Collecting a Car Accident Settlement or Judgment

Reaching a settlement or getting a judgment in your favor is one thing; getting paid could be a different story.

By , Attorney · University of Tulsa College of Law
Updated by Charles Crain, Attorney · UC Berkeley School of Law

You've won your car accident case. The court or jury has awarded you damages. You're the winning party. The hard part is over, right? Not necessarily. Many people believe that once a judgment is obtained, the losing party immediately writes a check to the winning party before even leaving the courthouse. Unfortunately, that isn't the way it works. Winning compensation is often only half the battle. Now you have to collect it.

How Soon Can I Expect Payment of My Damages?

The time period within which you can expect payment of your damages depends on whether the obligation to pay arises out of a settlement agreement or as a result of a trial in court. Let's look at each of these scenarios.

Collecting Money After a Settlement Agreement

A settlement agreement is a pre-trial resolution of your car accident case. An agreement can be reached at any time between the parties, but generally occurs at some point before the beginning of a trial in court. It can even occur without a lawsuit ever being filed.

The paperwork for an injury settlement will include a written release in which you agree to accept compensation in exchange for giving up any future legal or financial claims related to your accident. To ensure that you receive your money in a reasonable amount of time, you can ask that the release include:

  • a time period within which the settlement amount must be paid
  • an agreement that, if the settlement is not paid within that time, the collecting party has the right to add interest to the unpaid amount, and
  • an agreement that, if the settlement isn't paid on time, then you'll have the right to throw out the settlement agreement and reinstate the lawsuit.

Keep in mind that, if you're negotiating with an insurance company (or any big organization), they'll have standard forms for these kinds of legal agreements and their own ideas about things like how many days or weeks it should take for you to receive your settlement money. You may find it helpful to work with an attorney who can negotiate on your behalf and advise you on what kind of settlement terms are reasonable.

Collecting Money After a Judgment In Your Favor

If you win in court, the amount of time the defendant has to pay the judgment will vary based on the laws where you live and the rules of the court that heard your case. The losing party in a lawsuit typically doesn't pay a judgment until certain post-judgment deadlines pass.

The defendant in your lawsuit may want to file a motion for a new trial following an unsatisfactory outcome. Court rules usually give losing parties only a few weeks to file this kind of motion. For example, the deadline for asking for a new trial is:

If a new trial is ordered, that means the original judgment is overturned and you'll start again.

The losing party might also choose to file an appeal, where they ask a higher court to overturn all or part of the original verdict. An appeal usually means that the judgment is put on hold, and will only be paid if the higher court affirms the decision of the jury or trial court judge. The deadline for filing an appeal is typically about 30 days, but varies by jurisdiction. For example, litigants in Colorado state court have 49 days, but the time limit in Missouri is only 10 days.

Remember that the clock doesn't necessarily start ticking on these deadlines just because a judge or jury has ruled in your favor. In New York, for example, the losing party's deadline for filing an appeal is measured from when you send them a written notice of the court's judgment. Make sure you do everything the law requires to get the process started.

What If the Other Party Doesn't Pay on Time?

If the other side doesn't meet its payment deadline you have several options for collecting the money. These tools can be particularly useful where the losing party is ignoring the legal obligation to pay the judgment.

Insurance Companies Generally Meet Their Payment Deadlines

The good news is that, if your judgment involves an insurance claim arising out of a car accident, the collection of a judgment is usually a relatively smooth process. That's because, even though the other driver is probably named personally as the defendant, it's the driver's insurance company that will usually be writing the check for the judgment.

Insurance companies appear in court frequently, and are well aware of the penalties (and potentially the damage to their reputations) that come with failing to pay a judgment on time. That means you can typically expect a check from an insurance company to arrive within 15 to 45 days of a court's ruling (unless they decide to appeal or ask the court for a new trial). For similar reasons, it would be unusual for an insurance company to try to backtrack on a payment deadline they agreed to as part of an out-of-court settlement.

As a "Judgment Creditor" You May Have Several Options for Collecting Your Money

Sometimes you might have to take extra steps to get a business or individual to pay the money they owe you. If the deadline was part of a negotiated settlement, then you can with the options for pursuing payment that are included in the settlement agreement. This could eventually lead to a court's involvement in enforcing the terms of the settlement.

In most states, the process of using the legal system to collect a judgment is called "execution" on a judgment, and it can take many forms. When you're owed money as the result of a decision by a judge or a jury, you're a so-called "judgment creditor." That means you have more options than other kinds of creditors (for example, credit card companies) for collecting the money you're owed. These include:

  • Bank account levies. If it has the proper legal go-ahead, a financial institution can withdraw money from an account belonging to a person or business that owes a judgment, and transfer it to a judgment creditor.
  • Wage garnishment. You can have an employer take a percentage of an employee's paychecks and transfer it to you. The percentage is limited by state law, but wages can be garnished until the judgment is paid off.
  • Real property liens. A lien on the debtor's real estate won't yield money right away—as a practical matter you'll be waiting until the property is sold or refinanced. But it can be a simple way to push someone to pay what they owe.

Learn More About Collecting Money You're Owed From a Legal Judgment or Settlement Agreement

Businesses and individuals that are financially able to pay court-ordered judgments will generally prefer to just hand over the money and move on. So, if you're having trouble collecting a judgment or settlement, it may make sense to try to work out a payment arrangement before pursuing further legal remedies. Negotiations can be an important part of the collection process just like they are during the car accident insurance claim or lawsuit process. An experienced attorney may be able to help you decide on the best way to proceed.

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