What Happens When Your Structured Settlement Doesn’t Make Ends Meet

There are some financial situations they don’t teach you in school. Many aspects of the adult financial life are specialized, reserved for a few people who don’t see the problem coming before it surprised them. One of these are the financial realities involved in structured settlements. Structured settlements are a way of organizing legal reparations. If a person sues a business because they were injured while on that business’s property, that person would take the business to court. The business owner might know that there’s no chance they’re going to walk away without paying the full damages asserted by the plaintiff. To avoid the public embarrassment and high cost of a legal battle, the business decides to settle out of court.

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In a room with both parties and their lawyers present, a deal is made. The deal is rarely disclosed to the general public, but is determined through the deliberations of the present legal team. The business might give the plaintiff $80,000 for their pain and suffering, and the person might take it gladly. But this payment isn’t usually as simple as the business handing over a lump sum, piles of cash in a briefcase. The deal is made to be more formal.

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In some cases, a lump sum payment is paid, usually from one bank account to another. In many other cases, however, the payment is released little by little, in what is known as a structured settlement. This settlement will be paid out at monthly intervals, or at whatever frequency is determined by the legal team. This is a good option for many people. Rather than being tempted with a mountain of cash to be spent recklessly, the person can have their cash dispensed gradually. This makes it last longer, and hopefully will increase the plaintiff’s standard of living over the long term.

Unfortunately, this isn’t the way things always go. People who sue other people or businesses often do so because their own financial standing has been compromised. Imagine the injury from our example above. The plaintiff might not be able to work, for a long time or forever. With that income removed, and monthly payments of only $1200 coming in, a structured settlement turns out to be a poor remediation for damages. For people like this, a lump sum might have been more appropriate, but once the documents have been signed, there’s no way to reverse it.

Reversal may be impossible, but selling the structured settlement is not. Einsteins Settlement Company is an example of one such company. They buy many structured settlements for a portion of their actual value. This gives the seller the benefit of maximal cash in hand at once. It gives the companies the benefit of greater value over the long term. Everybody wins. For people with structured settlements who find themselves unable to keep up with life under the new financial model, there is no better way to handle the situation than to sell. Do your research and get the best quote you can, then sell with confidence and get the money you should have had in the first place.