When settlements were first arranged so that they did not have to pay all at once, and instead make payments over the course of several years, the structured settlement was born. Some believe that structured settlements have become popular because of an increase in personal injury cases, changes in the tax code allowing a beneficial treatment of payments received in the structured settlement of personal injury claims, and possibly higher interest rates. As the option became more common, different types of structured settlements came about.
A settlement arrangement has been and continues to be traditionally one lump sum. When a structured settlement is being made and you aren’t getting settlement money but rather over time, there are many things that go into deciding how much money each payment will be, and how long you’ll be paid—and even when you get your payments.
Structured settlements are often arranged to be paid through an annuity; this means you get a certain amount of money from an insurance company every year for a certain number of years (in some cases, the rest of your life). In most—but not all—of these cases, you end up getting around the same amount of money in each payment, which gives you predictable income for years to come. In some other cases, the amount of money you get in your payments isn’t always the same—you may get a lump sum every few years, as a portion of your award. Maybe your payments increase later on in the payment plan or maybe the payments start out large and get smaller over time instead.
Settlements are reached in many ways. The decision to enter into a structured settlement is made between a claimant and the defendant, with their lawyers assistance. At times, experts may advise the parties as to the extent of the injuries suffered by the claimants and perhaps the expenses that a claimant may have as a result of the injuries. As a claimant, you’re more likely to receive an offer to enter into a structured settlement in cases where you’re going to be recovering from your injuries for a long time—or permanently. While you can probably reach a structured settlement with a payment plan that could work for you, structured settlements are not designed to address sudden expensive needs.
If you find yourself facing a sudden big expense—for example, the need for a new car, or a new house, or education—you are likely to need a lump sum of settlement money instead of waiting for payments.
When you find yourself in need of a lump sum to address a sudden expense, you can speak with a structured settlement funding company like DRB Capital; we will help you file a petition with the court to explain the situation. With the court’s approval, you will be allowed to sell some or all of your future payments in return for a lump sum to take care of your needs right now. It’s good to keep in mind that just because your structured settlement isn’t always convenient for your needs, it doesn’t mean you can’t find a way to get more out of it, which sometimes means getting some of your settlement money in the form of cash.
We put our customers first and we want to wish each and every one of you success in 2015. If you have any questions about the types of structured settlements and how you can get a lump sum for your structured settlement payments, please call us at 877-894-4541.