Learn about different options for securing payment of a personal injury settlement
In many cases, winning the case is just the first step in helping victims get compensation for injuries inflicted by others. You still need to actually secure the cash awarded to you by the court. Here is a brief overview of what you need to know about getting paid following a successful personal injury case.
Getting Paid By an Insurance Company
When you win a settlement from an insurance company, the process of receiving your compensation is pretty straightforward. Typically the money will be transferred to you and your attorney promptly. If the settlement was pretty large, the insurance company may want to pay it out to you as an annuity. In this case, you will receive a portion of the award each year for the duration of the annuity. This option offers tax benefits because it reduces the amount of the settlement that you will have to declare as income on your taxes each year. It can also help ensure you are able to budget the money wisely for your future needs, and the annuity fund should give a better return on investment than if you had just placed all the money in a bank account.
Getting Paid By an Individual
If your case targeted an individual who was not insured, or if you have won damages in excess of their insurance coverage, receiving your settlement money can become more challenging. Basically, it comes down to whether or not the individual has the means and inclination to pay willingly. The two main scenarios would be:
- Payment Plan: Most people don’t have access to the sort of liquid assets required to pay off a personal injury settlement immediately after trial. What they can do is agree to a payment plan that will allow them to pay off their debt over time.
- Enforcing a Judgment: If the defendant refuses to pay or claims to be unable to pay, you may need to take legal action to secure your settlement. You can petition the court to take various actions to enforce the judgment, such as placing a lien on the defendant’s property or garnishing their wages.
What if You Need Cash Now?
If you need cash now to cover current medical expenses, there are various entities that will either advance you money against your expected settlement (during the trial) or buy out an annuity so that you can receive a lump sum payment (after trial). Before agreeing to any of these types of agreements, be sure to read the fine print carefully as you will likely be forfeiting a large part of the value of your settlement for the convenience of receiving your cash sooner.
