When a plaintiff settles a case for a personal injury or commercial litigation case they have two different options in receiving compensation. They have the option of receiving a lump sum of cash for the settlement or receiving payments over a set period of time. When a plaintiff decides to receive payment in installments this is called a structured settlement.
There are several different options to setting up a structured settlement. A structured settlement can be paid out annually, quarterly and sometimes monthly depending upon how the payments have been set up. The main reason why plaintiffs will receive payments as a structured settlement is due to tax implications. When a person opts to receive payments as a structured settlement oftentimes the tax burden decreases and in some cases taxes can be avoided totally.
Another reason why plaintiffs will opt to receive their compensation as a structured settlement is the ability to have an ongoing source of income over a set period of time. For individuals that don’t have financial obligations or financial hardships structured settlements are oftentimes the best way to receive payment from a personal injury or commercial litigation case.
Due to hard economic times, people are now losing their jobs by the millions. With the rise of the unemployment rate and the decline in new jobs, people are beginning to look at new ways to earning a dollar. For people that have structured settlements perhaps one way is to sell part or the whole annuity. When a person decides to secure a structured settlement they still have options to sell their payments to a lawsuit funding company. A lawsuit funding company that provides structured settlement buyouts will purchase part or the full annuity with the intentions of making a percentage on the sale. These companies typically prefer structured settlement purchases because they are much safer than that of a pre settlement loan. Because the risk is much lower the rates tend to be more affordable to the plaintiff.
Regardless, the plaintiff should always consider shopping their rates with several companies in order to find the best percentages for the buyout. Before signing off your structured settlement payments you should always consider contacting your lawyer to review the terms and agreements of the sale.
Content provided by LawLeaf
If you are currently looking for additional information on a structured settlement begin by visiting LawLeaf today. LawLeaf is an online lawsuit funding service that works with a network of lenders.