Nine months ago, Michael Buza was driving near Dupont Circle when a city garbage truck cut in front of his late-model Chrysler while making a right turn from the left lane, and sheared off the front of his car.

Buza, who was not injured, filed suit against the District for the $2,200 that he said he subsequently spent on repairs and rental car payments. The case never went to court, however, because the city agreed to pay him about $1,400 to settle the case -- a fraction of the $3.5 million the District set aside for such payments this year.

Buza is still waiting for his money. After calling District government officials for months, arguing with clerks who said his file had been lost, and demanding to see the mayor, he found out yesterday why the check isn't in the mail.

His claim will have to wait, he was told, because there is no more money left in the corporation counsel's $3.5 million settlement fund.

Buza, a Northwest resident who works for a computer firm, "was told that the D.C. government is temporarily without funds," he said.

But Buza's plight is more complicated than that. Buza and others who fought City Hall and won during the last half of the city's fiscal year now have learned that -- in money matters as in much else -- timing is everything.

Martin Grossman, deputy corporation counsel in charge of the civil divison, notified city officials in July that the settlement fund had been depleted and that no more payments could be made until Oct. 1, when the city's new fiscal year begins and money flows back into the fund. The same thing happened last year.

"Ever since we realized we were getting low, a number of people were being told that if they wanted to settle . . . they would have to wait for their money," Grossman said.

Fiscal relief, the corporation counsel's office hoped, would be forthcoming when a $500,000 mid-year budget increase for the fund won congressional approval. Congress, however, has yet to act on the 1987 supplemental budget.

Budget director Richard C. Siegel said that the settlement fund ran out of money because court-ordered judgments consumed money set aside for negotiated out-of-court settlements. Siegel said payment of mandatory judgments take precedence over settlements. Eventually, Siegel said, everybody gets paid.

Part of Buza's problem, Grossman said, is that he took too long to return the paperwork needed to process his claim. By the time the forms were returned, he said, Buza had missed the fiscal boat.

Grossman said he does not know how many people share Buza's predicament this year. About 640 people shared the $3.5 million in settlement payments last year, Grossman said.