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What are Structured Settlements?

Shay Morrigan | February 19th, 2013

If you are involved in a personal injury lawsuit, you may wonder what will happen if you win your case. Say the jury awards you $300,000, or your lawyer is able to negotiate a settlement of the same amount. Do you just go home with a $300,000 check? Though in some cases you may go home with a lump sum, it is more likely that you will have the option to choose a structured settlement, which can be advantageous for several reasons.

What is a structured settlement?

A structured settlement is a financial arrangement in which you receive your award or settlement money over time rather than all at once. The advantages of this arrangement include:

  • Tax-free: If you receive the money in a lump sum and then invest it, you’ll have to pay taxes on your investment earnings. If you set up a structured settlement, however, you’ll receive payments over a period of time, and each of those payments qualify as tax-free income.
  • Security: A structured settlement gives you financial security over many years, which can be especially important if your injury has hindered your ability to work or if you require ongoing medical care.
  • Protection: A structured settlement protects you from your worst instincts. If you were to receive the $300,000 all at once, for instance, you may make bad financial decisions that would leave you in financial trouble in the future.
  • Flexibility: Most structured settlements are set up with your preferences in mind. You may elect to have the payments sent to you over a period of 10-15 years, or even over your lifetime.
  • Beneficiaries: If you accept a lump sum, there is no assurance that money will be left after your passing for any of your beneficiaries. A structured settlement, however, can be received by a

    named beneficiary.

When settlement loans may come in handy

If you arrange with your attorney to receive a structured settlement, instead of paying you directly, the defendant will purchase an annuity policy to provide the payments to you. The payments are guaranteed by insurance companies.

What if something happens down the road and you find yourself in a financial crisis? You won’t have to regret your decision to take a structured settlement. In that case, you can consider what’s called “settlement loans ” or a “structured settlement loan .” These are arrangements when you can actually gain access to your settlement money at no risk to you.

How a structured settlement loan works

If you find that you need a larger sum of money than the amount that your structured settlement provides on a periodic basis, you can obtain a cash advance on that settlement. Settlement loan companies that have the cash on hand send it to you in return for the interest they may earn in the future.

Though often called “settlement loans,” these cash advances are not really loans at all. You don’t have to pay interest on them, and you don’t have to pay the money back. It’s your money to begin with. Settlement loan companies like LawStreet Capital simply obtain information on the settlement from you, and then go to work getting you the best payout possible. You have no out-of-pocket expenses, and there is no risk to you.

Applying for a lawsuit settlement loan

If you or a loved one have been receiving a structured settlement, but are now facing serious financial difficulties, contact LawStreet Capital today. We offer the lowest rates in the industry on settlement advance loans. Once you’re approved, we overnight the check to you or transfer the funds electronically to your account. To apply today, or learn more from our helpful representatives, call toll-free 800-345-8500.

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