What to Remember When Settling a Car Accident Claim
Many people are relieved to finally reach a settlement for their car accident claim. They look forward to finally getting the compensation they deserve and moving forward with their lives. In fact, many of them have the money already earmarked for bills and other expenses incurred while they were injured.
Nonetheless, there are a few key considerations you must remember when settling a car accident claim in New Jersey. Every accident victim should sign an agreement with their eyes wide open. Below, our personal injury attorney highlights some of the most important facts.
You Won’t Get More Money from this Defendant
Every settlement comes with a release agreement. With this release, you give up your ability to sue this defendant for this accident. You can still sue other defendants. But when it comes to the defendant who is settling, you can’t go into court and sue them for more.
Consequently, you need to get as much compensation as possible right now before you sign your agreement. If you try to go to court later and sue, the defendant will show the judge the signed release agreement and request dismissal of your case. And a judge will agree.
For this reason, discuss settlement offers with your attorney. He should have a good idea whether you can hold out for more money or whether this is the best offer possible.
You Might Owe Taxes on Some of the Settlement
Always consider how taxes will affect your settlement. Only some of the compensation you receive is tax-exempt:
- Compensation for out-of-pocket expenses like medical care or property damage is not taxable.
- Compensation received for physical injuries, like pain and suffering, is not taxable.
- Punitive damages are taxable.
- Compensation for lost income is also taxable.
Work with your attorney to estimate how much you will end up paying in taxes. If your settlement is large, also discuss whether to receive it as a lump sum or in smaller installments over a number of years.
There Might Be Liens on Your Settlement
A lien is a right to payment. Before you receive your settlement check, your attorney will pay off any liens. For example, you might have used your health insurance to pay for medical treatment right after the accident. Your insurer will have a lien to be reimbursed out of your settlement.
Your Attorney is Paid a Contingency Fee Out of the Settlement
Your lawyer probably worked on contingency. Based on your agreement, he or she will take a percentage of your settlement. This amount is deducted before your lawyer sends you a check.
Your agreement might also call for other deductions, such as costs (postage, court reporter, or expert witness fees). Your attorney will also deduct this amount from your settlement.
Call Us to Talk
There are many considerations that go into determining whether a settlement offer is right for you. At the Law Offices of Anthony Carbone, we work closely with our clients on deciding what is the right offer to accept. To talk with our office, call or send an online message.