Who Gets Paid First in a Personal Injury Settlement?
When your case settles, the check does not come straight to you. It goes through your lawyer first, and several people or companies may have a right to part of it. Here is the order the money usually moves in, and the New York rules that protect your share.
The short answer: You are paid last. The lawyer's fee, case costs and certain paybacks come out first, and you get the rest. The good news is that New York law blocks most health insurance companies from taking any of your settlement back.
Where the money goes, step by step
- Your lawyer's trust account. The check is deposited into a special trust account. New York lawyers must keep client money there, apart from their own money.
- The fee and case costs. Your lawyer takes the fee you agreed to and gets paid back for case costs, such as court fees, medical records and expert doctors. Court rules cap the fee.
- Paybacks. Anyone with a legal right to be paid back from your settlement is paid next.
- You. Whatever is left is yours.
Who can ask to be paid back
| Who | Do they get paid from a New York settlement? |
|---|---|
| Medicare | Yes, but Medicare usually lowers its amount to account for your lawyer's fee and costs. |
| Medicaid | Yes, for care it paid that is related to the injury. |
| Workers' comp insurer | Yes, if you got workers' comp for the same injury. |
| Regular health insurance | Usually no, because New York law blocks most insurers from taking money back. |
| Employer plans that pay claims with the employer's own money | Sometimes, because federal law can override New York's rule. |
| No-fault car insurance | Usually no, in car crash cases between insured drivers. |
| A hospital | Yes, if it filed a lien, which is a legal claim on your settlement. |
| A doctor | Only if you agreed in writing to pay the doctor from your settlement. |
| A lawsuit cash-advance company | Yes, as your contract says, within the limits of New York law. |
New York's protection against health insurers
In many states, your health insurance company can take back what it paid for your injury care. New York is different. Under General Obligations Law § 5-335, the law treats your settlement as if it has no money for bills your health insurer paid or must pay. The insurer cannot argue otherwise. That means most health insurers cannot claim any of your settlement. This rule can add thousands of dollars to your share.
There are exceptions. Medicare, Medicaid and workers' comp keep their rights to be paid back. Some employer plans that pay claims with their own money may also have rights under federal law. Ask your lawyer which rules apply to your plan.
Lawsuit cash advances
Some people get a cash advance on their case while they wait. If you did, the company is repaid from your share. New York's Litigation Funding Act took effect on June 17, 2026, for agreements made on or after that date. Under the law:
- The company cannot make you pay more than the money it gave you plus 25% of your claim proceeds.
- If your case brings in no money, you owe nothing.
- You can cancel within 10 business days after getting the money, as long as you return all of it.
- Companies that provide this funding must register with the state.
Your closing statement
Court rules in New York City and nearby counties set a clear deadline. Your lawyer has 15 days after receiving the settlement money to pay you your share. Your lawyer must also give you a closing statement in that time. It lists the settlement amount, the fee, every cost and every payback. Read it closely, and ask about any line you do not understand.
Questions to ask your lawyer
- Who has asked to be paid back from my settlement, and how much?
- Can any of those amounts be lowered?
- When will I get my check?
- Can I see a breakdown of my take-home amount before the money goes out?
The bottom line
You get paid last, but you should never be surprised. Ask for the numbers early and check them against your closing statement. To see what the fee and costs mean for a real settlement, read How Much of a $50,000 or $60,000 Settlement Will I Get? You can also try the SettleScore recovery calculator.
This post gives general information about New York law. It is not legal advice. Talk with a New York injury lawyer about your own case.
Sources
- Health insurers barred from taking money back: General Obligations Law § 5-335.
- Medicare's reduction for lawyer fees and costs: 42 CFR § 411.37.
- Workers' comp lien: Workers' Compensation Law § 29.
- No-fault benefits: Insurance Law § 5104.
- Hospital liens: Lien Law § 189.
- Litigation funding: NY Department of Financial Services; Financial Services Law § 1002 and § 1003.
- Closing statements and 15-day payment: 22 NYCRR 603.25 and 22 NYCRR 691.20.
- Employer plans: FMC Corp. v. Holliday, 498 U.S. 52 (1990).
- Lawyer trust accounts: New York Rule of Professional Conduct 1.15.