Structured Settlements - FAQ
Structured Settlements - FAQ:
"Structured Settlements FAQ
Can I use my structured settlement as collateral for a loan?
Generally, the answer is no. The laws regarding structural settlement are designed to protect you from abuse, and the ability to use the structured settlement as collateral would void that intended purpose. The payments however, can be claimed as a form of income so that if you want to buy a house, the payments represent the same financial ability that a take home paycheck of the same amount would provide.
Once in place, can a structured settlement agreement be traded back for a lump sum settlement?
No. You are given special tax treatment with regard to the structured settlement proceeds, and you cannot then take that in a lump sum fashion and invest it again.
Do I get interest on my structured settlement?
No. The interest is a part of your structured settlement agreement and is therefore, tax-free. You do not then get interest on top of that. This however, is not to say that if you get your regular structured settlement payment and don�t spend all of it, that you cannot invest that remainder into another account and draw interest from that. That interest however, would be taxable.
I see ads for turning my cash payments into a lump sum. Is that like renegotiating the structured settlement?
On the surface, they may sound the same, but they are not. The structured settlement may not be paid out in any different fashion than initially agreed upon. What these ads talk about is selling the payments to them. They would receive the payments just as you would have over time.
What they do for you is to buy them for a far lesser amount than the gross proceeds than you would get over time. Remember though that they are taking certain risks that are attached to inflation, and they also need to ma"
"Structured Settlements FAQ
Can I use my structured settlement as collateral for a loan?
Generally, the answer is no. The laws regarding structural settlement are designed to protect you from abuse, and the ability to use the structured settlement as collateral would void that intended purpose. The payments however, can be claimed as a form of income so that if you want to buy a house, the payments represent the same financial ability that a take home paycheck of the same amount would provide.
Once in place, can a structured settlement agreement be traded back for a lump sum settlement?
No. You are given special tax treatment with regard to the structured settlement proceeds, and you cannot then take that in a lump sum fashion and invest it again.
Do I get interest on my structured settlement?
No. The interest is a part of your structured settlement agreement and is therefore, tax-free. You do not then get interest on top of that. This however, is not to say that if you get your regular structured settlement payment and don�t spend all of it, that you cannot invest that remainder into another account and draw interest from that. That interest however, would be taxable.
I see ads for turning my cash payments into a lump sum. Is that like renegotiating the structured settlement?
On the surface, they may sound the same, but they are not. The structured settlement may not be paid out in any different fashion than initially agreed upon. What these ads talk about is selling the payments to them. They would receive the payments just as you would have over time.
What they do for you is to buy them for a far lesser amount than the gross proceeds than you would get over time. Remember though that they are taking certain risks that are attached to inflation, and they also need to ma"
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