
Structured settlements are common for injured children because they provide guaranteed income throughout the child’s life. The schedule can be set up to pay for college, medical care, and living expenses when the child becomes an adult.
Contact Munley Law for Help with Your Personal Injury Case
At Munley Law Personal Injury Attorneys, we know that getting your settlement paid the right way matters just as much as winning your case. Our lawyers guide Pennsylvania injury victims through the entire settlement process and help you understand your payment options. We work on a contingency fee basis and pay all case expenses upfront, so you never pay anything out of pocket. You only pay if we win your case.
We’ve been representing injured people across Pennsylvania for nearly seven decades, have been recognized by Best Lawyers, Super Lawyers, and the Irish Legal 100, and have attorneys among the top 1% of trial lawyers in the country. Our team has won substantial settlements and verdicts for thousands of clients, including record-breaking sums of $32.25 million, $26 million, and $20 million.
If you’ve been injured in an accident that wasn’t your fault, contact Munley Law Personal Injury Attorneys today for a free consultation. Our lawyers will review your case and help you structure a settlement that provides both immediate relief and long-term security.
