Whether you negotiate prior to filing a lawsuit or you reach an out-of-court settlement while pursuing a lawsuit, you'll have to decide how you receive the settlement funds. A structured settlement is one type of settlement received in a personal injury case. Instead of accepting a lump sum payment, the settlement amount is disbursed over a fixed period of time. The structuring of these payments can vary.
How a Structured Settlement Works in a Personal Injury Case
When reaching a settlement in a personal injury case, it's important to create a payment plan that best fits an individual's needs. There are many different ways a structured settlement can work. Let's say an accident victim needs a large amount of cash right away to pay for the medical bills incurred. The initial payment could be larger than future payments.
Other options may include delaying, increasing or decreasing payments. Many different factors will determine the best way to spread out the settlement. For instance, someone might want to ensure there's enough money for lost wages while recovering from injuries. Others might want to put money aside to pay for college.
Choosing between a Structured Settlement and a Lump Sum Payment
There are advantages and disadvantages to both, which is why it's important to seek advice from a financial expert if you reach a very large settlement. For example, a lump sum amount sounds tempting.
But if the claimant doesn't have the ability to discipline his/her spending, it could be gone in a short amount of time. An example of a disadvantage to a structured settlement is when a sudden need arises related to the accident injuries; the structured payments may not fully cover the expense.
Talking with an attorney can help in choosing the right type of settlement. But legal counsel can also help with negotiating the amount of the award. How the money is paid out will only matter once reaching a fair settlement. It's critical to make sure the settlement addresses all financial, physical and emotional losses.
Call the Miley Legal Group in Clarksburg for legal help and consultation. Contact us at 304-931-4088 or use our online contact form to set up an appointment.