After you’ve been injured, it’s crucial to hold the responsible parties accountable. One way to do so is through a personal injury settlement. With a settlement, the person at fault for causing someone else’s injury agrees to pay that person for the harm they suffered. In return, the injured person agrees to release the at-fault party from further liability. This means they can no longer sue them in court over the injury. But how exactly does that work out in practice?
Structured Payments vs. Larger Lump-Sum Payments
When it comes to receiving your personal injury settlement in North Carolina, you generally have two options:
- Structured payments – A structured settlement means you’ll get your compensation in smaller, regular payments over a specified period of time. This can be beneficial if you need consistent income to cover ongoing medical expenses or make up for lost wages. It’s also potentially easier for the at-fault party to pay, as they can pay over time without having the cash on hand now.
- Lump-sum payment – On the other hand, a lump-sum payment gives you all the settlement money upfront. This approach can be ideal if you have immediate expenses or want to invest the money yourself.
Both options have pros and cons, so it’s crucial to consult your legal team to determine which option best suits your needs.
Are Settlements Tax-Exempt in North Carolina?
In North Carolina and the rest of the United States, most personal injury settlements are not taxable. The bulk of the money you receive from a personal injury claim is to compensate you for losses you’ve already sustained, like medical bills or emotional distress. Since it’s merely making up for what you wouldn’t have lost otherwise, you haven’t made any money in the eyes of the law.
Under U.S. tax law, the entire settlement amount for personal injuries is excluded from gross income. However, there are some cases where parts of your settlement could be considered taxable income. Your personal injury lawyer and an accountant can help determine the specifics of your settlement and whether any of it can be taxed.
Will I Receive the Full Settlement Amount?
Securing a settlement might feel like crossing the finish line. However, it’s important to realize that the amount you end up with in your pocket can be quite different from the original sum. Several expenses could be deducted from your settlement first, starting with attorney’s fees. Most personal injury lawyers work on a contingency basis, which means they take your case at no up-front cost but receive a percentage of the settlement as their fee. You might also have liens against your settlement – legal claims from third parties like healthcare providers or insurance companies that must be paid before you get your share. A skilled personal injury attorney can help ensure you maximize your settlement.
Timeline for Personal Injury Settlements
The timeline for personal injury settlements can vary significantly depending on various factors. Most cases wrap up within a few weeks or months. But others may take a year or longer, especially if the case enters the trial phase. Your lawyer can provide a better estimate of how long your case might take.
The best thing you can do to maximize the value of your personal injury settlement is to retain an experienced and dedicated Durham personal injury lawyer. Kreger Brodish LLP is here to protect your rights and fight for the compensation you deserve. To learn more about how personal injury settlements work, contact us today for a free consultation.