Structured Settlement: Deferred Payment Plan

2007-03-08 10:33:40

( Financial )



INSTALLMENT TERMS

A structured settlement is a legal term that refers to a staggered payment scheme of a financial obligation that is often a result of a civil case settlement like a personal injury, malpractice, or a product liability lawsuit.

In a structured settlement scheme, both parties agree to the payment terms and conditions set forth in the settlement papers. Under this arrangement, the payment is designed to be remunerated or given in regular, periodic installments which are spread over a considerable amount of time.

Most often, a claimant accepts a structured settlement because that is the only way the liable party can pay for the damages or injuries that the claimant has sustained. A structured settlement is a suitable compromise that gives the claimant his rightful dues, but does not ruin the life of the liable party as well.

CASHING OUT ON FUTURE MONEY

While a structured settlement does provide an equitable resolution and closure to lawsuits, some claimants, by virtue of their situation may need or want the lump sum right away. As an answer to the claimant’s problem, there are some companies that will buy your structured settlement in exchange for a cash settlement.

If you are the recipient or beneficiary of a structured settlement and want to cash out on it, you can approach these companies to sell structured settlement. These companies will purchase your structured settlement at a price lower than the total value of the settlement. In return for cash payment, these companies will become the beneficiaries of the structured settlement and will henceforth receive the periodic payments.

Some companies will give you the option of selling only a portion of your structured settlement and receive a cash payout on just a part of it. This way you receive a lump sum, and get to keep a portion of your settlement where you will still receive regular payments for.


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