Personal injury lawsuits occur when an individual is injured due to another’s negligence or recklessness. In these cases, the victim may file a lawsuit in order to recover compensation for their physical and emotional injuries, lost wages/employment, as well as damages stemming from the accident. The most common types of personal injury cases typically include wrongful death, medical malpractice, slip and fall cases, and car accidents. Per the Centers for Disease Control and Prevention (CDC), There were over 92 million visits to doctors offices and 41.6 million emergency room visits involving injuries last year.
Claims will vary based upon the severity of the injury, which will also determine the type of payment you will receive. Many personal injury cases are settled outside of court with all parties coming to an agreement on terms, but there is always the possibility of the parties needing court intervention. Either way, if you’re owed money from one of these lawsuits, it will be paid either through a lump-sum payout or a structured settlement.
What is the Difference?
The major factors in lump-sums Vs. structured settlement payouts are long-term financial security and tax liability.
With these payouts, the injured party will receive the total amount of the settlement at once. With this type of payout, there is a risk for the money to be spent very quickly due to having a large amount of immediate cash. It’s important to consider your spending habits, financial knowledge/skills and your tax obligations prior to accepting a lump-sum settlement. Otherwise, you may quickly find yourself in financial ruin.
These are financial arrangements, negotiated and settled for the victim. In these settlements, the victim agrees to receive their compensation over the course of multiple payments. The important factors to consider prior to accepting this kind of settlement are what kind of payment schedule you need to be on, whether there will be interest that increases the payments over time, or whether the payments may decrease dependent on certain factors over time.
It can be complicated to determine what kind of settlement would be best for you, so having a knowledgeable personal injury attorney on your side to fight for you and guide you will help ensure you choose the right path.