What is a structured settlement company?

Structured settlement purchasing companies, also known as factoring companies, provide services to those who sell their structured settlement payments. These companies offer deal owners lump sums of cash in exchange for rights to future payments or parts of future payments. A Structured Settlement Annuity (SSA) provides periodic tax-free payments over a period of time, specifically designed to meet the needs of the injured party. Specialized consultants facilitate the liquidation process and help design and negotiate the structure.

If the settlement is structured to pay for a fixed guaranteed period, the annuity can normally be inherited for the rest of the guaranteed installments. For example, in a structured settlement payment, payments may increase or decrease in the future several times. Settlement payments to the injured party did not count towards their gross income and, therefore, they were not required to pay taxes on the money received. Secondary market annuities occur when a third-party company gives the agreement owner a lump sum of money for payment of the structured settlement.

A structured settlement is an agreement between a plaintiff and a defendant under which the plaintiff receives compensation in the form of a flow of periodic payments. If you choose to receive payment for your lawsuit through a structured settlement, you can determine if you start receiving the funds immediately or at a later date. The settlement is then spread out into a series of periodic payments over an agreed period of time rather than a one-time payment in most cases. In 1982, Congress passed a law stating that plaintiffs in personal injury, wrongful death, and workers' compensation claims could receive their settlement awards as tax-free income payment streams through a structured settlement annuity.

A structured settlement guarantees the payee tax-free installments of income for the life of the settlement. Regardless of whether you choose a one-time payment or a structured settlement, it's worth consulting with a tax professional, accountant, or financial planner to determine how the structure of your award or settlement will help you maximize your outcome based on your personal circumstances and to achieve your goals. financial. Choosing between a one-time payment and a structured settlement can have long-term tax and personal consequences.

Secured structured settlement payments can provide claimants with predictable income for the rest of their lives.

Minnie Wuestenberg
Minnie Wuestenberg

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