Simply put, a structured settlement is not a loan or a bank account, and the only way to receive money from your settlement is to stick to your payment schedule or sell part or all of your payments to a credited company for a lump sum of cash. Structured settlements occur when a claimant agrees to resolve a personal injury claim and receives all or part of the settlement through multiple payments. If you agree to take your compensation as a structured settlement, rather than receiving a large amount from the plaintiff, you will receive periodic payments over a fixed number of years. They are an advance of part of the purchase price for the sale of your structured settlement payments.
If you need cash right away at some point along the way, you may be tempted to turn to your structured settlement fund and take all the profits at once. By 1985, the National Structured Settlement Trading Association was formed to preserve and promote structured settlements for injury plaintiffs through education Structured cash settlements provide a stable and reliable cash flow, often for several years or even for the remainder of your life. Others liked how their annuity was structured for a time, but now they've found that having access to a lump sum of cash is more important. If you have significant debt, a structured settlement withdrawal can provide you with the necessary funds to help pay off outstanding balances and get you back on track immediately.
A structured settlement pays you money through a series of payments (known as an annuity) or a lump sum form of payment. Some agreements are designed to provide an annual income, with additional amounts allowed to pay for extraordinary expenses, such as college tuition. While there is a cost associated with withdrawing a structured settlement, there are also benefits to doing so. Whether this is an option for you or not will depend on the company purchasing your settlement payments and your criteria for granting cash advances.
From there, structured agreements made their way into common law legal systems, including England, Australia and the United States. Choosing between a one-time payment and a structured settlement can have long-term tax and personal consequences. Collecting a structured settlement generally requires a judge's review and approval before finalizing the sale.