If you are one of those people who have been having loads of questions as concerns future payments, then I believe this article will provide you with clear insights.
What is a structured settlement?
A structured settlement as the name denotes is a form of future payments that is structured to suit the needs of the victim and that of the defendant. Basically, this is a kind of payment which is paid in settlement annuity over a period of time and is particularly meant to offer reprieve to a person who has been injured or who has won a lawsuit. The settlement is legally binding and therefore the person making the payment is obligated under law to pay the cash without fail.
Is it possible to sell structured settlements?
Yes. Selling and buying of structured settlements is something which is allowed in law and is essentially at the discretion of the beneficiary. The beneficiary of this kind of settlement may at any time owing to the underlying circumstances decide to sell his settlement for a lump sum. Companies that buy such a settlement are known as factoring companies and play a pivotal role in helping out individuals who may not be interested in receiving fixed incomes over a given period of time.
Are structured settlements free from tax?
The good thing about a structured settlement as a source of income is the fact that it has major tax benefits. Unlike other sources of income that are privy to the applicable tax rates, a structured settlement payment or income does not attract any form of tax rates. This is particular beneficial or advantageous to the person who intends to use the fixed incomes for the purposes of meeting immediate needs.
Why should I resort to a structured settlement rather than a lump sum?
Resorting to a structured settlement is beneficial on various fronts. For starters, you are assured of fixed and reliable income for a very long period of time. You are also able to meet your immediate needs every now and then and this is very instrumental for individuals who might not be having any other source of income. The case of tax benefits coupled with the fact that one can cash out the structured settlement is another major advantage of this kind of settlements.
How do I cash out my structured settlement?
If you’ve made up your mind that you want to cash out your structured settlement for a lump sum, it’s instructive that you choose a reputable factoring company where you can fill out a form and request for a quote. You will then be given various quotes from which you can choose the most attractive for you. The last thing of course is receiving your cash after the hearing of your application which may last from 6 to 8 weeks.
In conclusion, you need to realize that structured settlements are beneficial in every sense. The above questions are designed to provide a bit of information to those who might be hearing this term for the first time
