How does an attorney who files your disability application make money?
Wednesday, May 19th, 2010 at
1:36 pm
A friend of mine is considering applying for disability benefits. We met with an attorney who said that the fee would be 25% of the past-due benefits. Could someone explain what this means? He also said that he doesn’t make money on every case–how could this be? We just need to know if we’re going to end up with a huge legal bill.
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You apply for disability on 1-1-2009. If you win, then you will get $2,000 per month. It takes an entire year for your disability to be approved. So, when you are approved, you are owed payments starting on 1-1-2009. The attorney gets his or her fee from that.
The attorney may not make money on every case. 50% of people who apply for Social Security disability gets turned down. The attorney knows his odds are 50/50 by taking this case.
If the attorney did not believe your friend had a winnable case then he would not take it.
It seems pretty straightforward. If your friend’s eligibility began, say, in January, s/he would be eligible to receive benefits for seven months. The attorney would take 25% of that total amount.
Why doesn’t your friend contact Social Security first? I don’t know why you would need an attorney, unless she had been denied the benefits.
It takes months for Social Security to precess a claim. If you filed on 1 Jan, 09 and it takes until 1 Sep, 09, then they owe back-pay to the application date, 8 months. Say the award is $ 1500 per month, that is $ 12,000. The lawyer would get 25%, so his part would be $ 3000.00. As difficult as Social Security is, sometimes a lawyer is worth it.
Have your “friend” read the information on the SSI/Disability website. There are limits as far as how much an attorney can charge. I do agree that most people get turned down the first time they apply for benefits. In the past, some attorneys have drug out the cases in order to make their payments larger due to collection of back payments to the disabled person. This is why a cap was put on the fees.
when you apply for social security benefits, if you win, the money you recieve is retroactive, or from the date you originally filed. Lets say it takes two years to get it approved, you will recieve the money from the date two years ago.
They dont win every case, but they do size up the case and its details and have a pretty good educated guess as to whether it will be approved. Nothing is guaranteed.
You wont end up with a huge legal bill, becuase if your contract or agreement with this attorney is 25% of the benefits received then that is what they get. If they loose, then they get nothing, you pay nothing.