Basic Personal Injury Settlement Breakdown: How Much Goes in My Pocket?
May 5, 2025 | J.L. King, II
Personal injury settlements work like most things in life do, meaning what you see is not necessarily what you get. In other words, your “take-home pay” will be less than the amount you negotiate, likely by quite a wide margin. You need to take this into account when formulating the amount of your settlement demand, so that you don’t end up with less than you anticipated.
Your Gross Settlement
Your gross settlement is the amount stated in your settlement agreement. Let’s suppose that you negotiate $100,000. It is extremely unlikely that you will be able to take home the entire $100,000. Below is a list of credits and debits that should help you calculate the amount you will actually see in your bank account.
Insurance Company Coverage Limits
Your claim might exceed a million dollars. If the insurance company has insured the defendant for only $50,000, however, that is all you are going to get, at least from the insurance company. If the defendant cannot pay the balance, you might be out of luck.
That is why, all other factors being equal, it’s better to sue a business. Businesses typically have the financial resources to pay large claims.
Contributory Fault
Contributory fault applies to an accident where two or more parties share liability. Was the accident that injured you partly your fault? If your claim made it to trial, the court would assign you a percentage of fault.
If your percentage of fault exceeded 50%, you would receive nothing. If your percentage of fault was 50% or less, you would lose exactly that percentage of your damages. The bargaining table should yield more or less the same result.
Attorney’s Fees
Almost all personal injury attorneys use the contingency fee system. Under this system, if you lose, your attorney’s fees will be zero. If you win, you will owe 30% to 40% to your lawyer, depending on the exact terms of your fee agreement.
Case Expenses
It will cost a certain amount of money to pursue your claim. If you have to call an expert witness, this will probably turn out to be your largest case expense. Other possible expenses include:
- Investigation expenses
- Copying expenses
- Court filing fees
- Service of process fees
- Deposition costs, including court reporter and transcript fees
- Travel expenses for witnesses or attorneys
- Costs for obtaining medical records or other documentary evidence
- Costs associated with demonstrative exhibits (e.g., charts, diagrams, videos used at trial)
- Mediation or arbitration fees (if applicable)
This is an abbreviated list. You are likely to encounter expenses that are not present here. Keep in mind that not all attorneys treat these expenses the same, so check with your lawyer to see how they will be handled in your specific case.
Medical Liens
A medical lien is a lien in favor of your health care provider that secures the payment of your medical bills. Under the Georgia Hospital Lien Statute, medical liens arise by law in negligence cases. This is a good thing because it helps ensure you get good medical treatment.
Taxes
The Internal Revenue Service (IRS) taxes punitive damages as ordinary income. Most claimants, however, don’t receive punitive damages. Other than this deduction, very few taxes apply to a personal injury settlement. It is not necessarily zero, but it is not much, because personal injury damages do not qualify as earned income.
Talk to an experienced tax lawyer if you are unsure about whether you need to pay taxes on your settlement.
Do You Need a Georgia Personal Injury Lawyer?
If you have suffered an injury that someone else caused, you might have a valid personal injury claim. If your injuries or losses were significant, it is not a good idea to try to handle your claim on your own.
Insurance companies are savvy negotiators, and you will probably need a lawyer to deal with them. A seasoned personal injury lawyer in Georgia can assist you in ways that you may not be fully aware of.
Contact Our Personal Injury Law Firm at The King Firm Car Accident and Personal Injury Lawyers For Help Today
For more information, please contact The King Firm Car Accident and Personal Injury Lawyers at your nearest location to schedule a free case evaluation today.
We have three convenient locations throughout Georgia:
The King Firm Car Accident and Personal Injury Lawyers – Tifton Office
1603 US Hwy 41, Tifton, GA 31794
(229) 386-1376
The King Firm Car Accident and Personal Injury Lawyers – Griffin Office
3317 Fayetteville Rd, Griffin, GA 30223
(404) 567-4546
The King Firm Car Accident and Personal Injury Lawyers – Macon Office
886 Mulberry St, Macon, GA 31201
(478) 292-7272
Or if you would prefer to reach out to us online, please visit our contact us page.