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  • Structured settlements are payment plans arranged most often for victims with an injury lawsuit award. There are advantages and disadvantages to having a structured settlement, and if the disadvantages outweigh the benefits a structured settlement can sometimes be sold.

    Structured Settlements

    A structured settlement can be arranged after a victim is awarded damages from an injury lawsuit. A schedule can be arranged between the parties and is often monthly payments made over a certain number of years.

    History

    If you receive damages from an injury lawsuit, it can often be difficult to manage that much money while also learning a new lifestyle necessitated by a severe injury. To assist victims in managing the money meant for long-term care, the government created structured settlements and continues to encourage their use for injury lawsuit damages.

    Advantages

    One benefit of the structured settlement is it eliminates the tax consequences of a lump-sum damage award from an injury lawsuit. Additionally, having a structured settlement means that you will have long-term guaranteed income.

    Disadvantages

    The main disadvantage to having a structured settlement is that you may not have funds available to make a large purchase, such as a car or a home. Even though the money in a structured settlement is yours, you cannot borrow against your future expected payments.

    Selling a Structured Settlement

    While sales of structured settlements have been greatly restricted, it may still be possible to receive a lump-sum payment for your structured settlement. However, companies want to profit from purchasing your structured settlement and so the lump-sum payment is often much lower than the full value of your structured settlement.

    Source:

    Structured Settlements

    Benefits of Structured Settlements

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