Don’t Know What a Structured Settlement Is? Here’s a Quick Tour for You
If you are questioning what a settlement is, then let me describe it in a nutshell. It is an agreement. And here, usually the victim of an injury claim gets returns from the defendant. The return is for all the injuries and damages caused by the defendant.
(Note: Settlements are generally mentioned to paying a casualty of a lawsuit through financial support. But of course through legal means. Such as, a settlement.)
Getting eligible for a settlement
If you were ever a casualty of a road accident, personal injury and financial damages as a result of:
- Road Accident
- Workplace Injury
- Or Injured Wrongfully, then
you are lawfully eligible of a payment in any form cash, bonds or assets with sufficient financial value to fulfill your requirements. All you have to do is to get an attorney to win your case in the court of law. And you don’t have to worry much about it, as almost 60% of these lawsuits are settled before even going to a trial. But the majority of the ones that do get to trial, are successful in the end.
Structured Settlements Facts
Before moving on further with the subject, here are a few terms you need to know first.
Discount rate – It is the ratio of the over-all amount of the money you get. Suppose, you are eligible to $100,000 of a lawsuit. And you choose to sell or cash it out with 10% discount rate to a corporation or a broker. So now the overall cash you get is $90,000 and the charge or fee billed by the broker is $10,000.
Settlement Annuity – This is a business term which means to obtain or pay cash on regular time periods. It can be monthly, yearly or even daily over the validity of your settlement. Quite the opposite of an annuity, if you want all the cash fast, you can get the amount in full with the same procedure. And that includes a payment as well.
Categories of Settlement
At this instant, if you win your case and get authorized to a settlement, there are two methods to get them:
- Lump-Sum: This choice is better for individuals who want to purchase a new house, restore their homes and need a load of money to do so.
- Structured Settlement: Oppositely, if you want regular flow of money that can support you as income and offers you health security (for patients), then this decision might be more helpful for you than a lump-sum. Likewise, if you ever need the full amount, you can sell your annuity for a lump sum. Also, it is let off from tax accusation.
From time to time, victims don’t have money for an attorney. And in case they win, they want it fast and cannot wait for the cash to be actually received. In these circumstances, there is one more way of getting yourself a payment. Talk to a settlement company and get a jeopardy free loan from them. It is a kind of loan where they give you the cash right after billing you with the discount rate. And then after you win your lawsuit, you pay them back with your outcome.
On your demand, they will estimate your case. Then if they think it’s good, they will provide you two opportunities:
- Pre Settlement- If you don’t have sufficient money to go for a professional lawsuit or hire an attorney, this decisions is perfect or you.
- Post Settlement- It usually takes 45 days to physically obtain the cash after you win the case. If you can’t hold your patience for that long, you can go for this choice and get yourself a loan in 2 working days.
Even though you can choose for yourself, you should contact a professional to evaluate your lawsuit and guide you to the right decision.
Ultimately, when you receive the cash, think of what Warren Buffet believed, “Do not save what is left after expenditure, but expend what is left after savings.” So, never hesitate to get a professional lawyer, because it will be a worthy investment.
Author: Michael Weldon