What is a structured settlement?
A Structured Settlement is a financial arrangement that a claimant accepts to resolve a personal injury claim or to compromise a statutory periodic payment obligation. Structured settlements may include income tax and spendthrift requirements as well as benefits. Structured settlement payments are sometimes called “periodic payments.” A structured settlement incorporated into a trial judgment is called a “periodic payment judgment.”
Why do we need Structured Settlement?
To provide liquidity to owners and holders of periodic payments resulting from legal judgments, lottery winnings, individually owned annuities, royalties, government and commercial contracts and other secured future payment obligations.
Who provides this service?
Settlement Capital Corporation provides you this service to care of your periodic payments and take care of many hassles. They have been a leader in the industry for 18 years and continue to pioneer in this field of specialty financing.
How does a STRUCTURED SETTLEMENT function?
In an assigned case, the company does not wish to retain the long-term periodic payment obligation on its books. Accordingly, the insurer transfers the obligation to a third party. The third party, called an assignment company, will require the company to pay it an amount sufficient to enable it to buy an annuity that will fund its newly accepted periodic payment obligation.
If the claimant consents to the transfer of the periodic payment obligation the company has no further liability to make the periodic payments. This method of substituting the obligor is desirable for companies that do not want to retain the periodic payment obligation on their books.
It also has taxation benefits, if the assignment falls under Section 130.
