Structured Settlements

Structured Settlements provide a very good vehicle for providing an extended payment stream to those who win lawsuits from a personal injury or many other lawsuits. By structuring the payments over a period of time, the plaintiff can be ensured of a guaranteed income for an extended period of time, while the defendant is able to settle the lawsuit with least amount of cost. Why are structured settlements the preferred model for making payments to plaintiff in a lawsuit settlement?

How are structured settlements setup?

A lawsuit can be a long and grueling process for both the one who was injured or harmed in some way and the defendant in the case. Many times these types of cases can be litigated for three, four and even five years. The length of the lawsuit can cause a lot of distress on both parties. First, the plaintiff most likely has medical or accident related bills that need to be paid, so the longer the lawsuit takes the harder it is to pay all the bills. It is also conceivable that it may be difficult to return to work after an incident due to injuries, loss of transportation or many other reasons. Most of the time the legal bills are deferred until the time of the settlement, so that doesn’t usually factor into the financial stress of the plaintiff. Therefore, the plaintiff may need to settle the case quicker and one of the ways to help settle quicker is by agreeing to a structured settlements.

For the defendant, they may have similar financial concerns such as legal costs, their own accident related costs and potential loss of income as they have to take care of the litigation. Although, a defendant should put forth the necessary effort to defend themselves if they believe they were truly not at fault, however many who are at fault may choose to agree to structured settlements because it no only allows the case to potentially settle quicker, but it can allow a much less costly model for the defendant. By being less costly for the defendant, the plaintiff may be able to negotiate a lot easier. Usually what happens is the defendant will purchase an annuity from an insurance or annuity company that will pay the payments to the annuitant over an agreed upon period of time. The annuity is purchased at a smaller amount then what the payments add up to over time which makes for a less costly model for the defendant.

While structured settlements are not the model excepted in every personal injury lawsuit they can be the best choice if the plaintiff and defendant want to have a vehicle for allowing an easier negotiation of terms. Structured settlements allow for potentially lower settlement costs for both parties, which is why thousands of cases are settled each year using structured settlement annuities.

What if the structured settlements no longer cover my needs?

While structured settlements can be a great way to receive a guaranteed income over an extended period of time, sometimes the financial situation of the annuitant may change and therefore they may need to receive some cash today from their future payments. Mainstreet Funding provides a low-cost solution to get some money now while maintaining a large portion of the future annuity. To learn more, contact one of our structured settlement specialists who will take the time to walk you through your options and get you the best price available.