Structured Settlements

What Is A Structured Settlement?

What exactly is a structured settlement?  A structured settlement is what can be created as the result of the resolution of a personal injury lawsuit or some other kind of lawsuit involving a liability case.

When one party sues another party in a personal injury or liability case for damages and wins the lawsuit, this winning party would then be owed the money for which the party was suing.  This money can be paid by the insurance company representing the party that was sued and is often paid out over time in periodic intervals (such as yearly).

Structured Settlements Within The Cash Flow Industry

The creation of a structured settlement for the winner of a lawsuit basically creates a new income stream for this individual.  However, receiving payments over time may not be ideal for this individual who might have wanted to receive a lump sump payment.

The desire for a lump sum payment instead of a structured settlement at the end of lawsuit creates a market within the cash flow industry for people to sell structured settlement payments. 

You have probably seen one of what seem to be either during-the-day or late-at-night commercials that are by companies that want to pay cash for your structured settlement payments.  Now you know what those commercials are all about.

Why There Exists A Market For People To Sell Structured Settlement Payments

There could be many reasons that someone with a structured settlement would want to sell their payments for a lump sump cash payment.  That money could be used to pay off old debts, to put toward a down payment for a new house, to buy a new car, or to start a new business.  These are examples of things that would be difficult to do with the smaller structured payments without having to wait to receive at least a couple of these payments to build up the necessary funds.

The reason there exists companies that would want to offer you cash for your structured settlement payments should be obvious.  They want to earn a profit and they do that through purchasing payments at a discount. 

A company would offer a lump sum payment that is some amount less than the total of the payments that have been purchased.  This is so that when this company receives the total of the payments that were purchased, not only will the company get their money back that it put up as the lump sum payment but also it will keep the difference between the lump sum payment and the total of the individual payments as its profit.


How To Sell Structured Settlement Payments


 

 


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