Structured settlements were created by Congress in 1982 for the security of personal injury victims who receive monetary awards. Many individuals would poorly manage a lump sum amount and then have nothing to repay medical bills or living expenses. Paying out the money in installments assures the victim is compensated securely.
When an injury occurs, one may have long-term effects that prevent them from working or acquiring normal income efficiently. Structured settlements help provide for daily living expenditures and any needed health care. If a victim has died, the guardian of any minor children will receive the payments to insure they receive proper care. An upfront cash distribution is usually made to the victim for immediate expenses and a payment arrangement is scheduled by an insurance company for the remainder of the settlement. When an individual finds a need to have the cash sooner than reflected on the payment schedule or a large expense has incurred, they can receive a loan against the structured settlement.
Younger individuals may need the money due to illness, accident or loss of employment. Stretching a payment schedule out over several years may not be in their best interest. Younger individuals may need the money due to illness, accident or loss of employment. Stretching a payment schedule out over twenty years may not be in their best interest.
There are a variety of ways one can obtain a loan. Agencies will usually work with clients to buy a set number of payments or the remainder of the settlement. An individual may only need funds from 8 or 9 payments to get them through a financial crisis. Fees are determined based on the schedule accepted by both parties, the financial rating of the purchasing company, and the size of the monetary amount. Receiving a loan is not a quick process and could take up to 90 days. Applications have to be approved in a court of law, but may not require the individual to be present.
Always consult an attorney or accountant before obtaining a structured settlement loan. Be sure any financial institutions recommended specialize in legal funding, have years of experience, and are reputable. Talk to experts who can help you shop around for the best quote and loan options tailored to a specific need. Once a contract has been completed, have an attorney look over the legalities. Beware of scams offering outrageous deals. The loan may sound good, but ultimately you can be left with no money. Only utilize agencies that have legitimate backgrounds and can provide positive references.
