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Structured Settlement Payments - Be Careful!
What is a structured settlement? My co-worker and I were talking the other day and he brought up something called a structured settlement. I had no clue what a structured settlement was so i decided to do some research. At first it looked like they are something that ambulance chaser lawyers use to make money off of, and still does to me in some cases, but for other people, structured settlements sort of work well and are needed. They help certain people but I am sure do a ton of damage to others so I have mixed feelings on the use of a structured settlement.
So what are Structured Settlements?
A Structured Settlement is an agreement to pay an amount of money to an affected person for personal injury, damage or because a money hungry lawyer decides that a company did something wrong when in reality it was a person's own fault and obvious to the rest of the world. The first structured settlement, according to wikipedia, was in Canada and awrded because there were a ton of kids affected by a sedative called Thalidomide. Apparently the thalidomide was able to cause birth defects and that is something that the kids were unable to defend against. I am also assuming that parents did not know better, but because the kids won, it looks like the company who produced the thalidomide may have known or didn't test enough and let it go to market. I don't know all of the facts but this is what I gathered and in this case I would agree that if the defects were bad enough, the structured settlement was more than necessary.
Why are people, especially lawyers so interested in Structured Settlements and structured settlement cases?
This is again just my opinion, but if the court is able to award a monthly payment amount to someone, that would be easy money if the lawyer wins the case. If it is on a large enough scale that could make a lawyer's firm skyrocket, as well as their pocket books. There is also something called a lump sum structured settlement.
Instead of regular payments at pre set intervals, the person receiving the money or insurance benefits from their structured settlement case could opt in for a lump sum payment. The lump sum is a one time payment and if a Lawyer can convince the person to take the lump sum and the lawyer gets a percentage of what the final amount is, that is instant easy money for them. They basically know the person is owed a certain amount of money because they won the case in court. If they get paid a percentage of the amount owed to the client in a lump sum structured settlement, then convince their client to take the lump sum, they get paid a nice chunk of money at once instead of just getting paid during the hearings. It may sound jaded but this is how I am interpreting why lawyers love lump sum structured settlement cases. For the record, I am not a lawyer and cannot say this is 100% correct and is definitely not legal advice.
When do I think structured settlements are justified?
When someone has actually been wronged. The thing about a structured settlement is that if a company knowingly released a product that would cause a person who was able to and did work to not be able to work any more, they need to be able to survive. If that person was hard working and can prove they were hard, dedicated workers, or if they were unemployed can prove they were dedicated workers and actively were searching for a job, and now they are hurt, damaged or unable to legitimately work (not some excuse like add or stress) then the company who damaged them should have to support them. If the person's job was graphic design and they can no longer see because of a medication or they were workers on an assembly line or a chef and their medication caused paralysis so they can no longer do their jobs or support themselves, they should be rewarded with a structured settlement so they can survive and live their lives. What concerns me though are the people that get convinced to opt in for a lump sum structured settlement.
Here are what I see as the advantages and downsides of lump sum structured settlements vs. a traditional structured settlement paid over a period of time.
Lump Sum structured settlement.
For me a lump sum structured settlement is like sending a gambler to vegas with their life savings. They are given a lump sum of money instead of payments over a period of time because they are damaged or unable to work any longer. Because this could be the last income they ever have, until social security kicks in, most people cannot control themselves. if they start buying cars, upgrading their houses, etc... they could waste their money fast and end up homeless and unable to work. Not to mention in serious debt. Think about how many people already have debt. You give them a huge amount of money and they go crazy and spend or waste it all. I don't think most people could be responsible enough to handle or have a lump sum structured settlement. Instead I wish lawyers and other people would force them into giving it to something like a savings that pays interest and the person can live off the interest plus part of the settlement so they have it for life. This way if the person who went with the lump sum structured settlement cannot work, they have income coming in every month until they die. Then they can choose to give the remainder to their kids or donate it to charity.
Structured Settlement payments instead of lump sums.
The payment system is the way I think people should go. They get a stable source of income coming in, unless the company goes under or looses all of its assets. The risk with taking these payments is that companies aren't always around forever. If the company goes under and there are no assets or funds, you could end up without any money and unable to work and support yourself. If that would happen you are sort of screwed, unless you have family or friends that will take care of you. It is a scary thing to depend on a company to have to support you, especially if they aren't doing well. If they also have to pay out other structured settlements, it could bankrupt the company and everyone could lose, even the people who benefit from the company. That is why I don't like structured settlements because I am sure there are lots of frauds out there collecting them when in reality they should have never done it.
Why I disagree with some structured settlement cases.
If a group of people win a structured settlement case and they weren't really hurt or effected, there are tons of people doing this, they are putting companies out of business. Those companies support people and their families, they produce products and services that actually help others and because that one person or small group of people are greedy and found scum bag lawyers, they are now possibly hurting millions of people for personal gain. It is horrible bad and something that unfortunately we allow to continue.
I personally think that when I see billboards and commercials for these structured settlement lawyers on tv I want to cringe. They are specifically targeting pharmaceutical companies which do good for millions on frivolous cases. They are ambulance chasers and out for free money which will hurt everyone else in the world. When they win these fake cases they up the price of medications for people that really need them. It is disgusting how many people want to take the money and could care less about the people who rely on the other sides of the business to survive. Some people have been legitimately hurt by these companies and they deserve the structured settlement, but if you only think you are hurt because you saw a commercial on tv or a billboard, in my opinion you are a scam artist and a horrible person. Watching an older woman cry in CVS because she couldn't afford her medication was horrible and I chipped in for her, but it is people that join those lawsuits for ambulance chaser lawyers going after pharmaceutical companies and insurance companies that cause them to struggle, live in pain and die. I see the good and bad in structured settlements and my own opinion is that most fo the ones i have seen are fake and should never have been won. That doesn't mean that there aren't many legit ones, but I am seeing tons of bad ones now that i know what a structured settlement is. If you feel differently or agree, feel free to leave a comment below about your thoughts on a structured settlement.