If you have had a personal injury case decided in your favor, you may receive what is termed a structural settlement. This is a settlement for personal injury damages that isn’t a lump sum payment but rather a series of payments over time.
If you are injured and win your case for damages, you may be awarded a structured settlement rather than a lump sum payment. Lump sum payments were quite common in the past but structured settlements are gaining in popularity.
It works like this. When you are injured and you press a lawsuit against the other party, the other party is found liable and you are awarded damages. The settlement damages are then scheduled for a payout over time. It is like you are a creditor, and the liable party has to make payments on what they owe you, although they do not pay interest on this. It simply breaks down the amount owed into regular payments.
Personal injury damages paid in payments can take various structures, but generally are paid each month. The full length of payout is often a number of years.
When you get a structured settlement, it has some benefits for both sides (liable and injured parties). The injured party is assured income over time and for that period at least has a steadier financial outlook.
When you get a structured settlement instead of a lump sum payout, it can help to ensure that you have money coming in over the full length of time you are still having effects from your injury. You may not know how long this will be, and if you get – and spend – a lump sum settlement, then there is nothing else coming in to cover your medical needs or replace lost income.
On the side of the liable party, this is also a benefit. There is a tax reduction because of the structure of the payout. So the tax would be reduced across this period.
When you have a personal injury case, a structured settlement may be your best option. It helps to know how these work. Such a settlement can ensure you have income over a long period of time, which can really be a major plus.