How Are Personal Injury Settlements Paid?

If a claimant is successful in suing for financial compensation after being injured, they may expect payment for the costs associated with their injuries. However, a defendant may be entitled to two payment options, depending on their ability or desire to pay in a particular way. These two options vary significantly and considerably affect how a person receives the compensation theyve won.

Structured Settlements

In most cases, a defendant will pay through what is known as a structured settlement. In paying this way, a defendant will be responsible for paying the full compensation amount over a fixed period of time. While this means that a claimant won’t have immediate access to their total compensation sum, they will receive regularly scheduled payments over a series of installments.

If both parties agree, defendants may use third-party groups to assume payment liabilities, ensuring regular payments when such liabilities could prove difficult to maintain.

Structured settlements are particularly popular if settlement amounts are high. As people or companies may be unable to financially deal with the immediate loss of thousands, if not millions, of dollars as the result of a lawsuit, the structured payment system is usually the best option.

Lump Sum

If a defendant doesn’t pay through a structured settlement, they’re expected to provide the full compensation amount at once. A lump sum payment is just that. A claimant will receive their entire compensation sum in a single payment, clearing the defendant of any further responsibility as per the agreement or court decision.

As many settlements for injuries cover expensive treatments or recovery needs, lump sum payments aren’t always popular for personal injury cases. However, smaller compensation sums or defendants with massive financial backing may prompt a lump sum payment.

Next Steps for a Compensation Claim

If you’ve sustained an injury and are looking for more explanations about what to expect with a compensation claim, a legal advisor may be able to help. For more information about how personal injury lawsuits work, contact a Wausau, Wisconsin personal injury lawyer today.