If an individual who has experienced injury or loss files a lawsuit and wins over the offender, he is entitled to be paid an amount of money to compensate for the complainant’s injury or loss. The complainant and the offender can settle the payment terms through structured settlements. Structured settlements are installment payments of small amount of money over a predetermined period of time and these cash payments are always tax-free.
The structure of the periodic payment is designed and agreed upon to the advantage of the complainant. It is done to ensure the financial stability of the complainant in the future. The time period for payments can be designed such that payments are done monthly, bimonthly, quarterly, semi-annually or annually. The payment pattern can be done using only one of the time periods (for example, always monthly or always bimonthly) or a combination of the time periods (for example, bimonthly on first year, quarterly until fifth year, semiannually until tenth year and so on).
There may come a point when the complainant may realize that it will be more beneficial to receive a big amount of money than small amounts periodically. At this time, the complainant may decide to sell the future structured settlements payment for a lump sum amount.