Simply put, a structured settlement is not a loan or a bank account, and the only way to receive money from your settlement is to stick to your payment schedule or sell part or all of your payments to a credited company for a lump sum of cash. Structured settlements occur when a claimant agrees to resolve a personal injury claim and receives all or part of the settlement through multiple payments. They are an advance of part of the purchase price for the sale of your structured settlement 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.
Most importantly, keep in mind that each state has its own structured settlement protection laws, laws governing the transfer of structured settlement payments, and that all transactions must comply with federal and state laws. 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. When a plaintiff receives a lump sum settlement, they may spend it too quickly, depriving them of the long-term financial security that future payments could provide.
Settling a structured settlement and receiving a one-time payment can help you meet significant financial needs that you would otherwise need to borrow to repay. 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. After reviewing the structured agreement, your lawyer will ask if you are ready to sign an agreement for that option. The amount of cash that the structured settlement buyer will anticipate prior to court approval also depends on the company.
In the U.S. In the US, structured agreements serve as an option in personal injury cases, including pharmaceutical injury and product liability cases. If you're considering a structured deal, you can always sell it later (with court approval) for a lump sum. The federal Structured Settlement Protection Act states that court approval is necessary to ensure that the sale of payments is in the best interest of a person.
While many payment buyers won't charge you a direct fee, they will purchase your monthly payments at what's known as the discount rate. Collecting a structured settlement generally requires working with settlement buyers or factoring companies that specialize in purchasing settlements and providing a lump-sum cash payment. Whether this is an option for you or not will depend on the company purchasing your settlement payments and your criteria for granting cash advances.