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Home  >  Articles  >  3 Things You Need to Know about Compensation

3 Things You Need to Know about Compensation

After sustaining an injury, a person may consider pursuing financial compensation for the cost of their injuries. During the aftermath of an accident, the high price of medical care in addition to lost wages during recovery may lead to severe financial problems. However, legal action may be available to recover compensatory money lost because of someone else’s negligence.

If another person’s mistakes have caused you to sustain a serious injury, you may be entitled to pursue compensation for the related costs. For more information regarding your legal options as an injured individual, contact a New Jersey accident lawyer of Levinson Axelrod, P.A., today at 1-800-346-5529.

Three Facts About Compensation

When considering a personal injury claim, the following are three important facts to understand regarding your compensation.

#1: Compensation is Usually Not Taxed

Financial compensation paid for an injury is usually considered non-taxable for the claimant. This non-taxable status extends to compensation for medical costs, pain and suffering, and other damages. However, compensation for lost income and punitive compensation may be taxed.

#2: Compensation Can Be Paid at Once or Over Time

There are two general compensation payment options. The first is a lump sum, in which all compensation owed to the claimant is paid out in a single amount. The second type of compensation is known as a structured settlement. Structured settlements are paid out over a set period of time, including regular amounts of compensation until the total sum is paid.

#3: Structured Settlements May be Passed Off to a Third Party

As long as the claimant agrees to the decision, a defendant can pass their compensation obligations to another party. This party is then considered legally responsible for the compensation payments. Of course, the defendant still must pay this third party their share of the compensation obligation.

Contact Us

If you or someone you love has sustained an injury caused by someone else’s negligence, our experienced legal advisors may be able to help. To learn more about your legal options, contact a New Jersey injury lawyer of Levinson Axelrod, P.A., by calling 1-800-346-5529 today.