Winning a settlement is only part of the process—understanding how much you will actually receive in your pocket after fees, costs, and reimbursements is equally important. In Georgia, the net amount you take home can vary widely based on the complexity of your case, necessary expenses, and lien repayments. Below, we break down common questions accident victims have about their settlement payouts.

How Much of a $25,000 Settlement Will I Get?

There is no fixed answer because each case has different expenses and deductions. Your actual recovery depends on:

  • Attorney’s fees: Often 33⅓% before litigation, 40% if the case goes to trial.
  • Case expenses: Costs for depositions, expert witnesses, medical record retrieval, and investigations.
  • Medical liens: Payments owed to healthcare providers or health insurers with subrogation rights.

For example, if $25,000 is recovered and you have $8,000 in medical liens plus $2,000 in litigation costs, your net settlement after attorney’s fees will be significantly less than the gross amount. The more complex the case, the higher the costs.

How Much of a $30,000 Settlement Will I Get?

The calculation works the same way as a $25,000 settlement—percentages and deductions vary based on the case. The difference in gross amount doesn’t always translate to a big difference in net amount if your expenses are higher. Cases involving accident reconstruction experts, multiple depositions, or extensive medical testimony can quickly increase costs. These expenses are paid out of the settlement before you receive your portion.

Does Settlement Money Get Taxed?

In Georgia, personal injury settlement proceeds for physical injuries are not taxable. That means the money you receive for medical expenses, pain and suffering, and related damages is generally exempt from state and federal income tax. The exception: Settlement amounts specifically allocated for punitive damages or interest may be taxable. Your attorney can clarify whether any part of your award falls into these categories.

Do I Have to Report a Personal Injury Settlement to the IRS?

No, you do not have to report a personal injury settlement for physical injuries to the IRS. However, it’s best to keep documentation showing that the settlement was for personal injury damages. Many law firms provide a letter confirming the nature of the settlement in case the IRS ever asks.

How to Protect Settlement Money

There are several strategies to protect your settlement funds from being lost, misused, or accessed by others:

  • Structured settlements: Payments are scheduled over time and can grow tax-free. This can be particularly useful for long-term financial goals, such as retirement or a child’s education. For example, you might receive part of your settlement now and schedule additional lump-sum payments in year 10, year 15, and year 20, allowing the funds to grow in a tax-free annuity.
  • Legal trusts: Protect funds from creditors and prevent unwanted access.
  • Separate bank accounts: Keep settlement money separate from regular checking accounts for better tracking.
  • Special rules for minors: In Georgia, settlements for minors must be court-approved and are generally required to be structured to safeguard the funds until adulthood. This ensures the money is protected and available when the child needs it most, such as for education or living expenses after turning 18.

Real Example – Protecting a Minor’s Settlement in Cobb County

In a case involving an injured minor, Georgia law required the settlement to be court-approved and structured. We created a payout schedule designed to protect the funds until adulthood, providing lump-sum payments for college expenses and living costs while allowing the remainder to grow tax-free. This ensured the client’s financial security and compliance with all state requirements.

Can a Settlement Check Be Direct Deposited?

Yes, but not directly from the insurance company to you. By law, settlement checks are made payable to you and your attorney and must be deposited into the attorney’s trust account first. From there, the attorney pays liens, deducts fees and expenses, and then can wire or direct deposit the net amount to your personal account. Settlement funds cannot be deposited into an LLC account because of potential creditor claims and ownership issues.

Where Can I Cash a $20,000 Settlement Check?

Once your attorney issues your net settlement check, you can deposit or cash it at:

  • Your own bank (may place a temporary hold depending on your account history)
  • The issuing bank (will often confirm with the law firm before releasing funds)
  • A check cashing service (may charge high fees)

Choosing the right option depends on your need for immediate access to the funds and the policies of your bank.

Why Knowing Your Net Recovery Matters

A settlement’s gross value doesn’t tell the whole story—your net recovery is what impacts your life moving forward. Understanding attorneys’ fees, costs, liens, and tax rules ensures there are no surprises when your case concludes. A skilled attorney not only maximizes your gross settlement but also works to reduce expenses and negotiate lien amounts, ultimately increasing the amount you take home.