Getting a Lump Sum Settlement The more money that is involved in a claim, the less likely it will get settled with a lump sum settlement. Many parties and organizations simply don't have a couple million dollars sitting around to pay off a claim in one shot. If an obligation can be met by paying over time, it essentially creates a credit card account for the payer. The bill still has to be paid, but not right away. From an accounting perspective, lump sum settlements are bad news, particularly if there are no immediate reserve funds to deal with the claim. A business would have to scramble to come up with ready cash if it were always required to pay off claims with lump sums. This could mean selling off client accounts, accounts receivables, and assets just to meet the liability. When faced with this sort of option and other debts at the same time, many look to bankruptcy for protection and to kill the claim legally. For injured parties, a structured settlement technically pays the claim involved, but the party doesn't see the total funds right away. If there are significant bills and debt resulting from the injury, the structured payment won't make them go away, forcing the party to use whatever funds are available to absorb an unexpected hit. To solve this problem, many consider selling the rights to a structured settlement for cash up front. However, to make this profitable for the purchasing investor, the injured party has to give up some of the value for cash payment. This in turn makes the structured settlement purchase profitable for the purchaser. Parties can try to have a lump sum settlement occur but ultimately a legal settlement only occurs when all the parties involved agree to it. If the settlement doesn't work for the defendant, then it won't happen. They will instead try their chance in court. So an injured party then has to resort to the second option if funds are needed right away. In the end, the only party to get their funds up front right away typically includes the attorney representing the client. The attorney's fees are usually a separate payment from the general claim itself. All of the above said, the majority if injuries that range from small to medium cost size tend to get paid by lump sum. Most companies can handle claims up to dozens of thousands of dollars via their insurance plans or reserves. It's the ongoing types of injuries that require repetitive treatment or loss of life enjoyment that are problematic and typically run into the large amounts of dollars. The Legal Trade-Off The lump sum settlement payment doesn't occur in and of itself. It is a payment to make a problem go away. In the case of an injury claim, the claimant agrees to sign a series of legal papers that essentially waives any further claim against a defendant party for exchange of a settlement payment. For example, in the case of an insurance settlement, the insurer will require that the receiving party signs forms that absolves the insurer completely. Many attorneys strongly advise letting them look at the forms before they are signed. In some cases the forms actually let the insurance company off the hook easy. On the other hand, it's a great way for an attorney to generate more billable work too. The big thing to remember is that when everybody has an interest in a claimant signing release forms, the claimant should make sure he himself has read the forms first as well. Getting a Lump Sum Settlement Before you grab that fast cash, learn what’s involved with Lump Sum Settlements