How To Cash Out Structured Settlements

Let us first begin to understand what structured settlements are and what it means to cash out structured settlements. When an individual files a claim through a tort suit for compensation and the defendant and their lawyers feel that the case could go against them they file for structured settlements. This means that they do not have to pay the claimant a lump sum of cash instead they can opt to pay him or her installments of the amount over fixed periods of time until the entire amount has been paid out. This is known as a structured settlement.

It is structured because the payouts have to follow a certain structure such as a certain predetermined sum of money paid periodically where the period is also predefined by the courts of in an agreement signed by both parties. It is a settlement because the claimant agrees to let go of the lawsuit in return for this sum of money paid periodically until the total sum has been paid out.

Defendants offer claimants a structured settlement for three reasons. It could be that the defendant cannot afford to pay out a lump sum to the claimant or the defendant feels that the courts could deem the amount to be much higher than what is being claimed. The third and most often the actual reason is that the structured settlement payments have to be met by the claimant's insurance provider.


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