After suffering an injury in an accident in Louisiana, there’s a good chance you’ll be owed financial compensation.
But you may be wondering when you’ll see that money, and if the amount you’re awarded will be taxable by the government. At Brandt & Sherman Personal Injury Lawyers, we can help you navigate every step of this process.
When will I get my money in a personal injury case?
Every personal injury case is unique. There’s no definitive answer to how much money you’ll be awarded after an accident, and there is also no way of knowing exactly when you’ll receive your financial compensation. It could be a matter of weeks, months, or sometimes even years, depending on the complexity of your situation. Here are some possible scenarios.
- I’ve been injured in an accident and submitted my demand letter to the insurance company of the at-fault driver. In this case, the insurance company will either accept or reject your demand letter, or make a counteroffer. An insurance company in Louisiana will usually make an offer to you, the injured party, within 30 days of receiving your demand letter. You should always discuss the offer with an attorney since insurance companies are notorious for low-balling the injured party. If the offer is fair and you accept it and sign the settlement agreement, Louisiana law states that the insurance company must pay within 30 days or may face penalties.
- My lawyer and I have been unable to reach an agreement with the insurance company regarding a fair settlement after my accident. If you’re unhappy with the proposed settlement, you can file a lawsuit. Over 80% of accident injury claims are settled out of court. Sometimes, however, an agreement simply cannot be reached, and your case will go to trial. Any damages you are awarded by a judge follow the same release rules as an out-of-court insurance settlement: once you’ve signed off, you’ll receive your check within 30 days. Taking a case to court, however, can take up to several years to settle due to paperwork, processes, and the actual time spent in front of judge or jury, and that can extend the length of time from accident to payment.
- After being injured in a car accident, I filed my claim to the insurance company, and they came back immediately with an offer. This may seem too good to be true—because it often is. his is a common tactic among insurance companies. They know that after an accident, you’re often in pain, distressed, or worried about mounting medical bills and lost wages. Insurance companies often prey upon those vulnerabilities. That’s why it’s important not to let the pressure lead you into accepting an insultingly low offer. Retaining an attorney and letting them fight your case for you may take several weeks or months—but can result in a much larger settlement—the one you deserve.
Why does it take so long to settle a personal injury case?
After suffering injuries from an accident, you likely want to settle quickly, receive your money, and put the accident behind you. As experienced personal injury lawyers, however, we strongly advise you to exercise patience and caution. In order to get every penny you deserve, it’s important to ensure you are either completely recovered from your injuries, or—in the case of long-term injury or disability—that you’ve received a thorough diagnosis and treatment plan. This allows your attorney to demonstrate to the insurance company or court the full extent of what your medical expenses are or will be. After you’ve settled your case, you are required to sign a release to receive your money. Once this release has been signed, you can no longer make a claim for the accident, even if new injuries stemming from that accident develop later on. So take the time right from the beginning to see a doctor and gather all the proof of injury you’ll need.
If your lawyer estimates that your claim will take longer than a year to settle, he or she may advise you to file a lawsuit. This is because the statute of limitations in Louisiana is one year from the date of the accident, and a respected lawyer will want to make sure you aren’t left in the lurch regarding your eligibility to receive compensation.
Do I have to pay tax on a personal injury settlement?
Whether you settle in court or out, most of the money you’re awarded is tax-free. Typically the two most common types of payments are compensatory damages and property loss damages. Compensatory damages are intended to help you pay for medical bills if you’ve been injured in an accident. They’re non-taxable since they’re not considered income. Property loss damages are intended to help you pay to repair or replace property (like a vehicle) after an accident. They’re also tax-free in Louisiana, unless the amount awarded exceeds the estimated loss of value. In that case, the excess amount is considered taxable income at both the state and federal levels.
What tax do I have to pay on my personal injury settlement?
Although compensatory and property loss damages are not taxable, in some instances, your personal injury settlement will be taxable. These include:
- Punitive damages. These damages are ordered by a judge when the defendant (the at-fault party) has acted particularly egregiously or negligently and needs to be “punished”. The money you receive in punitive damages is taxable. This money, however, is usually awarded on top of compensatory damages—so it’s not the only financial compensation you’ll be receiving.
- Lost income. It’s common to be awarded money for “lost income,” meaning the money you would have made working if you had been able to work. Lost income is awarded if the injuries you sustained in the car wreck prevent you from being able to earn money. In Louisiana this award is not taxable.
- Pain and suffering. If you have suffered emotional or mental distress as a result of your accident, you may be awarded financial compensation. Pain and suffering compensation, however, is not considered taxable income in Louisiana.
If you’ve been injured in an accident, reach out to us at Brandt & Sherman Injury Lawyers if you’re in Louisiana. With over 60 years of combined experience, we’ll help you get the help you need and deserve. Contact us today, and see how we become your lawyer, your voice.