What Expenses Come Out of My Car Accident Settlement in Texas?
If you’ve been in a car accident, you may wonder how much of your settlement actually goes into your pocket. Understanding what expenses are deducted from your settlement can help you plan and avoid surprises.
1. Attorney Fees Are First
Most personal injury attorneys in Texas work on a contingency fee basis, meaning their payment is a percentage of the total settlement.
Example: If your attorney charges 33%, that percentage is taken from the total settlement before calculating other expenses.
If litigation is required, the percentage may increase, sometimes up to 40%.
This is why it’s critical to review your fee agreement carefully and understand how your attorney calculates their share.
2. Case Expenses
After attorney fees, case-related expenses are usually deducted. These are costs that the attorney advances to pursue your claim. Typical expenses include:
Court and filing fees: Filing a lawsuit in Texas may cost around $300.
Service of process: Getting legal papers served to the other party can cost around $100.
Medical records retrieval: Copying and collecting records from hospitals, clinics, and doctors.
Investigations: Police reports, open records requests, body camera or dashcam footage.
Expert witnesses: Specialists like medical or accident reconstruction experts, which can cost thousands of dollars.
Miscellaneous costs: Postage, copies, and other administrative expenses.
3. How the Formula Works
A general formula for your net recovery is:
Total Settlement – Attorney Fees – Case Expenses – Medical Liens = Net Recovery to You
Attorneys typically advance these costs upfront, so you don’t pay out of pocket.
If there’s no recovery, you generally do not owe the attorney for these expenses, aside from some very limited exceptions specified in your agreement.
If there is a recovery, the expenses are subtracted after attorney fees to calculate what you actually receive.
4. Why Understanding Expenses Matters
Knowing what expenses may come out of your settlement:
Prevents surprises when you receive your check.
Helps you understand how hiring a specialized attorney impacts your net recovery.
Allows you to compare attorney fees and expense handling across different law firms.
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