If you are just being awarded a structured settlement you may have a lot of questions about how purchasing settlement payments works. Our site is full of information to answer all your questions, but this article will give you a few basics about the law of purchasing structured settlement payments. We will also talk about how the laws have changed in recent years. This can benefit those of you who may have experience in structured settlement from years ago. But it will also inform you about the law if you currently know nothing at all.
The Older Laws - Before the Changes of 1982
Prior to 1982, most personal injury law suits were settled with a single lump sum payment to the plaintiff. This means that the judge ruled the personal injury case in favor of the plaintiff. Then, the judge awarded damages for medical bills, pain and suffering and so on; the injured plaintiff was given a single lump sum of cash. In 1982 the U.S. Congress passed a bill that encouraged judges to award personal injury settlement payments as structured payments. This means that now most personal injury cases do not pay a lump sum. Rather, that lump sum is deposited into an annuity. The injured plaintiff then receives money from that annuity every month, quarter or year. These payments continue for a set period of time.
From 1982 to 2002 there was Little Regulation of Purchasing Structured Settlement Plans
It was not long before people started to somewhat rebel at the idea of receiving small amounts of money instead of a large lump sum. Structured settlement factoring companies were opened for purchasing structured settlement payments. For two decades these companies were able to directly assume annuity payments, with no court regulation. But the insurance companies that granted the annuities started to worry; they wondered if purchasing structured settlement plans might make them taxable. In 2002 the government dealt with this issue.
The New Law after 2002
In 2002 settlement structures started to change. Now, extensive contracts are required when a structured settlement is originally made. In addition, purchasing structured settlement plans is now regulated by the government. Before any structured settlement factoring company can engage in purchasing structured settlement plans they must have approval from the court. The courts are usually good about approving these settlements. Often, they ask the person who is receiving the payments why they want to cash out and what their plan for the money is. The structured factoring company usually deals with all of the paperwork and court fees associated with purchasing structured settlements. With Direct Settlement we do almost all the work, making the process extremely easy for you.
Making Your Move
Deciding whether to keep your structured settlement or choosing a company to complete purchasing the structured settlements from you is a challenging decision. Think about it. Do your research. But do not be surprised if you find that selling your payments makes the best financial sense for you. If you do decide to sell your payments know that the law makes this perfectly legal. Direct Settlement can help you through the entire process, getting you your money fast.
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How can you Sell Your Settlements?
You can also cash in Annuities