WRONGFUL INCARCERATION

STRUCTURED SETTLEMENTS

Time, Space and the Foundation to Rebuild

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Structured Wrongful Incarceration Settlements

Structured Settlements Provide Income Stability As Lives Are Rebuilt at Highly Competitive Rates

Proving your innocence is only part of the battle to put your life back together. Structured settlements may be beneficial to exonerated individuals following a wrongful incarceration/imprisonment by providing stable income for your must haves. After a wrongful incarceration, exonerated individuals may face numerous life transition challenges after they are released, as they rebuild their lives on the outside.

Finding Your New Normal

There’s a lot to catch up on and it has to be done at a pace that is comfortable for you. It may take time to find your new normal once you begin the next stage of your journey. Stable income at highly competitive rates in 2026 can provide the base on which to build a future for you and your family.

What Is Wrongful Incarceration?

A wrongfully incarcerated individual is an individual who was convicted of a covered offense, served all or part of a sentence of imprisonment relating to the covered offense, and meets any one of the following three requirements:
  1. The individual was pardoned, granted clemency, or granted amnesty for that covered offense, because the individual was innocent of that covered offense; or
  2. The judgment of conviction for the individual for that covered offense was reversed or vacated and the indictment, information, or other accusatory instrument for that covered offense was dismissed; or
  3. The judgment of conviction for the individual for that covered offense was reversed or vacated and the individual was found not guilty at a new trial after the judgment of conviction for that covered offense was reversed or vacated.

A covered offense is any criminal offense under federal or state law, and includes any criminal offense arising from the same course of conduct as that criminal offense.

Source IRS Wrongful Incarceration FAQ

Why Work With John Darer if You Are a Plaintiff in a Wrongful Incarceration Case, or an Attorney for an Exhnonerated Person?

As a Certified Financial Transitionist®, John Darer has unique training from the Sudden Money® Institute, qualifications, tools and a humanistic non-judgmental process to help prepare such individuals for the next step in their lives, to help give them clarity and confidence and provide guidance through their financial transition following release from prison. No matter where you are in your transition process or how you’re feeling about it, Sudden Money® trained advisors have tools that clarify where you are and where you’re going, and put your mind at ease even in the most difficult times. What everyone going through a financial or life transition needs more than anything, is someone who has got their back. They need someone who has the patience and compassion to understand what they’re going through and knows how to anticipate their needs and protect them.

Benefits of Structured Settlements as Compensation for Wrongful Incarceration/Imprisonment

  • Structured settlements provide stable guaranteed income, like ”a job you can never be fired or laid off from”, for as long as you want it. You can have a short runway or a long runway. Even for the rest of your life if you are no longer employable.
  • Provide a core foundation of income to support yourself and support of the family and children, if applicable. Restore provider status.
  • Provide a stable source of income that may help a former prisoner focus on reinvention, retraining, or furthering exploring his/her education but needs a means of support without risk of dissipation.
  • Provide a core source of income that puts the former prisoner in a safe place while he/she enters a “decision free zone” to decompress from a long incarceration, sort through and prioritize choices, before other decisions need to be made.
  • Defendants can offer meaningful compensation at all levels that is readily understood.

Positive Tax Developments Regarding Compensation for Wrongfully Incarcerated Individuals

IRC §139F which was enacted December 21, 2015, as part of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). “In the case of any wrongfully incarcerated individual,” IRC section 139F provides: “gross income shall not include any civil damages, restitution, or other monetary award (including compensatory or statutory damages and restitution imposed in a criminal matter) relating to the incarceration of such individual for the covered offense for which the individual was convicted.” Damages paid for wrongful imprisonment, however, which are not derived from a personal, physical injury, are not eligible for an IRC section 130 qualified assignment. However a non-qualified assignment is available.

A simply pleaded wrongful incarceration case will likely have to be completed using a non-qualified assignment or via periodic payment reinsurance(if there is insurance coverage until such time as IRC§130 is amended to permit damages under IRC §139F). Furthermore, there may be instances,where the Defendant (or its insurer) is willing to “buy and hold the annuity” (e.g. US government cases).

For more information about structured settlements for wrongful imprisonment and the Sudden Money® process, please contact John Darer® at 888-325-8640

Last updated December 23, 2025

Resources

The Innocence Project
The Marshall Project “It’s Crushing: The Lasting Trauma of the Exonerated”

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