An Introduction to Structured Settlement

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Structured Settlement

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:

  1. Road Accident
  2. Workplace Injury
  3. 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:

  1. 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.
  2. 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:

  1. 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.
  2. 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

  1. Cullins

    September 1, 2015 at 11:26 pm

    A lawyer can help to investigate the slip and fall accident, gather witness information, and ensure that evidence is well documented and preserved.

  2. Rex Mi

    September 2, 2015 at 7:25 pm

    Let’s take a recent case where a group of people in a car were ambushed by gunfire. One passenger was injured and another was killed in the attack. A personal injury claim against the vehicle’s driver was not successful in this case because the court stated that a car driver’s duty to drive safely does not include protecting passengers from criminal acts perpetrated by gang members.


      September 21, 2015 at 5:55 pm

      Are you talking about a real story or a is that fictional?

  3. Devon

    September 6, 2015 at 5:47 pm

    Most vehicle accident claims arise out of the negligent actions of one or more parties. The first element of a negligence claim is a duty. This is the legal responsibility of one party to act a certain way toward another party. By virtue of driving on the same roadways, all drivers have the legal duty to obey the laws and drive in a reasonable manner that does not place other drivers or people on the roadway at an unreasonable risk of harm.

  4. Hank

    September 7, 2015 at 5:58 pm

    I was wondering a question for a few days and this article just made me remember it :) :)

  5. Panton

    September 8, 2015 at 4:24 pm

    They may involve street gangs or even random incidents, which still leave individuals with serious or even fatal injuries. If you have suffered a gunshot wound, you may wonder how to hold the at-fault party accountable for his or her wrongdoing. It is important that injured victims understand their legal rights and options in such cases.

  6. Agatha Harris

    October 29, 2015 at 8:55 pm

    Sadly, many personal injury plaintiffs who receive large bonuses blow through the currency in a surprisingly short time. And then, maybe two or three years later, have nothing left. So I will recommend my friends here to utilize the settlement money properly.

  7. Timothy Roger

    October 30, 2015 at 1:12 pm

    Well a lump sum is recommended unless it’s an injury case. To me, if you are settling your own car accident situation for, say, $50,000, and the insurance adjuster is forcing you to take your settlement as a structured settlement, tell him/her no. Tell the adjuster that you want your cash as a lump sum settlement, to be paid after signing the statement and other settlement papers.

  8. Lia Thompson

    November 2, 2015 at 11:00 am

    To me, a lump sum settlement is the traditional way for settling a case. The defendant sends you a check, you cash the check, and the lawsuit is over. I think, you should take a lump sum settlement for all small settlements and most average sized settlements (less than $200,000 or so).

  9. Stewart G.

    November 2, 2015 at 3:33 pm

    A structured settlement saves you cash on your taxes. While the cash that you get in a personal injury settlement is usually not taxable, you do have to pay taxes on the interest and extras that you receive on the settlement money after you invest it. So people looking for some tax free money should get a structured settlement, at least that’s what I would probably do :)

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