3 Facts about Compensation You Should Know

3 Facts about Compensation You Should Know

If a person sustains an injury because of someone else’s negligence or recklessness, they may consider filing a lawsuit against the responsible party. A successful claim against a negligent party may result in financial compensation for the injured person. This money can prove extremely useful in covering expensive medical bills and other unexpected costs related to the accident in question.

For those who have never gone through the process of filing a personal injury lawsuit, the experience can be quite complicated and confusing. Fortunately, help is available. The Charleston accident attorneys of the Steinberg Law Firm are here to help you better understand personal injury lawsuits and receiving compensation. The following are three things our attorneys believe it is important for every accident victim to understand:

#1: You should not have to pay taxes on compensation.
If an accident victim is awarded compensation, they generally don’t need to pay taxes on this money. The government doesn’t require tax payments for personal injury compensation related to healthcare bills, pain and suffering, lost wages, etc. However, an individual may need to pay taxes on any interest that has accrued on that compensation. Additionally, compensation for punitive damages is often taxable.

#2: You may receive either a single payment or several regularly timed payments.
The law regarding compensation payments allows two different types of payment schedules. The simpler payment type is known as a lump sum, which consists of one payment from the defendant to the plaintiff. This payment covers the full amount of compensation awarded in a single transaction. The second, more common, type of payment is known as a structured settlement. These settlements consist of smaller payments made on a regular schedule, eventually reaching the full compensation amount over time.

#3: Structured settlement payments can be transferred by a defendant.
If a defendant pays through a structured settlement, the plaintiff can be asked to agree to a third party transfer of the compensation agreement. A third-party group can take over the defendant’s role in providing payments over time, meaning that this third party will provide payments to the accident victim instead of the defendant. However, the defendant will still need to pay the third party for any remaining compensation they have been ordered to pay.

If you have been injured because of another person’s negligence, we may be able to help you better understand your legal options. To schedule an initial consultation regarding your claim, contact the Charleston accident lawyers of the Steinberg Law Firm by calling 843-720-2800 today.

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