Back in 1982, Congress adopted certain tax rules in order to encourage people to use structured settlements to resolve personal injury cases. Before that, structured settlement cash was given in one lump sum.
Nearlya third of all personal injury claimants are offered some type of structured settlement. If you have been injured on the job and qualified for structured settlement cash, you could qualify to sell your payment off.
What are structured settlements?
Structured settlements are usually used in product liability or injury cases and have been increasingly popular. In a study of over 1,750 commercial personal injury claims, around 12% ended in structured settlement money.
You may have a choice to either have an annuity structured settlement (which will pay out the money in monthly increments) or receive a structured settlement lump sum. A structured settlement is a great choice for those who don’t know how to manage their money properly and would rather not deal with a large chunk of money.
How to receive structured settlement cash:
If you decide you’re in need of immediate cash, you must understand that you are giving up your right to receive any further settlement payments. Structured settlement funding companies will often buy the rights to these monetary payments and will often give you cash on the spot for the sale.
Here’s how the process works: If you receive $40,000 a year for 20 years from your settlement, but ten years into the payment process you need immediate cash and can’t wait for the next payment period, you should call a factoring company (someone who purchases settlements). The company may agree to give you $25,000 in immediate cash, but in return that company will receive your next two or three settlement payments.
When will you see your money? Selling your structured settlement isn’t as easy as it may seem. In fact, virtually every state has laws that require sellers to seek judicial approval before the sell-out process begins. The judge must review the proposal to make sure that selling your structured settlement is a good idea for you.
The entire process of selling your settlement could take a month or more, so you should plan your financial situation accordingly.
How much money can I get? The amount of money you receive depends on a variety of factors, such as your age, health what state you live in, what company you’ve chosen to sell to, how many payments you want to sell, and your current financial situation.
You should shop around for the best offers and always consult a financial specialist before making any decision.