You’ve been through a personal injury — maybe a car accident, a slip-and-fall, or some other unexpected event. You’ve dealt with the pain, doctor visits, and stress. Now, after what feels like forever, you finally get a settlement. Relief, right?
Well, not so fast.
One of the most common surprises people face after winning a personal injury case is realizing they won’t actually keep the full settlement amount. The number you hear about in court or see on paper is not the amount that lands in your bank account. There are deductions — and they can be bigger than you expect.
Many injured people also ask, how much can lawyers reduce medical bills? That’s an important question, especially since medical costs take a big bite out of your final amount. In this blog, we’ll walk you through where your money goes and how much of it you’re likely to keep.
Start With the Gross Settlement Amount
Let’s say you win a settlement for $100,000. That’s your gross settlement — the full amount agreed upon to compensate you for your injuries, damages, and losses.
But you won’t get that full $100,000. First, you’ll have to subtract a few things.
Attorney’s Fees Come First
Most personal injury lawyers work on a contingency fee basis. That means they only get paid if you win. It’s a great system if you can’t afford to pay upfront — but it also means your lawyer takes a percentage of your settlement.
This percentage typically ranges from 30% to 40% depending on the agreement. If your lawyer takes 33%, and your gross settlement is $100,000, they’ll take $33,000. That leaves you with $67,000.
Case Costs and Expenses
Next, there are legal costs — things like filing fees, court reporter charges, medical record requests, expert witness fees, and travel expenses.
Sometimes these costs are taken out before the lawyer’s fee is calculated. Other times, they’re deducted after. It depends on the agreement you signed with your attorney.
These expenses can range from a few hundred to several thousand dollars depending on the complexity of your case. Let’s say costs total $5,000. Now you’re down to $62,000.
Medical Bills and Liens
This is where things get tricky. If your health insurance company, a hospital, or a doctor paid for your treatment and expects reimbursement, they may place a lien on your settlement. A lien is a legal right to recover money from your payout.
Depending on your injuries, these bills can be huge. But here’s where your lawyer can help. They can often negotiate with hospitals or insurance companies to reduce the medical bills.
Let’s say your lawyer negotiates your medical bills down to $12,000. That gets taken from your remaining $62,000, leaving you with $50,000.
Taxes on Your Settlement?
In most personal injury cases, the money you receive for physical injuries is not taxable. That means the IRS doesn’t take a piece of your pain and suffering compensation.
However, there are a few exceptions:
- If you claimed a tax deduction for medical expenses in a prior year, you may have to pay some of that back.
- If any part of the settlement is for lost wages or emotional distress without a physical injury, it could be taxable.
It’s always best to check with a tax professional if your case is more complex.
Tips to Maximize What You Keep
- Negotiate medical bills: Ask your lawyer to push hard on this. Some providers are open to reducing amounts if they know you’re being fair.
- Understand your fee agreement: Know how your lawyer calculates their percentage and what’s considered an “expense.”
- Track all treatment costs: Keeping clear records helps you and your lawyer fight off unnecessary liens or inflated charges.
- Talk to a tax pro: Just to be safe — especially if your case involves non-physical damages or lost wages.
Final Thoughts
Winning a contingency fee case is a big victory — but it’s just one part of the journey. What matters most is understanding how much you actually keep when the check arrives.
By being informed, asking questions, and working closely with a good lawyer, you can make sure you walk away with the most money possible. After everything you’ve been through, you deserve that peace of mind — and your fair share.
