What are the pros and cons of a structured settlement loan? How does it work & can it be for less than the entire settlement?

Asked about 2 years ago - Lake Ozark, MO

Workman's comp structured settlement, for a small amount every month. Would like about 10,000,which is about equal to three and a half yrs of monthly pmts from work. Comp. Is it worth it?

Attorney answers (3)

  1. Spencer Edward Farris

    Pro

    Contributor Level 13

    2

    Lawyers agree

    Answered . I don't know what you mean by a structured settlement "loan." If you mean taking your lump sum settlement and structuring it, the main benefit is that the interest from the money can be protected from taxes, vs. just putting the settlement in the bank and letting it accrue interest. Also, structures usually return better than putting the money in the bank and holding it, especially at the current low interest rates.

    The cons of a structured settlement is that you can't get to your money in an emergency, unless you break the structure or sell it, and you lose a lot of money if you have to go that route. Structures are a great idea for young people, or folks who want a guaranteed return.

    While we hope this information is helpful and informative, it should not be considered a substitute for legal... more
  2. Melvin G. Franke

    Contributor Level 13

    Answered . It depends upon the numbers

  3. David J. McCormick

    Contributor Level 20

    1

    Lawyer agrees

    Answered . I agree with Attorney Farris. Also, if you are looking for a, advance type loan on your case beware!! First of all I do not know of any company that does them for worker’s comp. claims. Second, these loans have extremely high interest rates and I always advise clients to stay away from them at all costs.

    DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being... more

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