Lump Sum Settlements .net
Definition A lump sum settlement by terminology basically describes what it sounds like. A settlement is made with one payment all at once. For the injured party, such a settlement represents one payment to cover all issues claimed, once and for all. Many plaintiffs or claimants immediately jump at such settlements since the idea of waiting for schedule payments becomes almost unbearable after having had to fight for a settlement for a long period of time already. For the defendant or paying party, the lump sum represents one payment that basically closes the issue once and for all. Lawyers will make sure that before the settlement is paid, the claiming party has signed an agreement not to pursue the claim or any related issues any further with the paying party. In some cases such settlements may even have silence clauses to make sure no one involved talks about the details of the settlement or its background issue. In terms of marriage and divorce, a lump sum settlement can represent a clean cut of the financial arrangements between spouses. By making a large payment to offset losses of property, income, or personal assets, the paying party can walk away from the marriage having no further obligation for the future if agreed to. The receiving party gets cash up front to offset perceived or real losses that would occur over time from the separation. Such a settlement also goes by the name of "alimony in gross."
A primer on Lump Sum Settlements Any financially successful involvement with a litigation situation, particularly in a settlement for a financial or insurance claim, has the potential to result in a lump sum settlement. This option ends the issue for all parties involved quickly versus opting for full court litigation or having to wait for scheduled payments under a structured settlement payment scheme. However, depending on a person's individual situation, getting a lump sum settlement up front may not always be the best course of action.
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