Loans For Structured Settlements

Loans for structured settlement can be a lifesaver to someone needing cash sooner than the court ordered payments can begin, or to someone who simply doesn't want to wait out the structured payment plan. Anyone who wins the lottery, a personal injury lawsuit, a wrongful death suit, or workers' compensation case that results in being awarded a large sum of money, the payment will most surely be set up as a structured payout. Laws have been passed to this effect so that people unused to managing large sums of money will be forced to budget expenditures instead of going on a spending spree. This happened many times before such legislature was passed. The funds intended to take care of a person's medical bills over a lifetime were spent in other ways and the medical bills didn't get paid after all.

Generally speaking, this system works well and is in the best interest of the receiver of the funds. However, in the case of an elderly lottery winner or winning plaintiff, it makes little sense to have payments stretching over twenty years. That person would rather have the funds now, and invest them for the benefit of his heirs. A structured settlement loan may be what that person needs. There are companies that will, for a fee, advance the full amount won to the winner, and accept assignment of the payments in return. This way the winner receives the money, and either the defendant or the state lottery commission repays the lender with the structured funds.

Structured settlements are a guaranteed source of funds paid to the claimant or his/her family on a tax-free basis, according to Section 104(a)(2) of the U.S. Internal Revenue Code. Structured settlements usually are set up in two parts. An up-front cash payment is made to the plaintiff/winner to cover immediate expenses, then the balance is set up in regular payments over a period of time. Sometimes there is a need for more of the funds to be available much sooner, and that's where loans for structured settlement come in. It must be kept in mind, however, that it will probably take about 90 days for the loan to be processed and funds distributed. Court approval must be obtained, although in most cases personal appearance isn't required.

Some companies offering loans for structured settlement will work with a client to buy all remaining payments, a partial number of payments, or a percentage of the payments. There are variables related to the payments that will determine what fee will be charged for handling the transaction. The financial rating of the insurance company making the payments, the size of the transaction and how far into the future the payments extend, all affect the amount the borrower will receive.

If the plaintiff has already received a few payments, and then something happens that makes him want to have the entire rest of the payments soon, one of these lenders can be brought into the picture for a structured settlement loan. Actually, arrangements can be made for a specific portion of the payments if that would satisfy a person's needs. Perhaps five or six payments would be enough to get a person through whatever difficulties have arisen, and then the regular payments could be resumed. 

With so many ways to set them up, loans for structured settlement cases can fit the needs of just about anyone involved in this kind of proceeding. When the lottery winner or triumphant personal injury plaintiff is a young person, structured payments are a good thing. They will provide assurance that the recipient will have funds for a good many years to meet his needs and make investments that will assure a comfortable retirement. Since so many young people have little experience in handling large sums of money, the system is a safeguard. Some of them may not want to look into a structured settlement loan, but hopefully, there are wiser heads to advise them. Wisdom is indeed a much needed commodity. Scripture mentions it many times. "My mouth shall speak of wisdom; and the meditation of my heart shall be of understanding." (Psalm 49:3)

       Anyone considering loans for structured settlement payments should, of course, consider carefully what they intend to do with the large sum of money they will receive. Lottery winners are usually written about in the local newspapers, and once it is known that the winner has been awarded this phenomenal sum of money, there will be all sorts of scam artists trying their best to relieve a winner of that money as fast as possible. The temptation to be caught up in a too-good-to-be-true scheme will be less if the money on hand is not so great. A structured settlement loan, if not really needed, sometimes puts common sense and planning for tomorrow way below the "wants" of today.