If you or a loved one has sustained an injury or damages as a result of an accident caused by someone else’s negligence, you may be entitled to compensation from the defendant. Structured settlements are a form of compensation, in which your attorney, the defendant’s attorney and a third party such as bank or a judge, may suggest that paying installments as opposed to a large lump sum, is the best way to pass judgment on the defendant. Cases that can be resolved out of court, free up the resources of the court for other matters.

The reason this type of settlement is called a structured settlement or periodic payment, is because installments are made over time, instead of one lump sum. Structured payment settlements were initially started in United States and Canada during the 1970s era as a substitute to the lump sum settlement agreement.

Structured settlement is based on a schedule of payments that are spread out over time. The time frame for a structured settlement can be weeks, months or years. The goal is to provide a fixed income for the defendant as compensation for not being able to work. There are many benefits to structured settlements, which in turn is why plenty of people take the structured settlement route over lump sum.

One of the biggest benefits to using a structured settlement over a one shot only settlement is tax avoidance. Since the payments are spread out over time, the plaintiff will be taxed less or not at all depending on the arrangement. On the contrary, in a one shot only settlement the plaintiff will have to give half of their benefits to the government due to taxes. For example, a settlement awards a plaintiff $500,000. If the plaintiff and defendant agree to make monthly payments of $25,000 they won’t be taxed. However, if the plaintiff wants a $500,000 one shot only settlement, they may have to pay as much as $250,000 in taxes, which by all accounts, may not be enough to pay your medical bills.

A structured settlement allows for the courts to permit a plaintiff to not need to pay taxes on their received payments. Structured payments can also help plaintiffs from themselves, as the schedule also requires that the plaintiff use the money for their accident, and not to go on a vacation for a year.

The disadvantage to structured settlements is that the accident victim can’t spend on things not pertaining to their case. Meaning to say, if a person wants to buy a new car, they can’t use the payments from their settlement to do so. It also protects from temptation to waste the money or spend it foolishly and from borrowers who may be attracted by a lump sum. A structured settlement allows the \”winning\” party to receive a large amount while still making payment affordable for the other party.

This has become a preferred means of resolving civil disputes because its advantages to both parties make a truly equitable resolution more possible.

Trying to find personal injury lawyers in Toronto? Then be sure to check out www.personalinjurylawyersintoronto.ca and find out more information on how these expert Toronto injury lawyers and accident lawyers Toronto can help you with your case!

Trying to find personal injury lawyers in Toronto? Then be sure to check out www.personalinjurylawyersintoronto.ca and find out more information on how these expert Toronto injury lawyers and accident lawyers can help you with your case!
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Author Bio: Trying to find personal injury lawyers in Toronto? Then be sure to check out www.personalinjurylawyersintoronto.ca and find out more information on how these expert Toronto injury lawyers and accident lawyers Toronto can help you with your case!

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