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Why Do We Need Structured Settlements?

Structured settlements are becoming increasingly common in cases where large amounts of money are rewarded to people in various civil cases (such as medical negligence, personal injury and related claims). They are also the most common payout method when it comes to large lottery prizes. Let’s have a closer look at how these settlements work.

Why Do We Need Structured SettlementsImagine that you are awarded a large settlement in a personal injury case. The judge rules that it should be paid out in the form of a structured settlement, which means that money will be paid to you according to a predetermined schedule. You go ahead and negotiate a sizeable initial payment which pays all of the legal and medical bills, and then wait around for monthly or annual payments to arrive over the next few years or perhaps even decades.

In many ways, structured settlements are created to protect people from themselves – not everyone is good with managing large sums of cash, and receiving payments according to a schedule makes this problem go away. Structured payments are especially common in cases where the injured party is unable to work or requires long term care.

Can you sell your settlement for a lump sum of cash?

Now, some people would rather have the money paid to them in one go and spend it on whatever they feel like. This is certainly possible, although the process of selling a settlement can be lengthy and complicated. There are business (various financial and investment companies) that specialize in buying up long-term income streams, such as structured settlements, for cash. Here’s how it works:

  • You get in touch with a company that offers cash for settlements. They will normally ask you a few questions about your financial situation and the reasons why you need the money. This is needed in order to assess whether a judge is likely to approve or decline your claim, since all sales have to be approved in court.
  • If everything checks out and you are good to go, the company will file all required paperwork and start the sale process. It can take up to 3o to 90 days to complete a sale, so do not delay and act quickly, especially if you are likely to need the money soon.

Selling a settlement can be a superb decision, as long as you have a legit reason for needing the money and are prepared to spend it wisely.