When you learn that you are going to receive a
structured settlement, a lot of times you have
questions about what a structured settlement is. So
here are some of the more frequently asked questions
about structured settlements.
Structured Settlement Questions
1. What is the definition of a structured settlement?
A structured settlement pays the person who has won
the settlement over a period of time, instead of just
paying all at once.
Structured settlement payments are sometimes called “periodic payments.” Often the structured settlement will be created through the purchase of one or more annuities, which guarantee the future payments. So, normally you will need to investigate, not only structured settlements, but annuities as well.
2. Am I able to put down structured settlements as
collateral for a loan?
Usually, it can’t be listed as collateral, but one way
that it does help is that you can list it as a form of
income. This can be very helpful if you are making a
big purchase, like a house.
3. Will I receive interest on money I get from a
structured settlement?
No. The interest is included in the structured settlement agreement and is therefore, tax-free. The only way to get additional interest, is to invest your structured settlement payments. Of course, that money would be taxable, just like any other investment.
Make sure you ask questions if there is something that
you don’t understand.Be sure that you understand everything and that
everything is clear to both you and to your attorney.
Once the papers are signed, it’s non negotiable and
you have to be happy with what you have been given, so
it’s a good idea to be clear on all the details. Ask
all of the questions that you want to know, and get
all of the facts.
There are ways to “cash” out your settlement, which we’ll discuss in a later article.
